As a concrete contractor, you’re likely to get the bulk of the jobs your company has through bids. This applies to residential, commercial, and industrial jobs alike. However, putting together a bid for a client is more than just throwing together an arbitrary number. It requires you to have an intimate understanding of your business’s working capacity, financial status, and area of expertise. Being constantly outbid can be frustrating, but winning a job with a bid that’s too low to make a profit on is arguably worse. Here’s a full understanding of the process of how to bid concrete jobs so you aren’t caught in either scenario.
The Fundamentals Of The Bid Process
Note that different jobs for different industries are going to have a different bidding process. For example, government jobs have a highly regulated bidding process. However, for private projects (residential, commercial), there’s a lot more flexibility in terms of how the process can go. With that said, generally, concrete bidding follows a three-part phase.
Solicitation: Learning how to bid concrete jobs begins not with the concrete company, but with the client. The client starts by sending out an invitation for bid (IFB) or request for proposals (RFP). For public projects, these are generally massive open invitations for any company. For private ones, the client will generally send their invitations to a small subset of contractors. This can be based on past experience or just their own market research. The IFB/RFP will have key information including:
-The final contract type
Submission: This step is the initial response that you and the concrete contractor provide to the bidder. This includes:
–Basic business contact information
-A list of all your relevant past projects
-Plans you have to manage the job
-Any evidence you have to show that you have a history of keeping to your schedules and budget
-A bid estimate
Naturally, the bid is the central part of this submission, so you want to make sure you have as much information as possible that explains how you arrived at the given number. This includes your estimations for:
You also want to make sure your profit margin for this job is appropriate when submitting your bid.
Again, this is an area where private and public projects are different. For a government project, rules are in place that generally favor the lowest bidder or one of the lowest bidders. This reduces the concern of favoritism. For private projects, there is a bit more flexibility. While the price is still an essential factor, if your bid is similar to another company’s bid, there may be other factors that push you over the top.
After the client chooses their bid, the contract still has to be finalized. The contract type is likely already established in your initial proposal, but you may be able to adjust individual terms as well as the pricing.
How To Bid On Concrete Jobs Effectively
So, with the process explained, how can you get more concrete construction jobs at a priceline that still helps your business?
Know the location/installation: Whether you are putting down concrete slab on a building or putting together sidewalks, it’s ideal if you can do a walkthrough of the area/plans before you commit to a bid number. This is important because there may be some issues that would slow down your project that you wouldn’t know without showing up in person. This keeps you from accidentally committing to a budget or timeline that you can’t uphold.
Keep a neat presentation: In essence, a bid for a concrete job is a form of a marketing pitch, and you want to make sure that you provide both useful information as well as a solid presentation. This is especially important for the final bid sheet. Ideally, what you want is something that the client can quickly look at to find out exactly what number your company is offering, what you are basing your numbers on, and the different aspects of the job that are included in that figure.
Make sure you don’t miss key aspects of the job in your calculation: There are a lot of different factors that go into a single concrete job bid. These include:
-Subcontractor fees (if applicable)
Underestimating any one of these can leave you with a final cost larger than you estimated. Either the client eats the cost and likely won’t use your services again, or you eat the cost and end up losing money on a job.
Negotiate wisely: In that negotiation stage after your bid is accepted, you want to be careful to protect your interests without pushing too far. Remember, while a little bit of adjustment is expected, your bid was still accepted with the mindset of being in a certain price range.
Use additional resources/technology: Don’t underestimate the role of technology in terms of helping you make better bids and bid proposals. For example, template software and websites are great for helping you create an organized bid sheet without a lot of extra work.
When it comes to actually calculate your number, technology is arguably more important. Creating a bid package as a concrete contractor isn’t something as simple as thinking of a reasonable number in your head and presenting it to your clients. You need to have a full understanding of the job that you are bidding for, what type of impact it will put on your resources, as well as how efficiently you can complete it while adhering to base standards.
This is where concrete project management software becomes necessary, and eSUB is among the best options out there. By having easy access to your historical concrete bids and actuals, it’s far easier to create a more accurate estimate and keep your bids competitive. Don’t underestimate the role of concrete estimating software in helping your company’s bottom line.