It has happened to many of us. We spent many hours and day putting together a solid estimate but we can’t get awarded. After careful consideration and feedback from over 1,000 builders, these are the common issues we have determined could be affecting your proposal numbers. There are other items that you must also consider like: overhead percentage, mobilization, warranties, experience, fill-in every line on the bid form, contingencies and allowances. Remember the key to a successful bid is a mix of experience, performance and remember to follow the instruction to bidders.
Common errors on calculation and using the wrong scale will lead you to the most common error when placing a bid. Recommendation: Use bidding software or an electronic calculator with a recording tape. Remember always to double-check quantities and pricing.
- Improperly Pricing
Verify the quantities and supplies needed; check if the bid requires a lump sum or a unit price. Recommendation: Pay special attention when reading the instruction to bidders.
- Incorrect Allowances
Allowing too much or too little amount to perform a job might send a signal to the owner or the manager that something on your bid is wrong. Recommendation: Prepare a detailed proposal for the allowance and prepare a complete take-off for this job. Present the number as requested in the proposal, fixed price, unit price, lump sum, or per instructed.
- Incorrect Units
Check the schedule of values to verify if they are requiring the bid on a lineal feet, yards or meter unit. Recommendation: Double Check and prepare a separate list with the requested units
- Labor Rates
Labor rates vary widely from jurisdiction to jurisdiction. Some projects require you to comply with Davis-Bacon Act, local union salary rates, among others. Recommendations: Consult local business, laws and other reliable resources to get the correct rates and how to incorporate them to your bid. Special attention must be given to overtime rates.
- Unfamiliarity with Project Site
Huge mistake! Some contractors present bid by merely completing a take-off from construction drawings. Recommendation: Complete a Due Diligence assessment and verify that field conditions are represented on construction drawings.
- Underestimating Transportation Costs
That huge piece of steel or that unique material must be transported by train, plane, of overnight. Request a quotation for the delivery of the material and plan its delivery. Broker costs or special taxes might add up to unexpected quantities. Recommendation: Prepare a logistic plan of when and how the material will be transported. Remember to provide specific or realistic date and stick to that quotation as long as you can.
Every jurisdiction has a local or state code that must be followed. Sometimes these codes request for special equipment or additional pieces that were not part of the initial bid. Recommendation: Hire or consult a local expert that will help you on the assessment of the construction codes
Sometimes contractors tend to work in certain ways, but specific regulations might require bringing specialized contractors, even licensed contractors, to perform a job. When bidding be sure that every requirement is being met, and that the proposed workmanship is appropriate. Recommendation: Look for high specialized items under the contract and request a quotation from specialized contractors.
- Minor Items
Minor items tend to present major costs. Sometimes a bid proposal will not require presenting a bid number for waste disposal, or even scaffolding; but be aware that adding these little costs can lead to a massive portion of your bid total. Recommendation: Analyze and list all necessary equipment to perform a job, no matter how small that equipment can be or how short its usage will be.
- Overlapping Items
Different subcontractors can be bidding on the same item if their scope is not precise. Be sure to verify the extent of the quotation from your subcontractor’s and discuss its proposal. Recommendation: Prepare a scope of work and distribute it to your subcontractor’s. On a construction drawing mark the limits of each contractor and discuss with them what items they are including on their bid and what items they are leaving unattended.
Many bidders tend to use a rule of thumb quoting price for some items. Regularly, you tend to analyze your job on a per square price, as you used to, but variance in construction costs or specialties in the construction project might increase those ‘ballpark’ estimates. Recommendation: Use specific area details and a complete analysis of your construction project.
- Alternate Bid
Regularly bid request asks for an alternate bid number. Leaving this area without any information will disqualify you from the competition. Recommendation: Follow the strict guidelines and the instruction to bidders as closely as you can.
Bid answers and quotations are always prepared against the clock, but you must never forget to sign the bid bond or the bid proposal. Recommendation: Establish a checklist procedure before sending your bid proposal.
Bid proposal always requires to be delivered on a specific time frame. If you plan to answer a bid proposal organize your subs and your employees to finish the proposals with at least 24 hours before the specific deadline. Recommendation: Finishing before the due date will leave you enough time to review the proposal and to get sure that every instruction or detail is covered.