How to Create Competitive Bids for Large Projects
If your construction bids are consistently missing and resulting in no jobs being acquired, there may be something wrong with your process. In the bidding world, it can be a numbers game, but the quality of the bids you’re submitting matters a great deal. The larger the construction project, the more competitive the process will be.
Before submitting a competitive bid, you’ll have to first understand the entire bidding process.
The bidding process for large construction projects
Large construction project owners will invite your company to bid through a competitive bidding process. The project owner will issue a Request for Proposal (RFP) solicitation form, a document used to request proposals from interested contractors.
An RFP does the following:
- Informs contractors that a project owner is looking to hire their service
- Alerts contractors about the selection process
- Ensures a wide circulation to attract quality bidders
- Provides details about the construction project
Bid submission
When you receive the Request for Proposal, you must prepare and submit the bid within the stipulated deadline. When submitting the bid, ensure that you provide relevant information about your company and its past performance. Every bid is different, so you must ensure that all requested information is provided.
Bid selection
The project owner will select the most qualified bid based on their evaluation criteria. The rules for evaluating a private and public proposal differ slightly. In most public construction projects, The winning bid usually has the lowest price. However, in private construction projects, the owner will evaluate the price and quality of the project.
It’s important to note that price is not always the best determinant of choosing the right company. This is because some contractors leave out construction details to be more competitive, which is never a good idea. This strategy can result in construction projects either stalling or ending up being of low quality.
Contract formation
When the project owner chooses you as the winning company, you’ll be invited for a formal interview. Remember that owners will likely conduct a background check before you’re able to sign a legally-binding contract.
Now that you understand the entire bidding process, it’s time to discuss how you can create a competitive bid.
How to create competitive bids for large projects
Use technology
Excel was once a great tool for preparing financial figures. However, these days, it makes more sense to use modern accounting platforms that aren’t prone to errors. An Excel spreadsheet can be easily corrupted and manipulated by other parties. Excel also makes it difficult for key players to collaborate simultaneously.
ALICE is a great example of a technology that you can use to grow your brand equity and submit winning bids. It’s a construction optioneering platform that helps contractors create winning bids, reduce risk, and develop effective construction schedules.
Modern technological solutions like optioneering platforms or even VR technology can give you an advantage over your competitors.
Get the right bid
Creating a competitive bid means knowing which job to bid for. There are several types of construction projects that you can bid on, ranging from residential, industrial, and commercial infrastructure projects.
If, say, you specialize in residential construction, it wouldn’t make sense to bid for commercial infrastructure projects. Plus bidding on every project can waste time, since owners of large projects will only work with specialist contractors.
Rather than bidding on every job offer you get, concentrate on creating quality bids. Decades ago, tenders were advertised using newspapers, but these days, tenders are advertised on websites like https://sam.gov/content/opportunities/.
Have a checklist
A checklist is essential because it details the requirements you’ll need to meet to win a given tender. The checklist should include a client evaluation checklist, a designer evaluation checklist, a plans checklist, and a specification checklist.
A client evaluation checklist lets you know whether or not the job is suitable for your company. For this, you’ll have to evaluate factors like the size of the project, the bidding process, the budget required, and funding.
A designer checklist looks at factors like your company’s design capabilities, environmental intelligence, technical competence, and reputation. With this checklist, you should be able to identify your shortcomings and strengths.
Know your client
Sometimes, simple strategies like knowing the client’s identity can help create a competitive bid. In this digital age, there’s a big possibility that if you Google the client’s name, you’ll get tons of information about them. Online searches will help you understand the client’s taste, enabling you to create a customized bid.
Before submitting your bid, you can also call the project owner and request a visit to their site to develop a more comprehensive proposal. The simple act of showing that you’ve done your research can help you win the contract.
Sell value, not price
Though most public contracts are won based on price, this isn’t always the case. Project owners are more interested in value. If your bid has the best return on investment, the project owner will choose you even if it is the most expensive. Just remember, you must always justify the price.
Price wars will make you more competitive, but can affect your profit margins. Also, you might be forced to use low-quality material, resulting in legal disputes with the project owner.
Another measure that you can take to create competitive bids is to set up a task force specifically for construction bid proposals. The purpose of this task force would be to identify bids that you qualify for and brainstorm ways in which they can offer value for money. Additionally, the task force should be able to extensively research the client and use modern accounting and simulation software.
