The following is a guest post by construction industry blogger James White.
In the world of competitive bidding, picture a person or review panel trying to pick one winner from a pile of bids. Your top priority is to not give them reason to reject yours. They will be looking for inaccurate or unrealistic numbers, late arrivals, missing information and incorrect formatting or templates.
Let experience guide you to the strategies and actions that can help you operate more efficiently, produce quality work and save time as you make money.
Tips for a Better Bid
- Track expenses for a more accurate estimate of overhead costs (include everything from stamps and Internet service to steel-toed boots and vehicle fuel)
- Build in a contract contingency fund to cover unforeseen circumstances ranging from 5-15% of the contract value
- Attend pre-bid meetings, where owners provide important project and proposal information
- Attend post-bid or bid-opening meetings to learn what you can about that client and the winning bid
- Don’t skip meetings or sessions that are pertinent to past, present or future work
- Review, research and practice for any interviews to which you are invited
- If you don’t win the bid, request to see the winning one or just ask about it
The government and many private entities will winnow the pile down to a few finalists who are interviewed and then ranked again to select a winner. Depending on the relationship and the client, you may learn about the win from an email, phone call, public announcement, Web posting or even an old-fashioned letter.
Bid processes vary according to the dollar amount of the project. Most entities have a threshold amount that triggers competitive bidding, and in many cases the lowest bidder gets the work. Some low-value contracts will have a simple or noncompetitive process. Owners with high-value contracts usually apply the federal government’s FAR standard, which allows them to use other evaluation criteria in addition to price.
Cover Your Assets and Credentials
Most construction jobs that exceed $100,000 must have performance and payment bonds, and contractors are obligated to have liability insurance. Both things protect you and your clients.
The surety bond is an agreement between you and a surety company guaranteeing your client that the project will be completed. The cost of premiums will depend on a range of factors such as your credit rating, financial soundness, experience and cash on hand. Within the surety family are also bid, payment, performance and ancillary bonds.
Contractors’ general-liability insurance is usually required and always recommended. Some construction companies opt to add a business-owner’s policy, worker’s compensation, commercial-vehicle insurance and others. Insurance brokers are industry professionals who work with multiple providers and may be able to dig up the best rates through a combination of policies.
General and specialized contractors demonstrate and qualify their expertise with licenses and certifications. Some involve an exam and others the completion of educational courses. The requirements for construction-contractor licensing vary from place to place, but it is usually the state entity that issues licenses for the various construction trades.
Certifications and other credentials can be earned through a number of organizations:
- National Center for Construction Education and Research
- National Institute for Certifications in Engineering Technologies
- American Institute of Constructors
- Multiple Associated Schools of Construction
- S. Green Building Council
- Construction Specifications Institute
- Associated Builders and Contractors
- Construction Management Association of America
James White is an experienced home improvement blogger and construction worker. His writing has appeared in many publications, including True Look, Constructonomics and The Blok. James is involved in promoting the ideas of sustainable building and construction safety. And, when he’s not saving the planet through his blogging, James revels in exploring the latest developments in construction and manufacturing industries, its history, its advancements, and where we will be tomorrow.