The Bidding Process
One of the most important skills needed by a contractor and many other businesses is the ability to accurately bid on jobs.
An error in bidding can be a costly mistake for a any company that must honor the final contract value and potentially leave a project with no profit. On the other hand, over-bidding a job can result in lost business opportunities and a reputation for being "pricey."
For a construction firm, the process of putting the price together requires the cooperation of many people. As a general contractor we look to our own estimating department of course, but in turn they need the assistance of material suppliers and our many subcontractors. Getting the bidding documents out to these various sources today is done primarily by means of the internet, but an average bid period still requires 10 to 14 days.
Once the correct pricing is determined, a bid must be put together professionally. Every foreseeable nuance should be included in the proposal to make the bid complete and to cover all aspects of the contract, such as deadlines, location, material cost, potential unforeseen conditions, long lead items and the impact on scheduling.
Writing a bid or proposal requires more time than many people realize. While pricing is a very important part of the proposal, “the devil is in the details.” In fact, the details provided in the proposal letter are often critically important, as they clarify and support the pricing.
During the bidding process questions should always be submitted in writing to the owner or owner’s representative. A complete proposal should provide the client with a clear understanding of what is INCLUDED in that proposal as well as what is EXCLUDED in the proposal. Omissions in this area are not only costly, but can also compromise relationships.
Construction, like many industries is very competitive. If at any time during the bidding process a bidder decides that their firm will not be bidding the project they should notify the owner immediately, thus giving the owner the opportunity to select another bidder. This is a common courtesy and also leaves the door open for future bid requests.
Given the time and resources required to properly respond to bid requests, a common challenge is to maintain sufficient staff to complete the bids on a timely basis without adding to the firm's
fixed cost base, which can result in the need to increase prices. Leveraging technology and trusted relationships are key elements to timely, reliable bidding.