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Bid Less, Win More: How to Master the Construction Bidding Process

Bid Less, Win More: How to Master the Construction Bidding Process

The Ultimate Checklist for a Successful Bid

As professionals, we all know that the construction bidding process can be frustrating. To keep their companies profitable, many contractors will simply bid on as many projects as possible, often undercutting their services to stay competitive. In fact, some contractors have reported they win only 1 out of every 35 bids. That low bid-to-win ratio is not only a massive waste of your time, but you risk losing employees and assets if you can’t afford to properly manage the few projects you do win because you’re not turning a profit.

The question remains, how do you balance your time between selecting and finding the right opportunities and creating impactful proposals, so you can improve your bid-to-win ratio?

We’re all familiar with the sage advice that quality, not quantity that matters. The same applies to the construction bidding process, where the outcome of one successful bid shouldn’t have to be a result of creating countless proposals for jobs you aren’t a good fit for regardless and that undervalue your services as a professional. Of course, there will always be some projects that will be awarded simply based on price, but a solid – indeed, a winning – proposal should exhibit your unique advantage as a firm and the value and expertise you can bring to the project, separate from cost.

The truth is, you’re not alone. It’s a universal problem for construction firms of all sizes – determining which projects are worth bidding on and then crafting a compelling, comprehensive, and winning proposal. However, with the right knowledge and tools, learning what to look for in an invitation and what information must be included in a successful bid, can help you drastically improve your success rate, and in turn, spend less time bidding and more time completing projects. Below, we discuss not only why a quality bid matters, but provide everything you should know on how to craft a proposal that increases your chances of winning more jobs that are right for your company.

Why Aren’t My Bids Working?

You have the skills, the right team in place, and the commitment to getting the job done right every time – so where is the work? If your construction proposals are falling short or you are simply missing the mark, then you simply won’t win as much work as you would like. An assessment of the bidding and proposal process can help you refine your approach, and raise the probability that you’re able to compete for the best projects and clients.

What is the Construction Bidding Process?

For owners and general contractors, a firm understanding of how the bidding process works allow them to find the best possible team for the job at the most competitive rate available. On the bidding end, being able to craft a compelling and accurate bid improves the likelihood that you’ll have plenty of work flowing in, keeping your revenues steady, and keeps your best talent moving from one compelling project to the next. For instance, when a general contractor has a project to deliver, they will split it up into packages, such as drywall, plumbing, or mechanics, and invite subcontractors to bid on specific parts of the job defined by these specialties. Since a general contractor often contracts out these key project elements, understanding the construction bidding process is important for all involved.

As a bidder, the information revealed by the owner or general contractor in the invitation stage allows you to not only accurately assess the job and come up with a bid, it also ensures you can target the right types of jobs and clients. Not every invitation will be a good match for your brand and not every job is worth the time it takes to craft a winning proposal. The goal for bidders is to identify which projects are worth the time, then craft a compelling, accurate, and detailed proposal that ups your odds of winning and gets your brand the attention it deserves.

Read. Bid. Win.

As the name implies, bidding means no guarantees. However, the construction bidding process itself is relatively straightforward and a firm understanding of how it works can help you mitigate that risk. As a contractor or subcontractor, you will find and read bid packages that outline the job, place a competitive, compelling, and comprehensive bid, and then, ideally, win the job. The details do matter, though. Spend too much time crafting proposals for jobs that aren’t a match, and you won’t be able to focus on the good projects that are out there. Alternatively, if you send out incomplete or inaccurate proposals, you’re wasting your time. At times, the whole process can seem like a balancing act and challenges faced by bidders include finding projects, selecting the right projects to bid on, and of course actually crafting compelling, winning proposals.

Bidding Challenges

Generally, most contractors face one or a combination of these common challenges when they look for additional work using the construction bidding process:

  • They have difficulty finding bid packages to work with at all
  • They can find bid packages, but have trouble crafting a winning response
  • They are applying for the wrong jobs or for any job they can find, resulting in a steady stream of low-paying jobs
  • They can find bid packages but they struggle to find the time to actually bid for new work – until they run low on projects
  • They lack confidence in their ability to produce a bid that gets attention and generates results

Be that as it may, a better understanding of how the construction bidding process works and exactly what clients are looking for, coupled with the right tools for the job, can help you quickly and effectively submit a competitive proposal that you’re more likely to win.

The Construction Bidding Process – How it Works

Your bid proposal is kind of like a resume or a job application; it will make a first impression on the client, let them know how qualified you are, and even give them an idea of what to expect when they work with you. If your first impression, or bid, is intriguing to the client, you’ll move to the Interview stage, dramatically increasing the odds you’ll be hired for the job.

You’ll find bid invitations in a variety of places, from your local government to sites like BidPlanroom or BidClerk. Simply download the application package and review it carefully to gain a firm understanding of what the job is, what skills the owner desires, and any preferences or specifications they have for the job. This is also the time to make sure the package is truly complete and that the owner or contractor has a realistic idea of what the project will cost and how long it will take.

During the review process, you can eliminate packages that are not complete, not realistic, and don’t match your business size or your particular skill set. Applying for everything is a waste of your time – and so is applying for jobs that are not an ideal match for your skills, unless you have a compelling reason to do so. Every bid you craft will take time, so use those hours wisely and focus on projects that are appealing, realistic, and ultimately winnable.

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Provide Basic Information and an Overview

Once you find the right opportunity to bid on, the construction bidding process begins and you’ll start to draft your proposal. First, make sure to add basics like your company information, your name, logo and other details about you. Include details about the project, covering who the bid is for, what the project is, and when it is being prepared. As a basic, providing an overview of the project that also showcases that you read and understood the brief, can give the reader a reason to go on and ultimately improves your chance of success right off the bat. Some bids are actually eliminated at this stage because they do not fully address the needs of the client. So, if the job is “add tile to existing floor” then the words “add tile to existing floor” need to be in the overview of the project.

Scope of Work Summary

One of the most critical sections of the construction bidding process is the Scope of Work Summary. Using the details and specifications found in the project bid, craft a full summary of every aspect of the project for the scope of work summary. Here, incorporate any drawings, photographs, plans, or details to provide a comprehensive look at what you propose to do.

This is the section for specifics, including the materials needed, the number of workers, equipment, and other provisions. If there are any details or items that have not been determined or aren’t in the original bid, provide a clear list of “Assumptions” or “Clarifications” with reasons why they have been included in your bid. This list will let the client know that not only have you thought about what’s immediately apparent, but that your understanding of the project is deep enough to consider these edge cases.

This section in your proposal is the chance to showcase your full understanding of the project, your ability to deliver the desired result, and to reveal “how” you’ll address the project and get the job done. By fully addressing the project’s unique needs, you’re communicating to the client that you’re a good fit to handle the project, in all its complexities, enhancing your prospect of being chosen for the job.

Highlight Any Stipulations of Concerns

If you have reviewed the bid invitation and have concerns about liability or risk, reveal them here. If there are code requirements, potential changes, or other concerns about the specific project that you anticipate, include them in this section.

Create a Timeline

Make sure your proposal includes a comprehensive timeline or schedule for the project, or your part of it. Include milestones like when the work would begin and end, how long it will take, and any other details, like key dependencies, that the client would need to know to fully assess your proposal.

List of Equipment or Assets

What else is needed to complete the job? If you need to rent or deploy your own equipment, what costs are involved and how many days/weeks will you need those pieces for? Similarly, if you expect things like power or fuel to be provided by others, be clear about this in your “Assumptions” or “Clarifications” list.

Breakdown the Costs

Be specific when you breakdown the costs by specialty and project area. If the project you are bidding on has multiple components like plumbing work, HVAC, and painting, include costs for each in your bid. In this section, you should showcase your process, transparency, and what you are able to provide to address all the owner’s needs in detail.

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Overall Pricing

In addition to the cost breakdown, include the total costs along with your fees, contingencies, allowances and other mark-ups required make up the total cost for the project; good construction software will make this process a lot easier.

Conclusion

At the end of your proposal, wrap up your bid by thanking the project owner for reading and considering you for the job and let them know how to contact you if they need your help or further details. At this time, be prepared to present and defend your bid in person if you’re short-listed for the Interview stage.

Include a Sample Contract

A sample contract will allow the buyer to get an idea of exactly what to expect and let them see your terms and conditions, along with your expectations about payment and dates as well.

Proof Carefully

Once you are content with the information presented in your bid, don’t forget to give your work a final look. If you’ve used construction software in the construction bidding process, then you’re ready to send. If not, carefully proof your bid for clarity, grammar, and spelling. You’re not applying to work as a writer or English teacher, but a good, solid construction bid needs to be error free to avoid distracting the reader. Errors can also impact how the client sees your bid – if your writing is sloppy, your approach to the job could be as well and could risk damaging your professional image.

Add your Branding

You’ve worked had to create a recognizable brand, so make sure the proposal truly reflects it; add your logo, use your brand’s colors and images and produce a finished product that is instantly recognizable as yours. Whether the project is being submitted digitally or in paper form, it should include your logo and branding to add an extra element of professionalism and emphasizes your great reputation.

Submit and Apply

At this point, your bid is ready to go. The client may have included specific directions and submitting guidelines; make sure you take note and follow them to give your proposal the best chance of being seen and reviewed.

Improve your Chances of Winning a Bid

Realize It’s Not All About Money

The winning bid may be competitive, but racing to the bottom won’t help you outperform other contractors, and you could end up losing money if you are awarded the job. The fact is, undervaluing your own work doesn’t lead to more money, just to more risk. Instead, if you want to improve your chances of winning more bids, provide a detailed account of your expertise and a thorough, targeted, and compelling proposal, rather than bidding as low as possible.

Use Technology to Save Time

If you’re opening up a Word document every time you need to make a bid – or worse, filling out proposals by hand – you’re not making the best use of your time. Yes, a good proposal should take an investment of your time and attention, but the right tools and technology can help you systemize the process, maximizing your efficiency to create solid and attention-getting bids.

Bid on the Right Projects

As mentioned, bidding on every and any project that becomes available isn’t the best strategy. When you carefully review the details of a project and fully understand what is involved and what your own costs will be, you can make a strong case for the number of projects you bid on, and hopefully win, without reducing the number of projects you’re awarded.

Alternatively, review the bid package carefully to determine if there is a clear start date, if the client has a realistic idea of cost, and search for any red flags that could reveal that the client is not really ready to launch or just fishing for information. Since every bid proposal you put together eats up a portion of your valuable time, you need to be able to identify serious buyers that would be a good match for your skills and projects that are going to be profitable right up front. When you read bid invitations with a critical eye, you’ll determine just how appealing that project actually is and if it is worth your time to craft a bid proposal.

If you find your bid to award ratio very low, examining both the way you are creating bids and the projects you are bidding for can help you become more successful. When you can submit more effective proposals in less time, you improve your chances of winning a bid and your ratio will naturally go up over time.

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Create Templates

Even when you’re more selective with how you bid, it’s useful to create a master template to work from that incorporates all of the items that need to go into each proposal and use it as a launch point for each bid you draft. You can refine this document as needed or as your business and offerings grow. Nonetheless, having a template ready as part of your construction bidding process to go can save you time and allows you to plug the numbers, information, or even pages from the invitation and from your construction software right into your proposal package.

Understand that it may take some time to create and refine a proposal template you like, but having a piece that simply needs to be modified to address the client’s specific needs will save you heaps of time, streamlining your process to find more bidding success.

Track your Success

If you are not already doing so, tracking the jobs you are bidding on, including what you sent and what you received in response, can help you analyze and modify your approach to proposals over time. Any feedback you get from a client can be assessed and acted on as well. Eventually, your proposal technique will evolve as you find what works in your niche and for your clients. As you continue to refine your approach based on your tracking insights, your success rate will naturally begin to climb.

Construction Software Improves the Bidding Process

Paired with comprehensive knowledge of the construction bidding process, software can considerably improve the quality of your bids, boosting your chances of winning the right projects. When you can plug actual numbers in and get a real look at what that project will be like for your team, you can place accurate bids with confidence. The quality of your proposal really matters and when you can provide real numbers, quality estimates, and full details, you have a much better chance of impressing the owner.

On the other hand, for borderline projects where you’re not sure if the job is worth the time it would take to complete a full proposal (or even do the work itself), construction software can give you the level of detail you need to make a decision about bidding. You’ll also get a truly accurate idea of how long the project would take, what your costs would be, and even any specific risks or problems that could occur. Evaluating the projects you are considering with the help of intuitive software allows you to make the most of your time and avoid bidding on projects that aren’t going to produce the right amount of revenue or profit for your business.

Bid Like a Winner

It’s time to stop bidding to survive, and start bidding to win. Running a business can be a lot like gambling, and the odds (or competition) can often seem at times stacked against you where lowering your bid feels like your safest option. But with the right tools, including software that’s proven to ease and improve the construction bidding process, and a solid strategy to position your company as a serious player in the market, you can start to increase your odds of winning more projects, without undervaluing your service. In a matter of no time, you’ll spend less time bidding and more time winning jobs since you’ll have the right tactics and tools in place to effectively evaluate the right opportunities and ultimately create proposals that set your company apart.

Looking to bid smarter? PlanGrid can help you build bids faster and get them to the right companies and opportunities. To help you get started bidding like a winner, we created a complete checklist of the most important inclusions required for a successful bid, as well as extra strategies to take your efforts to the next level. What do you think is the most important step in the bidding process? Include your thoughts in the comments below!

Ultimate checklist for construction bidding process

Lynn Langmade

Lynn Langmade is currently the Director of Content Marketing at PlanGrid, where she develops content strategy, manages the editorial calendar, and oversees content production workflow. Lynn is also the managing editor of PlanGrid’s corporate blog and social media channels.

As an early adopter of social media, Lynn has over 45 thousand followers on social media. In 2014, Lynn was the recipient of the Marketo “Revvie” Award in the Socializer category. She has a PhD in English and over 15 years B2B high-tech marketing experience.

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