Every construction opportunity can seem perfect upon first glance to a GC looking to fill up a bid roster. If a project is taken on and hours are invested without proper vetting, you’re looking at a significant misuse of valuable resources when a bid is not awarded. What are some comprehensive points to address prior to committing to a seemingly perfect bid? Look no further.
Depending on your capabilities, you’ll have different levels of comfort with each of these considerations. Regardless of exact quantities, you’ll want to give each some thought to save you time and energy in the long run.
(1) Number/Prerequisites of bidders
Each GC is different, but a reasonable level of bidders is a good indicator of how probable it may be for you to be awarded a project. In public projects, you’re most likely looking at a heavy group of bidders. Regardless of bid pool, if you feel as though you’re in a position to stand apart then go for it. However, if your faced with the need to be more strategic and cautious with your time, this is a key area to identify before completing any work.
No matter how alluring the statement of work, some call-outs you’ll want to watch for are:
– Other bidders who have completed 10+ previous projects for the owner: in this circumstance, your bid may be used a formality to mock a consideration of all, when really, the top dog has been chosen covertly.
– Bidders lacking foreseeable overhead relative to your own firm: if you are able to identify a bidder and do research without evidence of an office building, website, extensive staff, it’s probable that the time investment won’t be worthwhile if you already have higher cost implications shaping your bid.
– Competition with a reputation for unfair practices: Arthur O’Leary of Design Cost Data states, “There is the perception, real or imagined, that some competing firms figure their jobs too close, do not allow for a proper profit and overhead mark-up, or do not provide appropriate contingency allowances. Some firms have the reputation among other contractors of bid shopping their subcontracts or other improprieties and sharp practices that would impair fair bidding competition. Inclusion of such contracting firms on a bid list can sometimes motivate reliable firms to decline the bidding invitation.”
Of course every GC will have a set of states for which they are licensed to do work, however even within the same state, there are projects that can span hours of travel that may not be a smart idea to take on. There may not be subcontractors or connections willing to extend themselves into a distant area, and to pursue subs that aren’t known is an undeniable risk. Given that, it’s good to give additional thought to travel and lodging requirements to understand what is feasible. Ultimately, if you don’t stand a good chance of offering something competitive in a far area, it’s not offering anyone benefit. Many project owners will respect an opt-out over an unsuccessful attempt and over-budget project.
(3) Capability Potential
The Capterra Construction Management blog points out the reality that, “Nothing is more embarrassing than bidding on a project that you can’t afford and then having to turn it down after. It tarnishes your reputation and does nothing for morale.” This boils down to one important truth: take on what you can handle. Growth can be accomplished in baby steps, but to overwhelm your office and field team with something beyond their capabilities will likely not end well. It is critical to determine if the client’s expected schedule is feasible given your organization’s circumstances and current workload. If the manpower is available in the project timeframe and all other areas seem to be in check, you may be in good shape to move forward.
Some additional details that play a large role in the qualification process should be clarified:
o Does the client have a budget they are willing to share? This feedback can be instrumental in understanding goals—the worst that can happen is a project owner declines to share. If requested respectfully with their vision in mind, a simple no will not be a deal breaker. However, the information should be sought.
Appropriate Point of Contact
o Are you talking to the decision maker? If not, your time may not be best invested.
o What does the award process look like?
o Has the client given you a clear understanding of the next steps after your bid is submitted?
o Will you be given a thorough review and the consideration you deserve for your time commitment after submitting your bid?
These are simply some preliminary thoughts at qualifying a project, but they are typically the first in line in terms of importance when vetting a project. As tempting as it is to say “Yes! We can handle any project!”, it is wisest to fully assess the situation and understand what your team can address most competitively.