Winning the Work: Tips for creating accurate, competitive and profitable bids
How you craft your bids has never been more important. In an economy where more companies are competing for fewer jobs, you have to make sure that your bids are carefully created and include everything that could make the difference between winning the work and losing it to a competitor.
With the introduction of many different bidding software programs, you have the opportunity to bring your bidding process to a higher level of consistency and accuracy.
Combine those business applications with your growing abilities to monitor and manage machine and site data, and you have the tools you need to build bid proposals that stand out from the competition in terms of their approach and attention to detail.
But even with all the software and data tools available, there are some elements of bidding that can be overlooked or miscalculated. Here’s a checklist of bidding reminders you can use to help keep your bids accurate and profitable.
- Review plan documents provided in DETAIL. This may seem really obvious, but many times important details about the project are masked by fine print, lengthy lists or just plain confusing writing style. Collect all the documents, grab your highlighter and review the plan and scope carefully.
- Attend all the pre-bid meetings/conferences. While this seems simple, many of your competition will assume that if they have the documentation, there is no reason to attend the meetings. Often times, additional information becomes available or you are given the opportunity to ask questions.
- Visit and document the site. This will determine the project plan. Many times, photos do not tell the whole story, so it’s always best to walk the site in person.
- Make sure your labor costs are current. Changes can occur with sub-contractors’ rates; be sure the most current are included. Also look for any specific sets of minimum wages that might be required by state or federal projects.
- Validate your material pricing and delivery. If you have historical data available from similar projects, you can base your estimate on actual costs and plan your profit margins accordingly. Procurement is an often miscalculated area of bids—whether prepared with software or not—so be sure to detail schedules and material deliveries.
- Carefully evaluate your equipment costs. Equipment costs comprise a significant portion of your cost estimate, so it’s important to accurately determine the cost you will include for your machines. Most companies use average rates for machines of a given type or size class. However, these average rates are built upon the real costs of running the equipment in particular applications. A common mistake is to fail to regularly review the variables that create the “average equipment cost” and update them. For example, fuel costs are constantly changing—sometimes with a wide variance—and need to be updated regularly. You want to audit equipment costs often to ensure that you’re competitive and also adequately cover the cost of running the machines.
- Use telematics and machine technologies to boost your bid accuracy. Technologies that provide detailed information about your equipment such as fuel consumption, production time and idle time really add value in the bidding process as your information can be detailed and current to your most recent project.
Finally, remember that your bid submissions are a reflection of your company and your work. Provide the required information in a clear, easy-to-review format to gain credibility and consideration. Think about what the owner has to base the decision on—price is certainly a big factor, but it’s likely not the only factor, and it may not even be the number-one factor. The decision will be based on the confidence level the job owner has in a given contractor. And unless you already have a great relationship with that owner, your bid proposal is the best chance to earn that confidence.