By Lonnie Fritz, Market Professional, Construction Industries, Caterpillar Inc.
“You can’t win ’em all.” That phrase applies to many things in life and business – and most certainly to construction bids. But if you’re not winning enough, it may be time to take another look at your process.
Are you making mistakes that are causing your bids to be rejected and your company to miss out on good, profitable jobs?
Here are five common (and easy-to-avoid) errors we see construction firms make:
1. Responding to every RFP. Wayne Gretzky once said, “You miss 100% of the shots you don’t take.” That’s a great philosophy for hockey – not so much for construction bidding. A scattershot approach wastes time and energy, and you risk winning work you can’t do well or profitably. Instead of bidding on every job that comes along, focus your efforts just on those that are a good fit for your business.
When deciding to bid, consider other questions/factors such as:
- Is there sufficient time to prepare the bid?
- Is there enough surety bonding to bid this job?
- If awarded, would near future projects be compromised?
- Is this project consistent with the business plan?
- Are there enough qualified personnel to prepare the bid?
- Is the likelihood of winning the bid worth the investment?
- How does the competition compare?
- What relationship is present with the project owner?
- What is the public view of the project?
2. Overlooking the fine print. The devil is in the details. Don’t let something simple like forgetting to submit all the required documents, missing a mandatory pre-bid meeting or failing to sign on the dotted line lead to your bid landing in the reject pile. Always have someone double-check the quantities provided, your work, your math and your spelling.
And definitely don’t miss the bid deadline!
3. Overestimating your capabilities. Winning the work, then figuring out how to complete it, is risky.
Did you factor in the costs of buying, renting or repairing equipment needed for the job into your bid? Can you get new machines on site in time? Before submitting a bid, honestly evaluate your equipment needs. If necessary, get on your dealer’s schedule for delivery or maintenance so you can avoid costly delays.
- What equipment/labor is available during the proposed construction time frame?
- Are adequate subcontractors and suppliers available? Will costs vary?
- Are you utilizing accurate historical field data to apply to the estimate?
4. Staying silent. Are you clear on everything that’s required for the job? Do you have all the information you need to prepare an accurate bid? Don’t assume that you know the answers or that you can get clarification once you’ve won the work. Ask questions, attend pre-bid meetings, participate in site visits and reach out to your contact directly to confirm any project details that are in question.
- Do you have the most current bid specifications, plans and addenda?
5. Rushing a bid. It’s easy to make mistakes when you throw together a last-minute quote. You may miss certain requirements, set your price too low, overlook risks or make errors that cause your bid to be rejected outright. Always take the time to prepare a bid you feel confident in – otherwise, you might be better off passing on this opportunity and dedicating yourself to the next one.
Will avoiding these five mistakes guarantee a 100% success rate for your bids? Of course not – but it will put you in the best position to win every time.
Need some help finding projects to bid on? Check out these five online tools.