Are you struggling to meet project requirements, deadlines, and meeting client expectations? Is work becoming harder to come by? Aside from marketing, bid proposals are your next step to a successful transaction, but you need to learn how to read and respond to them properly for the best results.
For instance, you need to learn how to identify red flags in proposals so that you’re not wasting your time responding to proposals that are set up for another company to be awarded. You’ll also need to know how to properly analyze proposals so that you know exactly what the client needs and if you’re the right company for the job.
Read on to learn all about bid analysis to make the best decisions for your company and improve your relationship with clients!
What is a Request for Proposal (RFP)?
If you’re just getting started as a contractor, the bidding process may seem confusing. Agencies or solicitors will issue requests for proposals (RFPs) or requests for quotes (RFQs) if they want the opportunity to begin bidding on a contract. In the RFP process, you need to be able to accurately assess these vendor bids quickly so that you can determine if you’re prepared to meet the service or good requirements.
How Do You Read a Request for Proposal?
These proposals are typically written in the same format, so once you become familiar with one you can easily read them all. They’re broken down into sections lettered A through M (though not always) so that the information is concise:
This is the introduction to the proposal and always includes:
- Name of agency
- Contact information of the agency
- Solicitation number
- Issue date
- Due date
- Time due
- Table of content
This section is usually formatted as a table. It will also include sections for your own information and signature when you submit your proposal.
Supplies/Services and Costs
This is a detailed section that includes the services and goods they’re looking for along with their budget. Consider the scope of work and whether your team will be able to meet it. You could also consider temporarily hiring more subcontractors to complete the work.
This section will tell you how the agency or solicitor plans to pay for the services or goods. This may be through advanced monthly payments, reimbursements, or more.
Deliveries or Performance
This details the length of the contract. It may also explain the delivery order and task order process. Clauses are also included regarding liquidated damages, stop orders, suspension of work orders, and more.
Level of Effort
This section is helpful because it gives you an idea of how many hours are expected for the contract award period. It helps to have a methodology in place based on the documented history of the labor required for each type of work. This also includes support tasks such as project management and quality assurance.
Instructions, Conditions, Notices to Offerors
If you’re given the contract award, this section explains what you need to do in your own bid proposal. This is one of the most important questions because it will give you instructions for your next steps. For instance, it will tell you what they want to see in the proposal as well as the proper formatting. It will also tell you how many copies they want you to submit.
Evaluation Factors for Reward
This section will detail all you need to know about how the solicitor or agency evaluates each section of your RFP response before they award you. You may notice that some sections will give you higher points than others. Pay particular attention to these sections and use language that reflects the RFP so that they’re aware you read their requirements.
What Are RFP Red Flags?
Now that you know what to expect when it comes to RFPs, it helps to know some red flags. Recognizing these red flags will save you a lot of time and effort in the long run so that you can move on to a more suitable RFP.
Some requests for proposals may be extremely confusing to read. They may have specific job requirements that may seem impossible to deliver under the deadlines they specify. Although this may simply be the case of an inexperienced agency or solicitor, you might be encountering a wired bid.
Requests for proposals are supposed to be impartial and unbiased so that every contractor has an equal shot of being awarded. However, some agencies will try to award a favored contractor by writing the bid so that it only makes sense to them. This wastes the time of contractors that don’t recognize it is a wired bid.
Here are some red flags to look for so you can take your time back:
- The majority of the RFP emphasizes experience with specific case study scenarios
- More questions than usual about references and biographies
- Higher than usual scoring in sections related to references and biographies
- Inflexible deadlines that don’t match the workload
- The same questions asked with different wording
- Brief or no responses to simple questions
As you read the bid, keep a lookout for these red flags and consider whether it’s worth your time and effort to respond.
Conducting the Bid Analysis
If you’ve read the bid and are confident that it isn’t wired and that you can meet the client’s expectations, then it’s time to take some time to analyze it so that you’re prepared to draft the perfect response. Here are a few questions you can ask yourself for each bid so that you can draft the correct response:
- What does the client need?
- What are their deadlines?
- What is the client’s budget?
- How long does the client need to decide who to award?
This helps draw more attention away from the money and more on what you can deliver. Even if a client has a high budget, it may not be a good fit for you if what they’re asking for exceeds your availability.
Responding to an RFP
When you’re ready to respond, make sure that you follow all their specifications when it comes to formatting. Don’t give them an excuse to throw your response out simply because you didn’t use the right font or supplied enough copies.
Keep your response concise and clear. Use language that mirrors the language that they used in their proposal to give them an indication that you read it carefully. Here are some elements that you should include:
Just like with a job application, a cover letter in response to an RFP is an effective way to differentiate yourself from other contractors. This gives them an idea of who you are and why you believe you’re qualified for the job. Make sure to write in terms of how your experience can benefit them.
This summarizes the RFP in concise language with your own points included. This is also where you’ll include your own research, interviews, and recommendations. At this point, it’s helpful to reiterate the client’s needs in a polite way to make sure you’re on the same page.
Deliverables and Strategy
This is the main portion of your response. You’ll detail all the deliverables and your strategy for accomplishing their delivery in the time allotted. You’ll always want to reiterate the benefits the client can enjoy over the length of the project time. It’s also important that you specify the deliverables you’re not able to include to eliminate scope creep.
This is the only area where you should write down the prices for each deliverable. It’s important that you provide concrete pricing recommendations so that there’s less work that the client has to do. Based on the sections above, they should feel confident that your pricing is fair and necessary for the scope of the work.
About Us and Agreement
The “about us” section is similar to your cover letter. It’s a reminder to the client of why you’re a good fit for the job and the benefits they can enjoy by choosing your company. The agreement section should be easy to locate, and it’s where the client will sign if they’re ready to award you with the project.
Placing the “about us” section right before the agreement helps clients jog their memory about your company, as they’re reviewing dozens of responses at a time.
Becoming a Bid Proposal Expert
Knowing how to conduct a proper bid analysis will save you time and money in the long term. You’ll be able to quickly identify the red flags of wired construction bids so that you know not to waste your time. Likewise, you can respond to proposals in a concise and experienced manner that highlights the benefits of working with your company versus others.
As you become more practiced, you can even create response templates that will speed up your response time. Are you ready to grow your company and reclaim more of your time through construction management software?
Talk with an expert today about your needs to get started!