Construction bidding is the most common ways to win jobs in the construction industry. One of the issues with bidding is that it means that work isn’t guaranteed. Good construction bids will look identical, making it harder for subcontractors to stand out. And bidding on every potential job isn’t an effective or efficient use of time. Here are some steps to help your contracting business win the right jobs.
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How Bidding Works?
Bidding is how most construction companies get projects. There are many bidding platforms (which we published here) that offer contractors and subcontractors the ability to find work. However, unlike in other fields, bidding doesn’t guarantee subcontractors and contractors work. Whoever publishes the job goes through many of the bids to determine which one is the best for the project.
The problem for subcontractors and contractors is ensuring that their bid ends up in front of the person or company that listed the request for proposal. Some subcontractors and contractors utilize their connections and reputations to ensure their bid is read. This strategy is something the Dodge report knows that every company can use in order to bid smarter.
What Goes Into a Bid
The first step in the bidding process beings when a company or person lists a request for proposal. This is how subcontractors and contractors know that there is work. However, they will usually find this work either on a bidding platform or through word of mouth. Preferably, a request for proposal is listed along with all of the appropriate documents to ensure that companies can provide accurate estimates. While that’s not always how it works out, that is the general starting measure.
The next part of the construction bidding process is the development of the bid. Whoever prepares the bid must remember a few key points. The bid overview should hit all of the keywords in the RFP’s summary or overview. This helps the company know that the bid preparer read the bid. Next, there is usually a summary of the work proposed and concerns about it followed by details. The details would include the work timeline, any equipment assets, an itemized cost list, and total pricing. These details are usually the bare minimum needed. Some subcontractors like to include proposed contracts so there are fewer surprises. However, the bid preparer must include an itemized estimated cost list. When a company is given a lump sum rather than the broken down list, sometimes it is off-putting.
Just knowing the basics of the bidding process isn’t enough to ensure that you’re bidding smartly. With some contractors reporting their bid-hit ratio at 35:1, bidding smartly is crucial to surviving. Few subcontractors track the number of bids they submit and the number they win, some estimate it at less than 25%. However, this is an important number to track. Using the data available, it’s easier to find patterns in the bids. These patterns will help you create smarter construction bidding habits.
Making Construction Bidding Smarter
The Dodge Report from Dodge Data and Analytics is a great tool for subcontractors and contractors wishing to bid smarter on their next jobs. Dodge Data and Analytics is a construction data company. This means they analyze data within the construction industry, from whether the industry is rising or if there are fewer projects. They have data on many aspects of the construction industry and use it to help the industry as a whole. Dodge also has a construction bidding platform that uses smart data to better help subcontractors win bids.
Steps to Bid Smarter
Know Your Area
One of the easiest ways to be able to get ahead is to know who is the busiest in your area. The busiest general contractors or land developers will always have something to do and are an important member of your circle. Using data from places like Dodge construction bids, or a Dodge report to better understand your region is a great first step. Once you know who the most active or key players are, you know who to reach out to in order to get noticed.
Work the Network
Social media sites are one of the easiest ways to network nowadays. By connecting with a person on LinkedIn, it is easier to see their network of connections and committees and other organizations they belong to and find common things to talk to them about. While a good construction bidding database will have the contact information of important players for a project, connecting with people outside of email is successful. Because when they post a project, they will be inundated with emails and phone calls from interested contractors and subcontractors.
Focus on Prequalification
The bidding time goes quickly. And many general contractors and owners have a list of subcontractors that they’ve worked with before and that they know are qualified. If you are trying to break into their database getting in early is crucial. Reach out to your network to better understand the prequalification requirements they require. From there you can prove your qualifications before a request for proposal is even posted.
Smart Bid Lists
Subcontractors can use construction bidding platforms to find projects. However, an easy way to get in early is to look at projects where the general contractor hasn’t been listed yet. By using the documents from the overall request for proposal, you can put together a quote that you can send to all the general contractors. This helps them with their estimate while putting your business in front of their company.