Project bidding isn’t only about low-balling the competition. There is an art to knowing which projects are the right fit for your contracting business. From initial research to calculating costs, industry pros follow these key steps before submitting a bid.
How to Easily Improve your Project Bidding
1) Research the Project
No matter how you have heard about a new project, it’s important to do as much research as possible. If you get the blueprints or read the project details, you can gain a clearer understanding of what needs to be accomplished. This will give you a better chance of avoiding surprises, which often lead to cost overruns down the line.
2) Seek Clarification about the Job
If you are interested in the project, you could benefit from scheduling a meeting to learn more. In the project bidding process, it’s vital to ask questions, because incomplete or vague plans can cause major headaches during construction. You also want to make sure nothing is missing from the specifications, like permits or fees.
3) Identify Risks
Since no project goes exactly according to plan, you will need to assess its risks before submitting a bid. First, identify all the possible risks, such as a rise in the cost of construction materials. Then, consider the probability and impact each risk could have on the overall project. If you can anticipate issues early on, you will have a head start when you need to build contingency plans.
4) Calculate Costs
The next step in bidding for a project is to determine how much you think it will cost you to do the job. You can start by examining the plans and specifications. Then, set up a running spreadsheet to keep track of your calculations and include the following:
- Break everything down into categories of materials, like concrete or steel.
- Don’t forget soft costs, such as permits and trash removal.
- Estimate the total labor costs for the entire project, including hourly wages, man hours required, insurance and/or the use of subcontractors.
- Double check your number and confirm your measurements.
Since all these calculations can be complicated, many contractors today use construction bid estimation software, which automates job costing.
5) Draft your Bid
The proposal process is very important, because conflicts can often arise over small details of a contract. As you draft your bid, try to keep you’re the details of your proposal to a bare minimum. At a meeting, you will have the opportunity to better discuss the possibility of upgrading the project, improving the quality of materials used or any additional items.
A good proposal will outline these main points:
- Scope of work
- Total price
- How payments should be made
- Work schedule
- Change orders clause
- Insurance specifications
- Supporting documents
If you perform all of this project bidding work upfront, it will not only help you score more jobs but it will also help you avoid more conflicts.