How to Turn Losing Bids Into a Winning Proposal Strategy
“You can’t win em’ all.”
While this cliche and overused phrase might drive you crazy to hear, it’s never been more accurate than in the construction bidding environment. The fact is, you can’t win every construction bid every time. Nevertheless, it is possible to turn a loss into a profitable learning moment.
In today’s competitive construction world, it’s more important than ever that you win bids, and that starts with understanding why you didn’t win them in the first place. While losing a bid can be a major ego buster, it’s an excellent opportunity for learning and improving. So if you’d like to correct the problem posthaste, it’s time to wrap your head around the potential mistakes with bidding and do away with those errors in the future.
Below, we’ll discuss 13 of the most common reasons why construction bids are lost. In turn, keeping these losing strategies in mind will help you create your winning proposal plan for future bids.
1. You Didn’t Understand the Scope of Work
One of the primary reasons for failing to win construction bids is that you didn’t understand the scope of work. According to Business Dictionary, a scope of work is “The division of work to be performed under a contract or subcontract in the completion of a project, typically broken out into specific tasks with deadlines.”
Sadly, if you fail to fully grasp the scope of work set by the request for proposal (RFP), then you’ll have a hard time setting the right tasks or deadlines and therefore have basically no chance to compile a winning construction proposal. Make sure you read the scope of work carefully. If there’s an aspect that doesn’t make sense or you need more information, come back with any clarifying questions as long as there’s enough of an opportunity to submit before the proposal deadline.
2. The Price Wasn’t Right
If you can’t seem to win construction bid attempts, the price may represent at least part of the problem. Your clients won’t be happy if you misquote prices, overcharge or underbid. Even bidding less than you’re worth is a problem, because it can lead the evaluation team to wonder about your level of expertise.
So remember that quoting both too high and too low is a red flag. While you can’t possibly predict what your competitors will quote down to the dollar, the best tactic is to worry less about under or overbidding. Instead, focus on accurately and reasonably pricing your services based on the scope of work of the project.
3. You Didn’t Explicitly Explain Your Cost
Construction prices are rising. According to Express Capital Funding, “Construction experienced a 2% increase in cost in 2016 and the expected increase for 2017 is between 3-4%. The change is due to a labor shortage and higher wages in a tight market.”
Plus, they add, “Costs of products have increased such as gypsum, wood, asphalt paving, concrete block, and fabricated steel. Regulatory requirements are another cost factor since this adds almost 30% to the single-family home during construction time.” Imagine what an inflation equates to for entire buildings or office parks.
When looking over a bid today, the evaluation team might experience a moment of sticker shock when looking at the price. That’s not to say construction costs are unreasonable or deal-breaking, or that you can’t charge what you’re worth. Your only job: explain your costs explicitly, line by line, and show how hiring you will provide the value they are looking for in a project.
4. You Didn’t Showcase Your Experience
Many companies write stellar proposals, then forget to back them up with proof. Always remember to include relevant past projects when submitting bids and proposals. After all, you’ve done great work, so don’t forget to show it.
On the other hand, you might have to face the reality that you are not fully qualified for the job. Creating a proposal takes significant time and resources; ensure you are focusing on the right projects your team is capable of handling if you want to win construction bids. Otherwise, you could be in over your head in the off-chance you do end up winning.
5. Your References Weren’t Up to Par
References matter, and not just for college applications. Provide the right and relevant references to showcase your performance and track record. It’s better to use fewer references than sacrifice their quality. If you had a rocky relationship on a project, it’s better to leave it off, because it truly can be the determining factor in whether you win or lose.
Even just average relationships aren’t enough to cut it in today’s competitive bidding environment. Highlight the truly outstanding clients you have served in your references, and leave it at that.
6. Your Safety Record Isn’t Ideal
A good safety record means less risk and fewer costs, both of which clients care about. If your safety record is faulty, you aren’t likely to be the winning bid.
If you’re concerned about your safety record, it’s time to institute a new approach. You need to create a culture where safety is prioritized, and that means crafting a careful safety plan and educating your employees on the best means of adhering the standards. For example, here are five simple steps employees can take to up safety today. If this is a problem, it’s the first one you should tackle–both for your chances to win construction bids and for your company’s general wellbeing in the future.
7. You Were Missing Documents and Information
If you want to win construction bid attempts, it’s critical you complete your proposal and bid to the letter. Even one small missing section or document could immediately disqualify you. Ensure you submit everything that is requested. You should double, triple, even quadruple check every part of the document before you submit your proposal.
Want to ensure your proposal includes each and every detail needed to make it a success? Download the “Ultimate Proposal Management and Interview Checklist.”
8. You Didn’t Read the RFP Thoroughly
If you didn’t read the RFP thoroughly, you’re in bad shape. The RFP will ask for very specific information, and it’s best to follow instructions exactly. Don’t deviate from them at all, and adhere to any requirements on page count and specifics for submission. This shows you’re a professional and that you respect your client’s needs and preferences upfront.
9. You Were Late on Submitting
Even one minute matters when submitting a bid. If you can’t follow a simple deadline right at the outset, why should a client trust you to adhere to the years-long timeline with budgetary consequences? Before you submit your construction proposal, leave plenty of time to submit to navigate bidding systems that could be manually burdensome and slow. Bottom line: If you want to win construction bid attempts, don’t be late. Ever.
10. You Didn’t Vibe Well in Person
While you might have made it to the in-person interview stage, if the owner or other project stakeholders involved feel like you’re not a good match personally, it could be a deal-breaker. While it’s wise not to force a working relationship, try to be your best self and highlight how well you can collaborate or compromise when interviewing with stakeholders.
11. Your Proposal Was Unoriginal
Think originality only counts when writing a novel or crafting a sculpture? Not so. If your proposal looks like it was copied and pasted from a direct form, your prospective client will notice. If the project is worth your time, make sure to customize and personalize the proposal. Showcase how your brand and services will be different from your competitors, and make them want to see more from you.
12. You Don’t Use the Right Tools
Using the right tools and equipment on a project matters to its success. In your proposal or interview, you might specifically state digital tools you will be using or have used on previous projects–but are they the right ones? An owner might have had experience using specific software and technology tools in prior projects and might be looking for them. Do your research and keep up to date on the latest innovations in the industry and can showcase their value in the proposal.
13. You Didn’t Proof Your Proposal
If you have a solid bid, a small typo here and there is likely not going to be the dealbreaker. However, mistakes and sloppiness in a construction proposal generally communicate something bigger; either your bid was rushed or the quality of your work won’t be up to standard. If you’re on the shortlist, a few mistakes could easily push you below the consideration fold. Before you hit submit, make sure a few sets of eyes have looked it over. It’s also wise to keep in mind that a well-written proposal is important, but checking the math on the pricing is also essential as a small miscalculation could mean dramatically over or underbidding.
When in Doubt, Ask for Feedback
While the above errors are common reasons bids are lost, they’re not the only reasons. You won’t necessarily know definitively what you could have done better if you didn’t win a construction bid. That’s why you should always ask for feedback, whether you win bids or not. You can only perfect your own processes and bids if you have input, and you usually won’t get it unless you ask for it.
Resources to Win More Construction Bids
Frustrated with the lack of winning bids your team is producing? Luckily, we have a few resources for those looking to perfect their proposals today. If you’re aiming to level up and create your best proposals yet, check out our latest ebook, “The Ultimate Guide to Proposal Management and Interviews“, as well as our accompanying checklist to keep you on track at every step of the process.
Other than that, let common sense rule the day. You know your clients and prospects best. Some like to move forward quickly, but don’t let that distract you from creating a well-thought-out bid. Others like to quibble over every detail, but don’t let that stop you from remaining firm on the points that really matter. In the end, winning a construction bid is only worth it if it leads to a solid long-term relationship with the client, so put common sense and respect first, and you’ll do just fine.
While you surely can’t win every bid, it is possible to start winning more by refining your strategy today.