Most construction companies get their work by bidding on projects. As a result, building contractors often receive training in construction skills. Although, they learn more from work experience on how to develop a winning construction bid.
Although when you’re first learning how to bid on construction jobs, you often make simple mistakes that can cost you. If you want to win every construction bid, you’re going to have to learn some essential tricks.
Below you discover the three critical things you need to know about construction bidding.
1 Understand the Construction Bidding Process
The construction bidding process involves presenting a proposal to a potential customer for the construction or management of a structure. Subcontractors also use it to pitch their services to general contractors.
Creating successful construction bids requires following the golden rules. First, prepare highly accurate estimates of costs, then submit the lowest proposal among all the competitors. Secondly, examining the construction plans and performing material quantity takeoffs are necessary steps in forming a bid.
2 Know the Difference Between a Bid and an Estimate
Contrary to what some people believe, a bid is not the same as an estimate. These terms have somewhat ambiguous definitions. A contractor’s estimate is calculated internally, while a bid is a final price charged to the customer.
Typically, a bid represents a solid offer to the customer. The difference between your bid and your expenses represents your profit. On the other hand, an estimate may be all the customer wants after reviewing just a small job, and the customer will treat it as a formal bid after reviewing only the estimate.
3 Always Attend the Pre-bid Meetings and Visit the Site
If you receive a project, you can avoid problems if you understand the existing site conditions. It is possible that the site would have special conditions, such as limited accessibility or a location with additional costs.
If you fail to visit the site, you will not be aware that these conditions exist. Also, additional costs must be factored into your bid that would negatively affect your profitability.
It is common for pre-bid meetings to be held on-site or site visits to occur directly after a pre-bid meeting. During pre-bid meetings, project team members discuss plans, site conditions, and specific project details.
The biggest disadvantage of not attending a pre-bid meeting is that you don’t get clarification on the project’s requirements. Therefore, it is vital to have as much information as possible when preparing a bid proposal because if you do not attend, you might lose out on the chance to bid on the project.
It’s Not Simple to Make Winning Construction Bids
The process of preparing a construction bid proposal is not an easy one. It takes a lot of time and attention to prepare a winning bid proposal.
If you make mistakes, you may submit uncompetitive and underpriced bids that you win and don’t profit from. For your company to win more bids, you have to accurately estimate the costs of completing the job while still making a decent profit.