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The Definitive Guide to Construction Bidding

In an era where various industries are booming, construction services are more critical than ever.

In fact, the construction industry has set the standard among nearly all global sectors with an impressive 21.4% industry-wide revenue.

There are plenty of ways that construction work is developed.

Some are created in-house, meaning the construction company develops its own plan. After that, contracts are then created based on the needs of the project and the organization. In other cases, a project owner decides to hire contractors to complete the job. This is useful because of the access to highly skilled professionals, specialized tools, and experience.

In the second scenario, construction bidding takes place. In simple terms, construction bidding is where several different construction companies make their own bids in hopes that they are awarded the job.

Construction bidding can be very financially appealing in the modern global economy. However, the construction bidding process may be a little complicated for contractors who do not understand the structure or operation of bidding.

The good news is construction bidding has a definite start and endpoint. Once you understand how to get from point A to point B, you will be able to handle your first construction bid with ease.

Keep reading to discover everything you need to know about construction bidding.

How to Bid a Construction Job Successfully

There are several different types of construction contracts. These include government works that require proposals as well as long-term construction works. Regardless of the nature of the agreement, the construction bidding process is the same.

1. Researching and Planning

Before you begin bidding on construction jobs, it is time to think about what you can do. You want to focus your bids on jobs that are within the fields that you have a decent amount of expertise in. After all, why would somebody hire a company that has no experience with similar jobs?

You need to understand how the bidding process works.

Here is why.

A construction job will not just be handed to the first person that bids for it. Instead, it will go to the construction company that has the best, most talented, and organized workers. An excellent track record and satisfied customers are also beneficial.

Make it a point to consider your business plans. If a particular project is within your expertise, then it is time to start working on developing a strategy. Your plan should include any information that proves your company is the best for the job.

2. Prepare the Bid

When you are creating a business plan, it is essential to include the ways you plan to meet the job’s requests. You also need to take into consideration the cost of materials, labor, calculate overhead profit, and how long the job will take.

Though some companies might be willing to hand the job over to the lowest bidder, you should never underbid on a construction job. Otherwise, you might be spending more on materials and labor than you are bringing in at the end of the day.

Make sure that you have a construction bid template or a construction bid app that you review before making a bid. But, do not assume that the person reading your construction bid template will just skim over the details and only check the bottom lines.

Good construction firms place emphasis on the construction bid template rather than just the cost.

When a contractor submits an unusually low bid for a project, it usually sends up red flags. After all, any company willing to do a job for an excessively small amount is generally cutting corners and costs wherever possible.

Pro Tip: Even though a low bid might be attractive to a person looking to cut costs, it will not always guarantee you a job. Most companies would rather spend a little more money on a reputable company that is more than capable of completing the task. Make a reasonable bid.

Stay tuned, we will go over different construction bid templates later.

3. Submit your Bid

There are plenty of ways that you can submit your construction bids.

Governmental agencies usually have online portals where you can upload your bids to be reviewed. You must perform this task with care. The last thing you want is to make a last-minute mistake that causes you to lose all your work or even need to reach out to the stakeholder.

The same cannot be said for private-sector bidding.

Private sector construction bidding is not usually done online with the same construction bid sites. Digital delivery methods are now considered the norm, and most construction bid templates are delivered to cloud servers. This makes files much quicker to share and distribute.

However, check the submission requirements before submitting a bid. Some stakeholders might prefer a hard copy, and you want to make sure that you are delivering on their wishes.

4. Presentation

You have conducted your research and submitted your bid. Now what?

Once you have received an invitation to meet the stakeholders, your first hurdle is officially cleared. But you are not at the finish line just yet. First, you must impress the stakeholders and prove why you are a good fit for the job.

This usually occurs with a one-on-one presentation meeting. However, it is also becoming much more popular to present bids via videoconference. Either way, you need to make sure that you are ready to show your proposal.

The most essential thing in this step is preparing for questions you might be asked about your construction bid template. It would be a good idea to try to address the answers to these questions during your presentation before they are even asked.

Negotiation is not unusual during a presentation meeting. It is in your best interest to have counteroffers prepared or stand firm on your initial price. Though you want to come off as confident by holding firm, at least be open to hearing other prices.

But, consider this.

Your bid price might be a dealbreaker the way it is framed right now. But you need to consider quality, labor, and other essential factors of your bid. It might be time to adjust your plan if you are that interested in being awarded this job.

5. Awarding the Contracts

Once the bidding process is over, you must know when the final decision is being made. If you are awarded the contract, you will be sent the details about the specific project. At that point, it is time to get all your ducks in a row.

Be prepared!

There is a good chance that your stakeholders want the job to start as soon as possible. After all, about 25% of projects were completed within 10% of their original deadlines over the last few years. That means your contract owners expect you to be ready to start immediately. This is the best way to guarantee that the wishes and plans of stakeholders are met.

The better you handle the transition between the bidding process and starting the project, the higher the potential for a long-term relationship with your stakeholders. This can help to guarantee you more projects in the future.

Stick with us, we will be getting to the programs and tools that will help get you to this point very shortly.

Considerations to Make in Construction Bidding

Preparing your construction bid proposal involves understanding the project. Your plan should include all critical elements to give you the best chance of winning the bid.

As a bidder, it is essential to know that several different factors can influence the decision of a project owner. It also helps to understand how to bid for both small and large jobs.

Let us check out the features you need to consider when you are preparing your bid.

1. Delivery methods

Delivery methods are how the project transitions between the first idea and project completion. However, different delivery methods involve different contract types. Every method should describe how the contractors and the stakeholders will work together.

The actual delivery method will determine the cost of the contractor.

For example, the DBB method requires the stakeholder to find an architect that is separate from the building contractor. On the other hand, DB mode involves a contractor overseeing the entire project from start to finish

2. Procurement Method

The procurement methods explain the ways that the stakeholders will choose a bid. This is important for bidders to know, as it can impact how the project is estimated.

For example, the best value method involves the stakeholder compromising both the cost and the quality of service to select the right bidder. On the other hand, the lowest bidder method consists in choosing the contractor that submits the lowest bid.

Given this information, you can adapt your bid to improve your chances of winning.

3. Contract Types

Before you begin bidding on projects, you need to know what stakeholders have in mind regarding their preferred types of contracts. This will determine the payment method for a project, which is extremely important to you.

In cost-plus arrangements, contractors are paid a percentage of money that is agreed on. There are also lump-sum methods that provide contractors with the entire amount of money to complete the project.

Pro Tip: Consider the availability of finances that your company has access to. As much as you might want to win a bid, you cannot be successful on a project if you do not have the money to pay for tools, materials, or workers.

4. Project Costs

You need to keep track of possible expenses for a project to submit the most accurate bid. That means taking note of money spent through labor costs, tools, and materials. Keep in mind, 26% of construction workers say that they are frustrated by the lack of tools that can help to make a project easier to complete.

Then there are indirect costs, such as professional charge permits and service fees that you might be required to pay.

One more thing.

Only 31% of all projects came within 10% of their budget within the last 3 years. That means it is more important than ever that you do the math and keep your expenses under control. You can do this by analyzing the increase and decrease trends in recent months.

However, 43% of construction firms prioritize immediate financial goals over organizational resilience.

An Insight into Excellent Contract Bidding Proposals

You must iron out the details from the start to the completion. After all, construction projects must be accurate from the time you submit the proposal documents.

The structure of your proposal is crucial. It should be persuasive and effectively communicate the values your company offers. It is also essential to include your pricing, terms, and conditions of the bid. This makes it a lot easier to compare costs across projects.

By doing this, you can limit your expenses and prevent miscommunication. This is further guaranteed when proposals are reviewed by credible legal officers. This helps to make sure that your documents are sticking to the legal requirements.

So, what is the best way to come up with a compelling proposal?

Using templates!

Useful templates use the exact language given by the construction specification codes. You can also make a template using a ready free or premium model. This can save you a ton of time in the bidding process.

In fact, about 45% of construction contractors claim they spend more time than planned on such activities.

The Free Construction Bid Templates

1. Construction Bid Proposal Template

Are you searching for a completely customizable and ready-to-use template? Then this is what you are looking for. This specific model will provide you with the customary provision for the contract. You can also freely add or delete content at your leisure. There is no doubt that this template can help you win your next construction bid.

2. Construction Bid Project Proposal Template

Sometimes, a more professional structure is the best approach. This template takes advantage of the minimalist proposal, perfect for all your needs. It can cut down on time it takes to bid on projects and even give you access to several different formats. Choose one that works best for your company or the specific project.

3. Construction Business Bid Proposal Template

These templates have clear information, and you can edit them as you please. You can add details, terms, and clauses depending on the job you are bidding on. You can adjust the headings and content based on current trends and data.

4. Construction Project Bid Budget Template

There is a lot of paperwork that goes into estimating budget bids. This template might just come to the rescue if you find yourself in that position. These forms have a crisp design that is easy to edit with your own approximations. You also have access to both Word and Excel formatting.

5. Construction Bid Agreement Template

There is always the chance of misunderstandings when it comes to legal terms. In fact, 14 months is the global average length of construction disputes. The agreement template can be your savior. You can specify your own terms or conditions and customize your personal legal documents. That way, you will not find yourself to be a part of the $42.8 million global average value of construction disputes.

Surprising Info about Construction Bid Software

Not surprisingly, nearly every step of construction is done digitally. That is where computer-designed software comes into play. It can be used to simplify the bidding process and reduce room for error.

Non-optimal activities cost the U.S. construction industry over $177 billion in labor costs in 2018 alone. That is exactly why technology is so vital in the construction industry.

To get accurate ideas about the costs of construction projects, you need to create detailed schedules, cost estimates, and construction plans.

Unfortunately, relying on back-up budgets is not always the best choice. Your best bet is to depend on construction bid software to help figure out possible expenses and develop accurate estimates.

Once you win a construction bid, you can feel confident that your calculations were correct. This is the best way to secure the margins you predicted.

There are plenty of options when it comes to construction bidding software. That makes it much easier to submit a competitive bid and increase your chances of winning. What is even better is that this software can handle small-business to enterprise-level needs.

Some construction bid software can help to get the exact estimates for a specific job. Here is some of the best software that you will want to consider.

But, what about construction bidding sites to find the jobs? We are almost there!

1. Sage

Sage is the perfect solution regardless of your company’s size. It is an incredibly flexible software that highlights accurate estimation processes. You can use this software to build faster and more accurate bids to help secure that construction job. One of the best features is the already-equipped charge database. This can help you to save time, boost profits, and handle risk appropriately.

2. Causeway

Causeway is a great software designed to reduce the cost of traditional contracts. In fact, the expenses are cut by approximately 50%. Aside from having such a large client base of over 5,000 contractors, this software also allows you to compare price quotes of bids and determine the best bid to win.

3. Viewpoint

Viewpoint is the ideal software for small or medium-sized contractors. This software is incredibly effective at reducing the stress and costs of typically bid planning. You can use this software to identify potential extra fees and account for them in your final bid.

4. HCSS HeavyBid

HCSS HeavyBid is an excellent choice for just about any company in the construction industry. You can use this software to create flexible estimates and manage your bids with less time and effort. What is unique is that this software will keep track of your calculations and let you know if there are any miscalculations to correct.

5. B2W

B2W is decent software for estimating costs as well as designing a construction bid template, making it ideal for large construction contractors. You can use this software to estimate the costs of labor and materials. What is excellent is that B2W integrates with both Excel and other systems like Oracle. Typically, B2W users are focused on highway utilities, paving, and earthwork construction jobs.

The Best Construction Bid Sites

There are tons of websites out there that list construction opportunities. You can find these sites through search engines or even by reaching out to the local contractor’s associations. However, only about 11% of contractors find these job sites to be useful.

Listed below are some of the free resources of construction bidding:

  1. Bid Express: The site is meant to be used by bidders and posts bidding opportunities related to construction.
  2. Building Construction Bid Network: The construction bidding forum posts new jobs daily and globally. However, this site is most useful for those in Canada and in the U.S. Since this website posts contact information, you can reach out directly to those hosting projects.
  3. Construction Bid Source: The construction bid site hosts construction bids in Florida, Washington, California, Utah, Nevada, Oregon, Texas, Arizona, and Montana. On this site, you can view necessary details on construction jobs, and you can even win a chance at a free membership. However, it might be more beneficial to pay for a membership.
  4. Development Businesses: This site prints international opportunities involving the United Nations or its partners like the World Bank. The database of the site allows you to filter through geographic areas and project types to find jobs that are fit for you.
  5. eBid eXchange: This portal operates a procurement platform for agencies. Some of the stakeholders on the site include Seattle’s construction, Cornell University, Virginia, California, and Henrico County.
  6. North America Procurement Council Hub: This resource links bid sites in various states. Through the site, you could access more than 280,000 construction projects for bids.
  7. Walsh Construction: This site is based in Chicago, but you can bid from anywhere in the U.S. or in Canada.

Bottom Line

Construction bidding is not the most straightforward task, that is for sure. However, having the right skills and knowledge can undoubtedly help you to secure the construction jobs you are looking for.

Make it a point to use the right estimate tools and bid apps to create accurate proposals. If you are following the guidelines we reviewed above, you should be able to get those construction jobs that you have been waiting for.

If you have any comments or questions about construction management software, feel free to reach out! We are always looking to help our readers succeed in their careers.