8 Bidding Mistakes And How To Avoid Them
Bids can be a way that helps construction companies stay alive, it is the way to get jobs and increase revenue. If you are unsuccessful at the bidding process, chances are you won’t last long in such a competitive market.
Understanding the process, getting your bids done correctly and quickly is the best way to improve your business and get the best construction bids. A good bid will not only get you the job but also generate a positive reputation to help you earn more jobs and contract opportunities in the future. While bidding appears like a more basic aspect of the construction industry, there are many ways it can go wrong.
We have compiled a list of the top eight most common mistakes contractors and general contractors make during the bidding process so you can avoid them.
1. Incorrect Math
An important part of a successful bid is that it gets back to the potential client quickly. However, speed can be a gateway to mistakes, especially when there is a substantial amount of math involved.
The worst thing you can do is have a math error somewhere in your calculations that throws the whole bid amount off.
It can be easy to do since each piece of the project is built onto the next to complete the finished result. If you mess up on one aspect, it will affect everything that happens afterward.
Take extreme care to do all of your calculations correctly and have multiple people take a look to spot any errors that may have been missed.
2. Slow Response to Invitation
While you don’t want to go so quickly that you make mistakes, you also want to get your bid out as quickly as you can.
When a potential client sends out an invitation to bid or a request for proposal (RFP), they’re ready to get started as soon as they can. If your bid is the last one to come in, chances are they’ve already decided to go with another company who responded quicker.
It helps to have a concrete system in place for the bidding stage of projects. This way you can be accurate but fast at the same time.
3. No On-Location Visit
Part of the bidding process for construction projects should be visiting the location in person. This isn’t always possible but it is important to at least try to see the site in person.
Sometimes potential clients may miss crucial parts of the project in their invitation to bid, simply because they don’t have the same construction knowledge as you. Seeing the area in person and getting a good, visual understanding of the scope of the project can help you create a more accurate bid.
4. Only Measuring Once
When you’re doing your on-site visit, it’s likely that you’ll be taking measurements along the way. It is easy, as a professional, to think you don’t need to double-check your work. However, a missed measurement can cause huge problems in project bidding.
Construction costs are largely determined by the size of the object, so getting those measurements right is critical.
This is another area where having a system for your bidding process will eliminate estimating errors that might cost you the job.
5. Omitting Equipment Costs
One of the aspects of most types of bidding in construction is equipment needs. That includes maintenance of equipment your company already owns, as well as if any new equipment that will need to be purchased.
Not every company always has a complete set of equipment and tools available. It’s important to take a deeper look into what will be required for the job to help keep an accurate estimate. You may need to rent or purchase a specialized piece of equipment but both of those costs need to be factored in.
6. Doing it On Your Own
In the end, you don’t need to go through bidding and procurement on your own. There is help available to you to ensure everything goes smoothly and start getting more jobs.
A great resource to tap in to is construction software which has been designed to make the whole bidding process much simpler.
Estimating as well as bid day software, such as BidMatrix, allows you to find all of the information you need to construct a bid, including finding subcontractors. From there it will determine the bid and give you a professional way to send that your bid to the potential client.
Using software as a construction bid source is a great way to eliminate human error and move much quicker.
7. Underestimating Labor Time
It’s true that you can never have a completely accurate estimate. Things come up that are out of our control or projects just take longer than anticipated that can set the whole project back.
This is why it’s important to add in a little buffer of time in your bids.
When you underestimate labor-time and the client has to pay more than you originally said, it’s an opportunity for disaster. It’s wise to give yourself a little wiggle room just in case.
8. Missing Information
There are so many aspects to any construction process and a lot of information that goes in to creating a bid. The worst thing you can do is not ask enough questions.
If you get working on your bid and find there’s missing information, it slows the whole process down and can make you look less professional. It’s important to have great communication skills in construction. The better information flows between all the different parties involved, the better the end result is likely to be.
When you’re in the pre-bid phase, keep a running list of questions you have so you don’t forget to ask them.
Mistakes to Avoid in the Bidding Process
When you continually have problems in the bidding process, your business is going to suffer. It’s the first step of any construction project and is one of the most important.
Once you’ve experienced good construction projects with no bidding errors, it’s easy to see how taking a little extra time and doing things right will benefit your company overall. Avoiding these common bidding mistakes set up you on the right path to deliver accurate, competitive quotes for potential clients.