According to the Construction Management Association of America, commercial construction estimators are having a really fruitful construction bidding year if they’re winning 1 out of every 10 construction bids.
The problem is that in our current construction landscape, it’s far more common for an estimator to win 1 job out of every 25-35 bids than it is for them to hit the magical bid ratio split.
Now, there are some deciding factors that are out of an estimator’s control, like a project manager’s personal preference; however, when it comes to the estimate itself and bidding better, construction estimators reign supreme, and that’s where they should focus a lot of their energy.
A strong estimate that’s accurate and detailed will stand out against submissions that offer flimsy material counts and patchy timelines.
But there are also a variety of other considerations that, when applied, really separate the decent proposals from the strongest options.
In this article, we’ll detail exactly what makes a winning estimate and offer ways to elevate reasonable bids to bonafide winners.
Key Takeaways For Improving Your Construction Bids
- Construction businesses can strengthen bid packages with client testimonials, track records of quality projects, and the proven ability of the project team to handle diverse types of projects and project risks.
- Experienced contractors improve construction bid proposals by using bid management software for correct measurements, project specifications, cost estimating, and project details while maintaining competitive prices and managing overhead costs.
- Construction firms should demonstrate financial stability, highlight project outcomes, and showcase their balance between bidding opportunities to attract potential clients and secure future construction bids.
- Qualified contractors need detailed project plans with clear project timelines, showing their construction process expertise through successful past project outcomes and efficient bid management strategies.
- Competitive bidding process success depends on comprehensive bid proposals that address potential risks, include detailed project specifications, and demonstrate the ability to complete each job on time.
- The EDGE® can help you improve your project bid-hit ratio so you can maximize your profit margins and grow your construction business.
Add Testimonials to Strengthen Your Construction Bid
More often than not, a project owner will request references, but they aren’t typically mandated.
Regardless, it’s best practice to provide some type of testimonial from professionals who can speak towards the quality of your work and the efficiency of your team.
Whether it’s a signed-off written piece from a client who had a great experience with your construction company or the contact information of a different owner who can attest to your legitimacy as a productive business, people trust people, and a positive reputation can be a separator.
Build Your Construction Resume
This one will be a little more difficult for newer construction businesses, but if you have the resume to show you do good work on time and budget, then let that shine.
A few specific types of jobs a project owner will look for include:
- Previous projects that are identical (or nearly) to the current proposed project
- Similar jobs that were larger in scope
- A list of projects completed at the same time
By presenting these previous successes, you’re demonstrating that you can handle big workloads, are comfortable with multi-tasking, and are well-versed in the type of work the owner is requesting.
Risk Management in Construction Bidding
As the classic adage goes, failing to plan is planning to fail. And it very much rings true in commercial construction.
Sure, you can be confident in your measurements, your counts and your lists. However, if you don’t consider outside factors that can affect your project scope, then you’re not only risking the budget and the schedule, but you’re also showing the project owner an aversion to preparedness.
There should always be some unassigned portion of the bid that’s relegated to the emergency fund. Some considerable contingencies include:
- Geographical weather (i.e. hurricane season, earthquake risks etc.)
- Fluctuating supplier markets
- Labor shortages or union strikes
- Illnesses and injuries
You can’t prevent some of these things from happening, but if you map out procedures in the bid, you’re letting the owner know that you’re ready for whatever unexpected circumstances arise.
Setting Strategic Construction Timeline Goals
Unless the type of project calls for something super flexible, be firm and confident in the timeline you spec out.
Project owners are not looking for a job that could go months past their goals, at least not upfront. There is a recognition that delays may occur, but to start off guaranteeing delays is not a strong showing.
And as you finish projects within appropriate schedules, keep those at the top of your resume so future prospects can see just how effective you are at getting the job done for a previous client.
Keep Jobsites Safe
In this industry filled with workers’ compensation payments and OSHA requirements, safety has become as essential to a successful project as detailed job costing.
Construction project owners are looking for construction companies that boast low TRIR scores and, if possible, even lower incident reports.
Being able to produce an audit trail of favorable jobsite inspections, up to date certifications and detailed safety plans is key if estimators are trying to establish differentiators.
Always Communicate With Project Stakeholders
Accessibility is a necessity. Project owners need to know they can easily make contact whenever it’s required. They also expect construction businesses to be open and honest in their reporting of milestones or delays.
Start the entire construction bidding process correctly. Ask questions, be helpful, respond in a professional manner at appropriate intervals. And ensure there is a single source of truth for the owner to turn to. Whether it’s one big email chain or a shared dashboard in a project management tool, keep everyone in one conversation.
Too many silos can lead to lots of misinformation.
Show Financial Health in Your Construction Proposal
Consider this your collateral. Whether it’s a positive cash flow statement, a healthy balance sheet, a high credit rating or a solid backlog, construction owners are looking for companies that are steady and reliable.
They need to know that if project costs go over budget, the contracted business can cover these overruns. They’re looking for crews that are paid on time and not on the verge of striking because of missed paychecks.
Above all, they want to know that you’re good with money. You know how to keep your own margins protected and, therefore, can keep within the limits of the project you’re completing.
Use Construction Takeoff and Estimating Software
One of the more obvious ways to create competitive bids is to make sure they’re accurate.
And by using technology like construction estimating software, not only are you producing estimates faster, but you’re also taking away common manual errors like double entry and miscalculation.
Construction estimating software handles both the quantitative and qualitative aspects of construction bidding for you.
The estimating solution will measure the blueprints and determine all the required counts. Then, as the material lists are built, the estimating solution will offer different supplier pricing for each type of resource.
Once you choose the preferred vendors, the prices are applied, and the overall bid amount is set automatically — without any by-hand math necessary.
Because everything is precisely measured down to the last inch, the risk of over or under estimation is greatly reduced.
As well, estimating software streamlines the estimating process and lets you generate more estimates. Your new bids are better detailed; you’re producing them at a quicker rate, so jobs that pop up as you’re building a different proposal can still be considered.
Create Winning Bids With The EDGE®
Details are money. If you want to improve your bidding ratio, you need to adjust how you approach your proposals.
Include information that will really showcase:
- Your ability to plan and manage
- Your skills at budgeting
- Your priority of safety
- Your past successes
Collectively, these documents boost your reputation, defend your submitted estimate, and establish a successful construction bid.
To ensure your numbers are accurate, implement construction estimating and takeoff software, like The EDGE.
The EDGE is built for the roofing, exterior finishing and interior finishing trades and offers trade-specific databases for all their users.
With direct supplier pricing and common conditions, The EDGE is fast and efficient, so you can bid and win as many jobs as desired.
For more information on how to improve your construction bidding, chat with a specialist.
