Episode 87 - Losers are Winners: The Mistake That Almost Tanked a $1M+ Project
Episode #87 | Losers Are Winners | The Mistake That Almost Tanked a $1M+ Project
Twenty-two years in the business and Mark still managed to remind himself why taking the low bid is basically a trap with a bow on it. In this solo Losers are Winners episode, he pulls back the curtain on a framing nightmare — missed milestones, disappearing crew members, bounced checks, and one very uncomfortable site meeting — and how it all came to a head with his first-ever mid-project subcontractor firing. The real plot twist? The client ended up trusting him more because of it, not less.
About The Curious Builder
The host of the Curious Builder Posdast is Mark D. Williams, the founder of Mark D. Williams Custom Homes Inc. They are an award-winning Twin Cities-based home builder, creating quality custom homes and remodels — one-of-a-kind dream homes of all styles and scopes. Whether you’re looking to reimagine your current space or start fresh with a new construction, we build homes that reflect how you live your everyday life.
Support the Show:
-
Mark D. Williams 00:00
If you're looking to level up your business in 2026 and beyond, please consider contractor coalition, amazing people, incredible builders from all around the country. We are coming up on May 1 through the fourth in Denver, Colorado, on Friday, which is the opening kickoff of that event, we are going to do a tour of a construction instructions warehouse and their whole facility where they test products from all over the world, in Colorado and Denver. We're also going to do a tour of alder view construction's beautiful homes while we're there. And then that evening, we will kick off the event for Denver, that is May 1 through the fourth. Then our second event of the year will be a one day Crash Course. Will be September 15 in Minneapolis, Minnesota. This is really meant to be a much abbreviated version, but obviously at a much lower cost. And then our last three, four day event of the year will be in Charlotte, North Carolina on November 6. For all the details, please head to contractor coalition summit.com you Ian.
Mark D. Williams 01:04
And again, you know why this is the losers or winners series, is I should know better? You know, taking the low bid never works out. I never do it on anything I do ever in life. Or honestly, why did I think it was a good idea, and I thought I had hedged it with the client, and I probably wouldn't have done it if the client wasn't looking for that win, so I sort of, I really only have myself to blame for even bringing it up to the client. All
Mark D. Williams 01:32
right, welcome to cures, bidder Podcast. I'm Mark Williams, your host, and I'm going running solo today, which is unusual. I haven't done this in several months. It's always more fun talking to a guest, but we had a guest had to change course, as we do in construction on Mondays, which is the day I'm recording this, and so we'll have to get them back on another time. I thought maybe it's time for me to share a losers are winners story. I don't know where the winner is on this story, but it's definitely a loser, and it's pretty fresh, so if it comes off bitter, it's because I haven't had enough time to let it simmer. I think, you know, I'm 45 years young, and you would like to think that after enough time, you wouldn't need to keep relearning the same lessons, but evidently, I'm an idiot, and I'm going to share a story that I should have known better, and just kind of give you the circumstances of it. The short version of it is, in 22 years of building coming up. This may is 22 which is my favorite number. So maybe this is a great year. It was, I had to fire a subcontractor or let them go, as my lawyer said, part ways. Amy, quickly, but I have never had to do that in 22 years. I mean, obviously I've chosen not to work with people after they did a poor job, but I can't recall ever having let someone go in the middle of a project before. My personality is such as, I always try to get through a situation, and it's not always ideal, and maybe it's a flaw in my own personality, but I always feel like, you know, with enough willpower and fortitude you can kind of get through most situations and it, you know, it's not that I'm afraid of legality and those kinds of things, but it's mainly just, like, I just find it's better if you can just plug through it and move on with your life and get through it. But anyway, long story short, I'll kind of paint the picture where you're framing a house, and it's been a challenging spring in Minnesota, or should say, winter, you know, we had all the political upheaval and social matters around ice and all the stuff that was very real here. We had a lot of delays. We lost a couple months on two projects for those exact reasons. And we have a client who really wants they have a deadline coming up next Christmas for their home, and it was already pushed back a lot further than they wanted, but we assured them that we would get in the ground in January. And so we did, obviously, we fight our normal cold, which is totally normal, and you know, the homeowner had put a lot of pressure on us to hit a lower price point, and I usually will never well, in fact, this is kind of a rule for me. I never work with a subcontractor that I haven't worked with before without telling the client and getting their buy in first. So certainly, I work with contractors I haven't worked with before. It happens all the time, but for probably 80% of the the subcontractors I've either worked with them in the years past or they're a really good reference from someone I know, very rare. Does someone come into our realm? Because we operate a very high caliber of homes. I mean, we, you know, training on our jobs is not really an option. We are expected to do very high end work, and we do and really and also loyalty. I mean, we've worked with so many of our people for, you know, multiple decades. In some cases, I've won my plumber. Big shout out to them. I mean, we're on third generation, so we're talking, you know, some serious time under the belt between our two families companies. Anyway, we got four bids for framing, and as it usually is, there's a high bid and a low bid, and these high and low bids were way apart. So. And then the two middle bids were quite close. And so I approached the homeowner, and he was really looking for some wins. And I said, here's a situation. There's a framer we have not worked with before. The timing does work out better for them at that time that we had to make this choice, which is early December, a framer that we would have a long history with they'll come back later into the story. They weren't available for four or five months, and that's which is why we get multiple bids always for framing in particular, because if you're in the if you're in the business, you know how it goes. If you don't have a backup option, you can't wait four or five months to start a house. So I said, here's the deal they are, I guess I won't disclose publicly what the difference was, but they they were quite a bit cheaper than one of the other bids, and so I may be like, 30% cheaper. And I said to the homeowner, I said, here's a chance for us to make a win. I have called the references. I know who they have worked with before, talk to them on the phone, and I had my project manager meet with them, and they seemed on the level, and said, What do you think? Do you want to go for it? And the homeowner was very excited to make the savings. And so I said, Okay, we'll do it. So again, that was me setting up the stage to at least tell the homeowner what we were doing so it wasn't out of the blue. So anyway, we get started, and it's not a weekend of the build, and my red flags start going up a little bit there, the guys aren't showing up. That were promised a crew of five or six. Two guys are there.
Mark D. Williams 06:27
You know, the dog ate my homework. You know the terrible excuses. You know, my guy is sick. You take people out there at their word, right? I mean, that's how I roll. One situation, they had a child that had to go the ER, evidently for a week, which is obviously, I'm very sympathetic to that. I said, No problem anytime it comes with to family. That's a number one priority. I can no problem. But we never saw that framer again. He was the lead framer. So that's very troubling. And then we saw the change order we keep. We kept having new people show up that were not there previously. And then we started hearing grumblings about people aren't getting paid. People, you know, I hear grumblings from the cruise and from my project manager saying, you know, hey, I think we'd be able to be really careful with how we pay these guys. Because, you know that you guys are talking about bounce checks, which is a huge red flag, you know, obviously it's signaling to me that if a company is about to go insolvent, or if they're paying their guys, you know, from one job to another job, man, what's going to be the fallout here? And that'll come more back on that later. So, and then just some general incompetence. I mean, extreme incompetence. And so I kept pressing with my PM, like, Hey, can we help them? Can we solve this issue? And they would keep telling us what we want to hear. Hey, I promise we'll get more guys there tomorrow. They'd show up at like, nine o'clock, which is just not normal in the framing world. I mean, it's always been you start at, you're there at quarter to 777, 30. I mean, if you're not operating full steam ahead by 8am that, like, it's really unusual in the framing world. Totally normal for them to leave early, because they start early, but this was just so inconsistent, and we did have some extreme mud. So in their defense, like, the site was a disaster. You know, it was a big farm field, so the permafrost coming up was just a mud hole. But they kept getting stuck over and over and over. They couldn't move. So it was hard to understand, like, Was it their incompetence? Was it their slow pace? Was it the conditions? Was it everything? And it probably was a little bit of everything, but we just couldn't really triangulate. And I tried to be as patient as we could, so I lined up a meeting to meet with them on site and to, you know, really, just have an eye to eye conversation. Say, guys, this has not gone over well, and I want to see how they reacted. And so in hindsight, he wouldn't really look me in the eye, which is should have been more of a red flag than it was. And I didn't know if it was body language or just his personality, so I didn't make a big deal of it. But in hindsight, I wonder if it wasn't lying, if it wasn't he just wasn't really willing to tell me the truth, which I can handle. The truth, what I can't handle is lying or deception or telling me one thing and then doing something else. Like that doesn't work with me. If you tell me there's a problem. Like, I am very sympathetic to the guys in the field, like nobody will support you know, our trades more than me, like I so value what they do for us. And for decades, I couldn't do what I do without them, so I very much depend on them and I trust them. But I really felt like I was being that trust was being abused. And I really thought being this first house, like, I sort of put it out there that, like, hey, we have other projects coming up. In fact, another builder in the neighborhood had said, Hey, I've used them five, six years ago, and we had a bit of an issue, but they reached out to me and said, Could we rebid your work again? And I said, Well, let's see how you do on Mark's projects, and then we'll talk. So this crew had multiple reasons to do a good job, and they just could not get it together.
Mark D. Williams 09:59
What. It comes to quality, craftsmanship and performance, Pella sets the standard whether you're building custom homes or designing a timeless space. Pella offers innovative window and door solutions that blend beauty and efficiency with showrooms and experts around the country. Pella makes it easy to find the perfect fit for your next project and their team to support it. Build with confidence, build with Pella. Visit pella.com to explore products and connect with your local rep today. For more information, you can listen to episode one or listen to episode 109 where we bring on Pella owners and founders at Pella Northland, as well as their innovative team behind the steadystate innovation. So we met with them, put out the schedule of what we're going to do, and they couldn't hit a single milestone. They were ordering material which would be needed weeks from where their progress was. And so finally, I got so frustrated. I was calling, emailing, texting, which is not usually my MO and at first they were responding, then they went dark. And that's usually, as we all know, whether it's sales or literally, with anybody when they go dark, it's usually the beginning, if not the end of the end. So I had the week before I had met, I had called the framer who was the middle to high bid, and I just said, Hey, if I have to make a move here, which I don't want to do, and no framer wants to come in halfway on another framers project. I said, you know, last thing I want to do, I don't want to, I don't want to cut this off and then have no one available. So what's your availability? And they said, Well, as luck would have it, we just had a four month job cancel on us, and they're putting it on hold. So, and this company is actually the same company that's working on our next project about five miles from this project, which, oddly enough, because it was delayed because of all the ice stuff and our concrete guys were pushed back two months, actually worked out just fine. We have, basically, they have about four weeks to fill before this other house is ready. I was like, oh, man, that's a pretty clear signal that this is probably going to work out the numbers. Obviously, it was going to be a tough pill to be a tough pill to swallow, because their bid is quite a bit higher. I had told the client early on. I said, you know, when they were you know that 20, 30% lower? I said, Don't, let's not. We're not going to credit you. I want you to know that there is a credit coming, but let's hold it back in case we get hit with a bunch of change orders from this framer, or in case something happens. We've got this kind of in reserve, and the client was fine with that. So long story short, I consulted my lawyer, and I said, What do we do? And he said, Well, where are you at? And as luck would have it, we were about we'll lose about four to 6000 in fact, that we've overpaid them, but that's not the end of the world on a job this big. And so I said, we're never going to find a cleaner break than right now. So I had texted, called and emailed the framer on a Thursday. Never heard anything back from him. His guys in the field hadn't heard from him in a week, which, again, was just putting more and more blood in the water. So Friday, we went on site. He wasn't there. We tried to I tried to call him, I tried to text him, tried to email him again, nothing. So then we executed the order. I sent him an email outlist outlined all the things that they had failed to do, the money that they owed us, which I'll never be able to collect, nor will even try, and really just there it is. And so we let them go on a Friday. Never heard from them. Then that weekend, it snowed like 14 inches, which was great. And then the next, I think, Tuesday, the new framers started, and I said to my pm, I said, Mike, you better be out there, because I don't even know if these guys know they got fired. You know, did their guys, you know, does their boss even let them know? Well, anyway, Mike was out there, and he did see the owner, and I feel bad for the guy me, and I didn't mean, I don't mean him any ill will. I just, but we have a job to run. We have also a financial duty to our client. And he just said, how you doing? He's like, not very well. You know, you know, I'm sorry to hear that, but you know, not talking to us is not really a viable option, and lying to us doesn't work really good either. And again, you know why this is the losers or winners series is I should know better. You know, taking the low bid never works out. I never do it on anything I do ever in life. Or honestly, why did I think it was a good idea, and I thought I had hedged it with the client, and I probably wouldn't have done it if the client wasn't looking for that win. So I sort of, I really only have myself to blame for even bringing it up to the client. But luckily, things worked out. The new framer started. We didn't credit the client the money that we had left over, so we'll use that to offset against future invoices. And the winning side of this is actually kind of interesting, which is why I want to talk about it is I was really concerned that the client was just going to just be really difficult about it, because they're gonna, it's gonna cost them more money. Now, we did tell them that, you know what, we're not going to charge any GC fees. On top of this. We have some responsibility, obviously, but is a cost plus contract. It is the cost of doing business. And they understood that they
Mark D. Williams 14:57
were part of the decision to hire the framers, so I felt like they. That was a good win for me by being very open and honest with them about it ahead of time, and and, and they were actually really relieved. He said, You know what, I had been on site, and I had heard them talking about not getting paid, and the client before had never told me this. I'm like, wow, how unprofessional is that, that these, you know, these subcontractors are out on a job site talking about not being paid to my homeowner like that's terrible etiquette. And he overheard him it wasn't a direct deal. On top of he could tell that things just weren't going smoothly on the job site. And he said, you know, we actually had this exact scenario happen to us five, six years ago when we built our previous home. He had never told me this, and he said the previous builder had to let the framers go and make a change. But the difference was, is they never told us about it, and it led to a lot of bad blood, a lot of mistrust, and I could tell, because the client and I have not always seen eye to eye, but I respect them, I respect their family, and I think they respect what we do. I honestly felt like this is probably the closest I've been to the client. Is like, I think they really did. They trust me a lot more than they did before, because I was so open and honest about it, and they thanked me a number of times. They said, Thank you so much for telling us and including us in the decision, because I had called the homeowner before I sent the letter, and, you know, and hired the new framer, and had my lawyer make sure that we had the paperwork. And I called my homeowner, and I said, this is what I'm going to do. This is why I'm going to do it. Are you okay with it? And it was, everyone was green lights up. And so I learned a valuable lesson that, you know, that pressure that I put on myself, and as all owners do that really, by choosing to to educate the client and tell them about it, I actually was carrying a burden around that I didn't need to carry. And so so far, it's worked out well, we've we found a number of mistakes that that they made. We would have found it at framing inspection. And you know, when we do it, you know, sometimes it's easy to be critical of other people's work. And so, you know, my Pm is, you know, was a framer for 20 years. So it's like, you know, everyone has a little bit different process. So you want to give them the the space and the latitude. You don't need to be sitting over someone's shoulder all the time and telling them what they're doing wrong.
Mark D. Williams 17:11
So I know Mike was kind of letting them not to get too far down the road, but you know, hey, if you, let's let you do your own system first, and then we'll talk about where you're missing out on. So anyway, they've fixed it. We're back on schedule. And, you know, we're back framing the house. So I the valuable lesson to myself is, you know, trust your gut and remind yourself again that taking the low bid, there's usually a reason. And you know, I remember forecasting the math out like at their current rate. You know, this contractor had done a 50% at about halfway, and then the other 50% at the half. Well, it took them five six weeks to get halfway. At this current rate, they'd be insolvent. There's no way they could have paid their weekly payroll and finished the house, and so it would have only gotten way worse and put us in a way more difficult position. So as painful as it was, it was it was better to make the cut quick and to be done with it and to move on. So I learned a very valuable lesson again, and it reminds me again of why trusting that low bid, especially with a new relationship, can be so so dangerous and and can be really difficult. So that is this week's loser or winner story. And tune in Mondays for full episodes with builders, architects and designers from around the country. And we're going to be switching things up here pretty soon. On our Thursdays, we are going to be doing kind of like sweet and sour ying and yang. I decided it was time to Well, I think there's a lot of value in our losers or winners series, and people seem to really like it. We are going to basically go every other week a losers are winners and inside the big wins. So we'll be asking, I think we're going to ask each guest that comes on to basically give their biggest loss and what they learned from it, as you've come to expect, and their biggest win. I think it's time for some good win stories and so keep the positivity going. So each opposite of each week will be two episodes about that. So thanks again for tuning the curious builder. And if you have not at this point, given us a five star rating or given us review, please do so. I don't know if you know much about podcasting, but it is very much a word of mouth type of situation. So if you have an episode that you find valuable, or if you've gone back, I have some people that will discover the show, and they'll go back and data mine every single episodes. You know who you are. Thank you very much for what you do. That's incredible, but it's hard. You know, we have to showcase to our sponsors the value that we bring. And without an audience, without people interacting with us, it's really hard to understand what value we provide. And you know, as we keep on getting more and more followers and more and more listens. It's really helpful for us as a business and as me as a host, to understand what's valuable out there. Also, it's been a while. If you want to write in a question, or if you want to be a guest on the podcast, I know we're doing the smile tour around the coast, so that's pretty set. But if you want to come on share, if you've got a lost story or inside the wind. Story, I would love to hear it. So please send me an email at Mark, at MD, Williams, homes.com, or you can just DM me on our Instagram handles. We'd love to have you on and to share your losers or winners story or your big win. Thanks again for tuning in. Thanks for tuning in. The curious builder podcast. If you like this episode, do us a favor, share it with three other business owners. The best way that we can spread what we're doing is by word of mouth, and with your help, we can continue to help other curious builders expand their business. Please share it with your friends. Like and review online, and thanks again for tuning in.
This episode is sponsored by:
