For all the people on this forum who have worked in construction (or anybody who has any idea):
Is there normally any bonus/ commission/ anything for bringing in a deal? Recently I brought in a preconstruction agreement sourced by my own relationship for a ~$60MM deal.
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I know this is just precon, not an actual prime contract. It's like being engaged to a girl but not married yet. Could still fall apart, but it's not all that likely.
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I am in a junior role at my firm. Normally, my boss' boss' boss' boss are the ones who source deals. I brought it straight to the Partner of the firm I work for (I work closely with him directly 50% of the time, so I am not really going over people's heads).
I was pretty excited about getting this together. I got a "Good job" and that's pretty much it. Just wondering if this is normal or not.
What role in construction are you in? It should depend on your comp structure, but it's kinda rare to have a direct percentage of the profit go directly to an employee lower than a PM level even if you sourced. Is that a 60mm deal with risk? A GC job or consulting job?
Anything PM and above can get complex with comp. It really should be baked into your comp structure/employment agreement.
Appreciate the response.
I'm a hybrid PE/ Estimator/ Scheduler at a GC. Not at the PM level. I'm familiar with comp structure at my firm except in sourcing deals. It was never discussed because I have only seen PX's and above source deals. I understand my base + salary are pretty fixed, just wondering if it is usually just a "thumbs up" or if a larger bonus or anything is warranted? I would like to hash it out before any prime contract is signed if possible.
Edit: Most likely Cost Plus with GMax.
If it's a straight GC role, you typically receive bonus/comp at the end of the job, not just for sourcing deals. I know that it's really uncommon for a PE to source a job, let alone a 60MM one, but comp is typically brought in based on based on your profit numbers, and a percentage of that is taken based on operations. I'm not sure if you'd be performing ops on this, but i'd say that you should have a discussion on your ownership/PX staffing to confirm. Since PX's are typically involved with a lot more staffing/projects, I haven't seen any that collect cash before the project's done. They're usually more involved with the whole lifecycle of the project. With a pre-con contract, it might be different since the money is 'guaranteed' and the risk is minimal. It's more of a consultancy role and your employer would have less pain giving an upfront bonus for sourcing.
If this is a straight cost-plus, the risk is extremely low and you might be entitled to some compensation upfront. I have a feeling this is actually a GMP/GMax, which isn't exactly the same as cost-plus, and therefore wouldn't have a real "guarantee" on income like a cost-plus job would. There's just too much to go wrong to guarantee a significant percentage of profit before the project finishes.
As an REPE modeling a ton of development, do you think it would be helpful for me to better understand pre-construction/estimation? Are there any online resources that can help me better understand how you guys arrive at your value?
Update:
First, thanks @Dumpster Fire Yuppie"- really appreciate your insight to this situation.
So business development is a group effort on the part of everyone at the firm, but my efforts are very much appreciated. This will reflect in my performance review where they evaluate at which range (sounds similar to IB buckets for those who are familiar) my bonus is paid.
In other words- I get a pat on the back and if I keep up the good work, I can expect my bonus to be more in line with $10k total, between a range of $5-10k paid out to PEs based on experience and performance.
I would stage it like this - ask your VP or whoever it is whether or not a business generation incentive program exists. This IMO is a better strategy than asking whether or not you can get paid on this item. Based on their response, you could say something along the lines of "I enjoy the idea of bringing in new business as a supplement to my day-to-day duties, is there potential for a compensation plan to incentivize this?"
Thanks- I appreciate the advice. I did try to phrase it somewhat similar that. I basically said, "I have quite a few developers in this region that I am close with. I touch base with them and they seem to like me. Is there a way I can utilize that existing and growing network? What is the structure like for this?"
I know better than to say, "Hey can I get paid for doing this?"
The response was that everyone is responsible for bringing in deals, but just nobody else does it except for very senior people (who get a cut of the profits, which would be their incentive).
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