Should a 22 person commercial sub retool for data center scopes or stay wide across local work?

The 90 minute number is the part worth sitting with. These projects tend to 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 are driving 22 people 90 minutes each way, that cost is real and it comes out of your margin rather than the GC's. A local outfit winning big rural work and then losing money on windshield time is a common pattern.

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?

@kevin_lombard yes on both. Scope is the slice of the job a sub is contracted for, and prequalification is the GC's vetting file, insurance limits, bonding, safety record, financial statements. Big institutional jobs will not take a bid from a sub who is not in the file. @mikeoconnell7 the thing to protect is the 14 percent. The pattern that catches a shop this size is letting one client reach 40 percent of revenue around year three because the work is good and easy to schedule. Then that client restructures or brings the work in house, and the owner spends nine months rebuilding a pipeline that stopped getting tended. The revenue was worth less than the pipeline. Whatever the decision, the new client relationship should never come at the cost of the relationships that feed the shop in a slow year.

I would push back a little on the slow decline framing for traditional commercial. Class A office landlords are spending again, mostly on fit-out to win tenants out of older buildings, and those TI packages have been the steadiest work available to fit-out crews in about three years. It is a reshuffle. Total occupied square footage stays flat while the dollars per square foot on the good buildings go up. That is real work for a fit-out crew even in a structurally pressured sector.

The thing that should make a careful operator cautious about full commitment is where the private capital is actually committed. It is committed to compute capacity rather than to any particular site. Projects get resited or paused when a power interconnect slips or a tenant reallocates its footprint. The money does not leave the sector, it just leaves your county. Concentration risk in a sector that is growing can still hurt you if it grows somewhere else.

@mikeoconnell7 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 voting, the one thing you have not said matters most, 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 worth having 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 is 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. Most of the gap is @laurenkim53's windshield time. If that is true, you would 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.

Set the trade specifics aside for a moment, because @ehernandez74's point about 75 day pay and no debt is the one that decides this. If you cannot finance the receivable, the size of the job is capped no matter how good the margin is. Is 75 days typical on hyperscale work, or do subs on jobs that size get paid faster in practice?

@raj_mehta14 they generally do not get paid faster, and retention makes it worse. @mikeoconnell7 the operators who break on scaling almost always break on whatever grew fastest. The thing that looked riskiest at the start rarely does it. The selective bidding option in your poll is the one I voted for and here is the reasoning. It is the choice that keeps your existing business intact while you find out whether @hannah_west29'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 do not rebuild a pipeline from zero at 22 employees.