Bidding time is the season that never ends, and we’d like to help you get more R&R in your schedule. That’s research and results, in case you were wondering. Researching before bidding will lead you toward long-term results of meeting project and profit goals.
When bidding on and growing a successful project pipeline, it helps to be selective. As we all know, time is money, and your time should be well spent. Taking every job thrown your way may seem like a smart decision. But when the dust clears, will it make the most sense for your bottom line?
You run the risk of placing your business into a financial hole without streamlining your bid process by collecting and analyzing the market data first. Due diligence on your part will hopefully link up the perfect match for your business and make the profitable jobs start pouring in and the bid process much more manageable.
Bidding the Right Construction Jobs
To know where you’re going, you must first understand where you’ve been. Give your bids a head start to success and take inventory of past projects to see what worked and what fell flat. You can do this by understanding the factors involved in deciding whether to bid or not. Tracking your bid/no bid data will help vet and select the right projects by identifying winning prospects. Do not overthink this part of the process because the questions you must ask yourself are simple.
Is There a “Perfect” Job Selection for My Business?
Reaching for perfection may seem like, well, a reach. But, when selecting the right projects to bid on, client selection is not the place to cut corners. But before you get there, take time to conduct a market analysis.
Factors to Define in Your Analysis:
Make a list of the clients you’ve worked with over the past 12 months and place them in one of two categories: public or private entity.
Whether you have worked in multiple states or are more local, you can list these however you like. For example, a more local operation will use the city or county.
Types of Work
This list should fit the scope of work at your business and can be defined as residential, commercial, or both. You can also break it down to list the structure type – school, bridge, apartment, office, etc.
If It Didn’t Make Dollars, Does It Make Sense?
Looking back on past projects, was the job profitable once everything was said and done? Make sure you’ve calculated all fees, including labor, equipment, materials, and any unforeseen expenses.
You’ll also want to calculate overhead costs, meaning all your backend support. Those costs include insurance, legal fees, utilities, software, etc. It may be time to change your tune if you’re questioning the importance of collecting data and setting profit goals before and after a project is complete.
After all, with the constant increase in building materials and the labor shortage increasing the wages of experienced workers, looking for ways to improve profitability may be the most crucial step you take in this process.
Were You Project Capable?
Don’t let the thought of passing up work get you in over your head when it comes to having the capacity to complete the work. Having the full capability to complete a project goes hand in hand with whether the project will be profitable.
- Do you have the team on-hand to complete the project on schedule?
- Does the scope of work match your team’s experience?
- Is the cash flow available to complete the project?
When you’re vetting and selecting jobs, consider the future of your business. The credibility of you and your workers is on the line. You may be hungry for work, but is it worth the risk?
As important as profit and reputation are to your business, knowing and recognizing your ideal clientele carries equal value to your overall process. You can call it client quality control, but identifying risks through research to understand who you’re dealing with is essential. Along with looking into project history, you should also review the project’s bidding documents, plans, and specifications to identify risks.
Risks to Consider:
Incomplete Construction Documents
Incomplete plans and documents spell trouble for any project and can stall work before it begins. Look over all plans and contracts and check for anything that doesn’t meet legal or safety regulations.
Unknown Site Conditions
Having full knowledge of the condition of the construction site before work begins has both physical and financial benefits. An unsecure job site could lead to serious injuries to workers or damage to materials and equipment.
Proper project vetting and management on your part should avoid this risk, but there is still the possibility of overextending your scope and timeline. This risk puts your reputation and work quality on the line, so make time management a top priority.
You’ll want to first and foremost ensure the safety of everyone on the site by double-checking security and any safety procedure oversights. This includes making sure everything on site is up to code and that your workers are well informed of the latest OSHA rules and regulations.
Once you’ve assessed all the factors, you should be able to make an informed decision about whether to bid or not.
Final Thoughts on Vetting and Selecting Construction Projects to Bid
There’s absolutely no shame in pacing yourself when it comes to bidding. Take your time to do the research before responding to ITBs. Companies who enjoy long-term success take the time to weed through factors of capability, profitability, and risk before any boots hit the ground. No process is foolproof, but the sooner you create and document a process, the sooner you can get to work.
Your next project is just a few clicks away! Start searching our database of commercial construction leads of public and private projects. Find the right opportunities by filtering your search by location, building use, trade or scope of work, and bidding stage.