How to Bid a Construction Job

To conduct a lucrative bidding process for your construction jobs, you must be aware of all the current market scenarios. A balanced construction bid that is not too pricey or not too low is favorable. For this, you must know all the market prices, market conditions, material costs, labor charges, and all other internal project costs associated with your construction projects.

As per the saying of the engineering and construction expert, “Juan Rodriguez”, the chances of winning a construction bid rise when you have the lowest yet most competitive bid among all. While in some cases, factors other than cost play an essential role.

So, it is significant to create a rationale for construction bids that are not feast or famine. Let’s get into detail and learn more about how to bid a construction job and the critical information that you need to know for your upcoming construction projects.

What is Construction Bidding?

Construction bidding is the process of providing a proposal to prospects about how you will structure and manage their construction project. It is also a detailed presentation of how the general contractor will procure construction services offered by the subcontractors. Client gets a detailed overview of how their construction projects will get the shape and how much it will cost them. Construction bidding for some projects roams around the key element, which is cost, while for other construction projects, qualification and expertise also matter. The accuracy and efficiency of the construction bidding process can be greatly improved with the use of a construction takeoff software.

For effective construction management, submitting successful construction bids is highly essential. So below are some points which are needed to be taken into consideration:

1. Accurate cost analysis

Accuracy while estimating a cost for any construction bidding process is important. This is because it provides a detailed breakdown of individual costs associated with construction projects. A client gets satisfaction after knowing “WHY” for each cost incurred which ultimately strengthens your business relationship with them as they start trusting your expertise. So, estimating cost accuracy is a must while framing any construction bids.

2. Study the construction plan

Studying the client’s construction plan is very much important for any construction bidding process. Despite being a challenging task, it helps you know which construction costs are associated with the projects, whether you have enough resources to achieve the desired results, and whether the goals are achievable or not. After effectively analyzing the construction plan, you get an idea of how to create the winning construction bid.

3. Undergo quantity takeoffs

Construction bids can successfully grab the projects only after every aspect of it is precisely taken care of. Quantity take-offs are one of them. Measuring how much quantity of material and labor will be needed to carry out the project is the primary requirement. The construction contractors can review various drawings, models, and specifications for determining the quantity of material and labor. Also, the price of these quantities is simultaneously reviewed to construction estimate of the same further.

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Basic Construction Bid Lifecycle

After carrying out all the above-mentioned three essential steps for preparing the construction bids, the construction manager is all set to jump on to the next phase, which is the basic construction tender process.

The basic construction bid lifecycle involves the following activities which the client and the construction companies follow:

1. Bid solicitation

The client forwards the construction details to the general contractors with the relevant plans and drawings of the construction projects.

2. Reviewing the project’s scope

The construction companies then review the project scope, visit the construction site for deep analysis and take bids from subcontractors regarding the pieces of work.

3. Bid submission

On reaching the deadline, the contractors submit the bids.

4. Bid selection

After receiving all the qualifying bids, the client rationally reviews them and chooses the one that is leading among all. They consider all the factors discussed above, such as costs, qualifications, and expertise. Most of the time, the decision to choose the winning bid comes down to cost.

5. Formation of contract

At this point, the client and construction manager join and coordinate all the legal formalities, paperwork, terms, and conditions regarding the project.

6. Project delivery

This is the phase where the general contractors hit the roads. They are all set to start working on the project with adequate resources.

Essential Elements That Shape the Construction Projects

These are the three critical elements that mold construction projects to earn a reasonable profit. The owners and the bidders can simultaneously get aware of the project risk associated, the cost involved, and the responsibilities to perform. Let’s know about each of them in detail:

1. Project delivery method

A project delivery method is a comprehensive approach taken by the project owners. It includes various phases, such as planning, designing, and construction. Project owners use these methods whose ultimate purpose is to build the construction project within the time determined and budget prepared. Have a quick look at the various project delivery methods:

• Design-bid-build method

  In any construction industry, designers, contractors, and project owners are the three core parties involved who are the pillars of any construction delivery method.

  In the design-bid-build method, the project owners first hire a team of professional designers. Their task is to design various construction plans and draw specifications and models as per the owner’s requirements. Once designs are ready, general contractors are called upon.

  They review the plan and submit the construction bids accordingly. After which, the owners choose the winning bid and allot the responsibilities to the qualifying contractor for starting the work.

• Design-build

  Design-build is an extended version of design-bid-build. Here the owner contacts the designers, architects, or engineers who work in a joint venture with the construction companies. So whatever the project intent, owners graphs that one specified single goal is to be accomplished by designers and the contractors.

• Integrated project delivery

  The integrated project delivery method is a holistic approach toward construction jobs. It focuses mainly on the improvisation of the construction processes with minimum cost and maximum value by considering the theory of lean construction. The main goal here is to distribute liability, risks, and responsibilities by focusing on achieving the project’s goals.

• Construction management at risk

  

  Here, the construction manager joins the design team before the plan commences. They mutually work, and the construction manager lends his valuable input making the design more effective. The construction manager at risk also gets involved in the pre-construction phase and is responsible for delivering the service at an agreed price.

2. Procurement

Once the project delivery method has been opted for; the next phase is to decide which and from where procurement services are to be availed. The best procurement method that has the lowest bid is effectively negotiated, and the sole-source procurement needs to be selected.

In the lowest bid procurement method, the project owner receives several bids from the construction companies. Construction bids are compared, and then the one offering the lowest bid is selected. Most of the time, the cost is the key consideration, but there are certain projects in which technical aspects are also to be taken care of.

In the negotiated procurement, the client chooses the qualifying contractors without undergoing the process of collecting bids. The contractors are then negotiated as per the technical requirements of the construction project and the contractors’ pricing. The one offering favorable offers to the client is selected.

In the sole source procurement method, the services are obtained from a single provider throughout the project. Though it opted in the construction process, it is availed to handle the complexities and uniqueness involved.

3. Contract

The type of contract chosen while undergoing a construction project impacts the budget and can level up your profit margins. Lumpsum contracts, unit price contracts, cost plus fee contracts, and guaranteed maximum price contracts are some types of contracts that the owner chooses.

Consider Bidding on Government Websites

The federal government is continuously engaged in stimulating the economy, and bidding is one of them. They are setting a goal of awarding at least 23% of construction contracts to small ventures. Small businesses looking for bidding opportunities can knock on the doors of government. Government job is a shield when the economy is dragging, and there is a constant fear of losing jobs in the market.

To qualify for the contracts offered by the federal government, you should meet specific requirements. These requirements may seem complicated at times, but the tips offered by the government make them easy to achieve. The only thing you need to consider is you allocate appropriate time while undergoing the government bidding. This is because the bidding process is more highly regulated than non-government jobs. Plenty of paperwork gets involved, which takes more than usual time to get approved.

Now you must be thinking, where are those resources from where you can apply for bidding on government projects? Well, the answer is pretty simple:

• You can visit sam.gov, a free resource created by the federal government, to find and apply for active contract opportunities.
• Another website that can be visited by contractors seeking bidding opportunities is American Business Network. It is a portal portioned by North American Procurement Council. Government agencies put all manner of bids, RFQs, and RFPs over there. Though it doesn’t function as smoothly as SAM, it privileges you by state, date, or project details.
• Other than this, various other government sites such as USA.gov, GSA, BidNet, and Fed Biz Ops are available.

Consider Bidding on Non-Government Websites

It is obvious that government contract opportunities are secured for bidding, but that doesn’t mean non-government opportunities are less significant. Few contractors wish to not get trapped in the time-consuming and daunting government procedures with ample competing contractors targeting the same construction project. Instead, they want to approach the non-government bidding sites, utilize their network, want to build their identity, and then win a bid.

Tips on How to Bid a Construction Job

The construction business feels a thin line of difference between winning a bid and losing one. Your one mistake and your bid get ruined. There are several competing contractors in the market standing with the best proposals in hand. So, it is very much important to design a bid that stands out among all. Below are some tips that will help create an effective bid for your coming project.

• Choose the one that suits you

  It is not required that you bid on every job that comes before your eyes. You should go for those where you can perform up to the mark. Winning the jobs and then not performing as per your and your client’s expectations can negatively impact your business.

• Attend pre-bid meetings and have a visit to the site

  Attend the pre-bid meetings to get more clarity on how to go forward with the potential projects. Visit the site for a better understanding of the problems and find solutions on a prior basis before you win a construction bid.

• Take proper clarity

  Get proper clarifications from the client regarding the construction projects. If anything seems unclear, make sure you have the clarity and then move ahead. Relying on assumptions and not having clarity will be a waste of time, energy, and other resources.

• Evaluate subcontractors

  Make sure that the subcontractors you hire meet your budget and all the other technical requirements you have.

• Organize the bid forms and required documents

  You are not only required to be technically sound but theoretically as well. All the bid forms and relevant bid documents are to be organized and kept ready otherwise, the bid will get rejected.

Conclusion

Now that you have constructed an effective base on how to bid a construction job by reading this blog, you will rest assured while planning your next bidding for construction jobs. By precisely acknowledging all the above-mentioned factors, you can surely frame competitive bids that no other contractors can.

InvoiceOwl is the best online software that you can opt for easily creating estimates and sending quick bids to your respective clients in just a few clicks. Sign up and start your free trial today for clutching the amazing contract opportunities.