©2018 by Orzel Black. 

Bid with Value not Price

Updated: Oct 7, 2019

It goes without saying the bidding process is integral to a construction company and though without further thought, it may seem obvious companies want to make more competitive bids while remaining profitable but achieving both is the difficulty that leads companies to success or serious failure. In order to achieve success in the bidding process, companies must leverage technology, industry expertise, conduct strategic marketing, increase productivity and must be willing to take a risk on turning their check on some jobs in order to get the jobs that best fit their niche.

In today’s world its hard to find any industry in which the proper utilization of technology is not a factor of success and the construction industry is not exempt. New forms of technology have served to give the companies who’ve tapped into productivity software, networking websites, and yes, even bidding software streamlined systems and processes. This is always the best place to start because with the proper technology in hand the most precious asset of any company, time, is saved and maximized, in most cases multiplied. Below is a small list of websites and software that can help increase your efficiency:

  • BidClerk – This site provides commercial construction leads and project information.

  • iSqFt – A networking tool, iSqFt is specially designed to help construction professionals connect and communicate.

  • BidPlanroom – Commercial construction professionals use this site to join a bidder’s list, post projects and promote their company.

  • Fieldlens – This helps improve project communication between a general contractor, subcontractor, architect and owner. You can document job issues with photos and keep track of to-dos.

  • PlanGrid – A tool that instantly updates an entire team when there are changes made to any documents.

  • HeavyJob – Not only does this app provide time entry functions, but real-time data on production levels.

  • Autodesk BIM 360 – This program is great for highlighting safety and quality issues as well as managing field data.

images belongs to https://www.mcvandenberg.com/blog/publication-experiencing-supply-chain-optimizations-a-serious-gaming-approach/

It also goes without saying the expertise your company brings to the table as well as the competitive advantage it holds over the competing bidders in the kind of project in question will seriously sway owners in their decision-making process. This, compounded with your company’s ability to get in close with the decision makers and cater to both their emotional as well as conceptual beliefs over the project will make a bid, regardless of price, more competitive.

This leads into the next aspect of increasing your competitiveness in a bid, your ability to strategically market yourself and your company. This is the long game and it starts the very moment you decide you will enter a certain market. You need to find out where the project owners live their lives, where they eat, spend their weekends, what hobbies they have and you need to exploit every one of them. Soften up the project owners by deluging them with your brand. Even before the bid opens they will be questioning who you are, and that gives you the competitive advantage that will put you above the others regardless of the price you throw up. Strategic marketing can begin with a one page op-ed in an industry magazine you know your prospect prescribes to, which you find out by tapping into your prospect’s social circle and asking questions. Direct mailing campaigns seem to be a born-again strategy but doing this after the bidding process can come off much to straight forward. Ultimately, your goal should be that your reputation speaks profoundly about you without you having to speak profoundly about it.

Then comes the trait every company, everywhere and regardless of industry should strife to achieve, increased productivity. The fact of the matter is we live in an on-demand world where consumers have zero patience for delays or excuses. Your company becomes more competitive in any bid the moment your costs are lowered due to streamlined processes and economies of scale. This is achieved by creating a sound infrastructure based on a reliable supply line, a well trained labor base, and a network of logistics providers to streamline your mobilization and de-mobilization costs. In order to achieve a reliable supply line you have to find one material supplier who can support every operation and through economies of scale drive down the price and lock in a low price for your materials in a contractual agreement. Next, you must invest time and money on your labor base to ensure they operate effectively and safely so that you can build a reputation of finishing jobs on time or ahead of schedule. Lastly, never underestimate the power of a streamlined supply chain. Economies of scale and efficiency can be met by either having in-house supply chain professionals or by hiring 3rd party logistics providers who can warehouse pre-purchased materials in already established distribution centers through out your typical area of operations. They can also lower the transportation costs accrued by mobilizing your equipment.

In today’s on demand environment competition can be cut-throat, but don’t think the only way to achieve a competitive edge is by lowering your bids! I suggest you look at the way your company functions and ask yourself how you can better achieve success without having to be the cheapest guy on the block. Indeed, after streamlining your company you may find yourself offering lower bids while maintaining the same levels of profitability or even increasing your margins.

Good ol' Grant Cardone puts the some perspective in price VS Value in the following video. Though you may say to yourself this is more for the sales world it is important to understand, every time you move in on a bid you are making a SALE!