Key Strategies For A Successful And Competitive Bid Analysis
Conducting a thorough and accurate bid analysis is essential if you want to maximize your wins and land projects that are profitable for your business.
Estimating the labor, duration, and cost of carrying out a project can be challenging. Particularly when you’re feeling extra pressure to be competitive in today’s overcrowded market.
Lots of construction companies fall into the trap of using the same bidding strategies repeatedly. They do so under the premise that all wins are equal.
This strategy has major drawbacks. Namely that a one size fits all approach diminishes your chances of winning. It also means that even if you do win the bid, you’re likely to have undersold your services to get across the finish line.
You need to bid for the right tenders at the right price and that means having bidding strategies that get results. Keep reading to discover six strategies guaranteed to boost your closing rate.
Develop Your Data
There are many great bidding strategies, but all are dependent on the data that underpins them. Construction companies forget this all too often and spend hours constructing a bid without accurate data to back it up. They simply use a standard bid number or rinse and repeat past winning bids.
By organizing and recording true cost data, you’ll be able to buck this trend and submit bids that are not only cost-effective for the client (making you more likely to win) but that also maximizes your return.
It’s time to say farewell to projects that lose money. Accurate data will reveal what works and what doesn’t so that you can invest your energy into high potential projects.
Know Job Costs
When winning bids take shape and turn into live projects, the financials submitted during the bidding stage are often reworked by a project manager. If there’s a significant change between your bid and the amount the project manager believes to be workable, red flags will start flashing before you’ve even started.
If you want to bid competitively you need to be accurate. In order to be accurate, you need to know the job costs and timing in detail.
Understanding the implications each has on the project enables you to provide more accurate estimates, which will keep your wallet and your project managers happier farther down the line.
Use Estimating Software
A great tip is to use estimating software to help come up with cost estimates for a potential project. Many construction firms in the United States still use spreadsheets because they’re familiar, but this strategy is not effective or efficient in the long run.
Spreadsheets can be overly complicated and riddled with hidden errors that lead to mistakes in RFQ responses down the line. You wouldn’t want to win a tender only to discover that you miscalculated a cost and are coming in below your profit margins.
Estimating software like Sage Estimating will help you calculate your costs and it’s more precise than the spreadsheet approach. It can provide a clear cost estimate for your project managers to use as a starting point and from there, you can update and amend as necessary.
Don’t Bid On Everything
It’s tempting to bid on every job you come across, thinking that it will increase your chances of winning. However, this bidding strategy will not get you far, as clients will soon realize that your bids aren’t tailored to their requirements and they’ll look elsewhere.
After reviewing your existing data to identify which jobs are most profitable for you, focus on applying for similar opportunities, and make it your niche. For example, you’ll want to exclude opportunities that are:
- Too far away
- Outside of your niche
- Asking for timings that are unachievable for your team
- Unclear on outcomes
- Low profit
Focus on tenders that match your ‘ideal’ project profile. Fewer, higher worth, well-executed projects are worth more to your business and its future than a series of poorly executed projects that leave you overstretched.
Use a Bid Day Analysis Tool
When you’re calculating your bids, one thing you cannot forget is your subcontractors. Subcontractors are required in nearly every construction project and the last thing you want to do is under or overestimate their costs at your own expense.
Using a bid day analysis tool like BidMatrix, you can drop the guesswork from your bid analysis and break down subcontractor and vendor bids in your bid estimates.
With this tool, you can see who’s most competitive and analyze thousands of paths instantly to find the best solution for you and your client.
The best bid day analysis tools will integrate with your estimating platform so that you can quickly and effectively pull together construction bid packages. You’ll also get access to group collaboration features that enable estimators to work on a bid together, a must-have in the age of remote working.
Build an End-to-End Software Solution
One thing that’s guaranteed is the impact that software will have on your bids. Another strategy is to aim for building an end-to-end solution that covers all essential processes.
This should include estimating, analyses, invitation platforms, as well as accountancy, planning, and project management tools.
By doing so, you’ll have a complete record of every move you make, which can help with your data collection and audit trail down the line.
Ready to Put These Bidding Strategies Into Action?
Perfecting your construction bids is an art form. It’s challenging, complicated, and requires a lot of time. However, the right bidding strategies combined with the best technology can streamline your bidding process and take the headaches out of your tenders.
For 35 years, Bangert Inc has been providing cutting edge, proven solutions to the construction industry. Our construction bid analysis software helps you close more deals and remain competitive. Get in touch with one of our experts to see how it could transform your bid processes today!