Securing a construction project relies on how accurate your prepared construction bids are! Especially in the competitive environment of the USA construction industry, your bid document must be flawless. It shows how much your company is capable of handling things. From securing profitable projects to growing your business, this document is one of the most important factors. That is why, before launching your company or selling your services, understand all the criticality of construction bids.
Today, contractors are stuck with advanced and complex building structures. Investors’ demands are becoming unique day by day, which requires accurate projections regarding every construction element. One of the most important ones is the construction budget. That is why contractors seek help from professional construction estimating services and save from overspending. This strategy is crucial for winning construction bids.
Let’s first describe the ins and outs of a construction bid:
IF YOUR COMPANY IS LOSING MONEY ON THE TABLE BY SUBMITTING BIDS, THEN LEARN ABOUT THE CONSTRUCTION BIDDING PROCESS, UNDERSTAND EVERYTHING TO WIN PROJECTS!
What is a Construction Bid?
A construction bid is a written proposal submitted by a contractor to a client. The clients are usually general contractors or project owners to win bids.
The whole concept of submitting construction bids is to show your ability to complete the project successfully. You have to show them that you are the only suitable companion for the required job.
This process is usually named:
- RFP – Request for Proposal
- IFB – Invitation for Bid
Well, the most reliable construction bid is that which balances the project budget while fulfilling all the requirements. Plus, it should also provide a reasonable profit margin to them. However, you need to dig into the most important steps, which are:
The Construction Bidding Process
1. Bid Solicitation
The process begins when the project owner issues documents. These documents contain information about:
- Scope of work
- Drawings/specifications,
- Contract type
- Delivery method
- Submission deadline
2. Site Visit
Now the contractors review these documents very carefully. However, the site visit should not be neglected. Before starting the construction bidding process, you must visit it. This will give you extra information about the location and existing conditions.
3. Bid Preparation
This is the core of the process. Mostly, contractors outsource professional construction takeoff services for this step to get accurate quantities of project components. After that, they evaluate the cost per unit and by construction trades one by one. It includes:
- Materials
- Equipment
- Direct Labor
- Subcontractor Quotes
- Overhead
- Profit Margin and Contingency
4. Bid Submission
The completed proposal is submitted on the basis of the deadline. It is essential that the bid be accurate and include all necessary documents.
Keep in mind, if you are late, you will be out immediately.
5. Bid Leveling
In the next step of the process, the project owner reviews all received bids. Bid leveling is the critical process of comparing proposals “apples-to-apples.” They compare all the proposals according to the project specifications.
6. Bid Selection
The owner selects the winning bid. Do not be mistaken about, lower bids always win the race! The best value secures its position, which is according to the project budget and demands. After the selection, terms can be negotiated, and the contract price is finalized.
7. Contract Formation
After negotiations, a legal contract is signed. On that contract, all the terms and conditions, payment schedules, and responsibilities are included.
Best Winning Strategies for you!
Focus on Quality Leads
Do not randomly pick the project and waste time. Be selective and only bid on projects that:
- Align with your expertise
- Fit your capacity
- Offer profitability
Use Technology and Data
Use modern estimating tools for accurate projection and speedy results. With the help of data analytics, you can achieve more accurate results.
Emphasize Value Engineering, Not Just Low Price
Do not focus on low prices. Rather, put more focus on proposing Value Engineering alternatives. This will help you improve the project quality under budget.
Able to Manage Risk
Keep in mind that clients always see through you, whether you can manage the risks or not. Include or highlight specific features of your work that show how you manage complex situations. This will build your trust!
Final Thoughts!
However, preparing construction bids is never an easy job. When you are in a line of competition, you have to be prepared for every type of situation. This broadens your mind and helps you stand out in the market. It is highly recommended to adopt advanced methods for accurate and speedy results. Focus on every step of the bidding process to deliver flawless evaluations. Busy contractors can increase the bid win ratio by strategically handling everything. You cannot only attract new clients but also grow your business day by day.