How to Bid Commercial Plumbing: The Ultimate Guide

How to Bid Commercial Plumbing: The Ultimate Guide

A residential plumbing contractor has the benefit of setting the price they want through an estimate, whether it’s a flat fee or hourly rate. The onus then falls on the customer to decide whether they want them to complete the job or not. However, if you’re in commercial plumbing or a general contractor trying to get into commercial plumbing, things are quite different.

A large job will generate a lot of interest, which is why the client will most likely be taking bids. A successful bid isn’t just about racing to the bottom to draw a client in. Instead, you need a deep understanding of what your business is capable of in terms of expertise and finances. In fact, you could argue that winning with a bid that’s too low to make a profit is worse than losing out. So, to make sure you strike that key balance, here is how to properly bid commercial plumbing. 

The Basics On Bidding For Commercial Plumbing Jobs

Before getting into how to bid commercial plumbing, we need to talk about the steps that the client takes. You, as a plumber, generally find out a job is available through either an invitation to bid or request for proposals. The invitation to bid, or ITB, is generally a formal invitation that implies the client wants a fixed-price contract with your company. A request for proposal is a less rigid form of request. The client will still have specific parameters for the job they want, but they are likely to accept more wiggle room in terms of the pricing and scope. 

For both an IFB and RFP, you’re still going to need to have to provide a submission with certain information. This includes not only your bid, but also:

• -Past projects you have done
• -A basic plan on how you will approach the job
• -Evidence showing you stay on schedule and on budget
• -Contact information for the business, in case there are further questions

If this sounds a lot like a resume for a conventional job, that’s not a mistake. A bid submission is a two-fold project. Not only is there the bid itself, but also your company proving it’s suitable for the job. Note that you also need to showcase information justifying the bid that you’ve created. This generally includes past similar jobs, as well as a rundown of the expenses you expect to incur. This can include:

• -Labor
• -Equipment
• -Time spent (if an hourly rate)
• -Additional expenses

After this, the ball is basically in the client’s court. Certain government contracts may have provisions to default to the lowest bidder, but in the private sector, the client gets to choose who they work with. This means that there’s an added layer to your submission. Just going for the smallest price doesn’t mean your bid will always be accepted. Clients want proof that you will be able to do the job well, as well as at an affordable rate.

How To Get More Plumbing Business With Your Bids

This explains how the actual bidding process works. But what can you do to further stack the deck in your favor for success?

Presentation matters: A bid proposal may not be a public-facing document, but that doesn’t mean that aesthetics and organization aren’t important. Chances are that a prospective client is going to be visiting and revisiting that document while deciding who they want to work with. This means that you want a document that they can quickly reference to see things like what type of price you are asking for and how you arrived at that number. The longer this takes for them to do, the less a chance of you having your bid accepted.

Read and reread the client expectations: In some cases, an IFB or RFP can be unclear. Don’t be afraid to ask the client specifics as much as possible. The more detail they can provide, the better you can put together a bid that matches everyone’s needs. Sometimes, the IFB/RFP is extremely vague, and you can’t get much clarity. You may want to reconsider working with that particular client. There’s a good chance they don’t entirely know what they want, and that could lead to a lot of frustration and perhaps no real profit.

Add that extra 3%: You can be the most diligent record keeper/calculator in the world, and there’s still a solid chance that you’re going to have expenses that you weren’t prepared for. Factoring in an extra 3% in your bid will help provide you some coverage in the event that this happens. Better that you account for it right away than risk a job becoming unprofitable due to one isolated event.

Prepare to negotiate: Between the initial acceptance and signing of a contract, you will have the opportunity to negotiate. Take advantage, but don’t suggest anything that’s too far off from the bid price that was agreed upon.

Implement technology: Technology can play a key role in improving your bids and proposals alike. We mentioned the aesthetic factor earlier, so consider investing in template software to make sure you have a well-organized bid sheet to present.

But what about actually estimating the costs of plumbing jobs? You could argue that it’s more important, in this case. As we’ve been mentioning, you need to fully understand the job you’re bidding for and the status/history of your company before making an effective bid. 

In order to properly bid a job and work with a good profit margin, you need effective data and a complete understanding of how you do business. This requires project management software, like eSUB. Keeping track of all your previous bids, actual costs, and additional expenses will help you create the most accurate bid that is appealing for possible clients while also helping your business turn a profit.