Retool the crew for data center scopes or stay wide across local commercial

The 90 minute number is the part I'd sit with. Out where I work, these projects land on cheap rural land near transmission, which means the labor pool near the site is thin and everyone ends up paying per diem and travel. If you're driving 22 people 90 minutes each way, that cost is real and it comes out of your margin, not the GC's. I've watched two local outfits win big rural work and lose money on windshield time.

One word is throwing me off here. When you say scopes, do you mean the trades you're hired for, so like the electrical scope or the concrete scope? And prequalified means the general contractor has approved you to bid before you're allowed to bid?

@juniper yes on both. Scope is the slice of the job you're contracted for, and prequalification is the GC's vetting file, insurance limits, bonding, safety record, financial statements. Big institutional jobs won't take a bid from a sub who isn't in the file.

@lantern five years in on my own shop and the thing I'd protect is the 14 percent. I let one client get to 40 percent of revenue in year three because the work was good and easy to schedule. They restructured, brought it in house, and I spent nine months rebuilding a pipeline I'd stopped tending. The revenue was worth less than the pipeline. Whatever you decide, don't let the new client relationship come at the cost of the relationships that feed you in a slow year.

Managing traditional commercial, I'd push back a little on slow decline. Class A office landlords in my portfolio are spending again, mostly on fit-out to win tenants out of older buildings, and those TI packages are the steadiest work my vendors have had in three years. It's a reshuffle, so the total square footage isn't growing, but the dollars per square foot on the good buildings went up. That's real work for a fit-out crew even in a structurally pressured sector.

Watching how private capital is moving into this, the thing that would make me cautious about full commitment is that the capital is committed to compute capacity, not to any particular site. Projects get resited, phased, or paused when a power interconnect slips or a tenant reallocates. The money doesn't leave the sector, it just leaves your county. Concentration risk in a sector that's growing can still hurt you if it grows somewhere else.

@lantern what does prequalification actually cost you in cash? Bonding capacity increase, the dedicated PM salary, the safety documentation. If it's a number you'd earn back on one job, the decision looks different than if it's two years of overhead before revenue.

Before I'd vote I'd want to know something you haven't said, which is what your contract terms would look like. Payment cycles on big institutional work run long and retention gets held, so a 22 person payroll against 75 day pay is a working capital problem even when the job is profitable. You said no appetite for debt. Those two things fight each other.

Numbers I'd want on one page before voting. Current gross margin per crew hour on fit-out work. Expected margin per crew hour on the big scopes after travel and after the PM overhead is loaded in. Then the same figure with a 15 percent schedule extension, because these jobs slip and your cost per hour keeps running while you wait on someone else's equipment delivery.

My guess, and it's only a guess, is that the headline rate on hyperscale scopes looks 20 to 30 percent better and the realized number lands close to your existing work. @hollow's windshield time is most of the gap. If that's true, you'd be taking concentration risk for the same money.

Tools in hand for 19 years and here's what I'd add: it changes your crew. Big site work is different work. Badging, stand-down safety culture, waiting on other trades, tight-boxed scope. Some guys love it because the hours are steady, and some walk after four months because they signed up to be a builder, not a number on a badge. Ask your two best foremen before you ask the accountant.

I follow almost none of the trade specifics here but @anchor's point about 75 day pay and no debt landed. If you can't finance the receivable, the size of the job is capped no matter how good the margin is. Is that broadly how it works, or do subs on big jobs get paid faster than I'd assume?

@vellum they generally don't get paid faster, retention makes it worse.

@lantern I run a small portfolio and every operator I know who broke on scaling broke on the thing that grew fastest, not the thing that was riskiest at the start. The selective bidding option in your poll is the one I voted for and here's my reasoning. It's the choice that keeps your existing business intact while you find out whether @ledger's margin math holds. If the realized margin is genuinely better after two jobs, you can commit then with real numbers instead of a GC's rate sheet. You lose some of the early window. You also don't rebuild a pipeline from zero at 22 employees.