Today’s construction bidding environment is competitive and complex. Because of this, construction professionals often approach project bidding by offering the lowest possible cost. However, having the lowest bid does not necessarily mean you are bidding competitively.
Winning bids is more complicated than putting numbers together and hoping for the best. In fact, it takes great knowledge and skill to develop a winning bid proposal. Even the smallest mistake can mean the difference between winning or losing a bid. If you want to win more bids, our Chattanooga contractor attorneys are sharing some tips in this article and part two.
Track Your Bid-Hit Ratio
A bid-hit ratio is the rate at which construction firms successfully bid on projects. It is simply a method of calculating and comparing the number of bids sent out to the number of jobs won. Unfortunately, many construction professionals have no idea what their ratio is. Understanding your ratio is a critical component of measuring the success of your bidding process. Your ratio will depend on different factors like the size of your company. Understanding your bid patterns will help you determine the best types of projects to pursue in the future.
Do Not Bid on Every Job You Come Across
It is easy to aggressively pursue every job you come across, but that is not the best way to win bids. You must first determine whether you can adequately perform the job you have set your sights on. Winning a job that you cannot execute properly will only cost your company in the long run. It is even a smart idea to abandon a bid you have already started pursuing if you find that your company cannot handle the requirements or if you have discovered that your company will not make a reasonable profit. Selecting the right work to bid on is critical to keeping your business profitable.
Know Your Job Costs
Knowing your job costs is the key to submitting an accurate bid. Construction professionals who are in a rush to submit bids can find themselves bidding for projects they really are not prepared to handle. Not only do you want to submit a confident bid, but you also want to ensure that you can maintain a nice profit margin. Have you accurately estimated your labor costs, building materials, and supplies? These can be hard to pin down if you do not stay abreast of the rapidly changing prices of building materials and supplies. Reaching out to the project’s architect or project owner is a great way to clarify some of your questions.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.