When you open up your latest construction project for bids, plenty of vendors will likely respond but the quality of their bids will vary dramatically. From finding missing information to reworking line items for easier leveling to untangling crossed lines of communication, you will be responsible for doing what it takes to turn imperfect bid proposals into聽great construction estimates.
Moreover, you鈥檒l need to consider more than just costs. A low bid doesn鈥檛 always mean that you got lucky; it could mean that bidder doesn鈥檛 completely understand the scope, costs, and deadlines of your project. An ostensibly low bid may actually lead to unexpected change orders and schedule mishaps that will consume the money you thought you were saving.
The best strategy is to proactively eliminate鈥攐r at least reduce鈥攃onfusion, misunderstanding, and inconsistency. Here are a few steps you can take to get the most complete and accurate construction bids聽from your vendors.
Get your RFP right.聽If your request for proposal (RFP) doesn鈥檛 clearly outline exactly what you need priced, how and when you need it delivered, and how you want the bids to be formatted and submitted, then you鈥檙e setting yourself up for problems.
Drill down into as much detail as possible. Get descriptive with what you want. A detailed RFP avoids shoulder shrugs and claims of 鈥渨ell, you didn鈥檛 make that clear!鈥
Name names.聽Include a roster of your project team with a way to contact your project manager, along with the architects, engineers, approved subcontractors and any consultants they may need to communicate with. These are the professionals who will provide details and act as a helpdesk for general and technical questions. They鈥檒l be the links in the unbreakable chain of the job鈥攁nd the last thing you want is a missing link.
Work only from the most current RFP.聽Construction projects are the result of an evolution of plans that may change over time. Be certain that all of your bidders are working on the very latest version of your聽project documents. The best way to do this is to post the RFP in a centralized, digital location where old versions can be removed altogether and only the most current version remains.
If you must pass around an actual document, be sure to use a specific name, date, version number and time stamp so everyone can quickly identify the most recent version. Assign a 鈥渢raffic manager鈥 or project manager to circulate the latest version and get signoff from each party that they鈥檝e received the most recent document.
Split up your bids.聽When it comes to聽creating a bid form, there鈥檚 a delicate balance between being too general and making the contractor鈥檚 head spin from too much detail. Land somewhere in the middle鈥攇ive the contractor separate RFPs for separate projects, in small, bite-sized doses. For instance, if you鈥檙e requesting bids that include both an office redesign as well as bathroom renovations, send a separate bid form for each project, rather than one detail-heavy, overbearing RFP. This way, the contractor can focus on each job separately and you can analyze each bid more accurately.
Get granular with your bid form.聽CSI codes, as developed by the聽, will help you get more consistent bids on individual line items across vendors鈥 proposals. Many architects swear by these codes because they help avoid confusion about the scope of each trade. For you, they鈥檒l help avoid misunderstandings, as each particular task is precisely spelled out.
Act like this is your first time.聽When reviewing the bids, ask 鈥渨hy鈥 a lot: 鈥淲hy is this cost so high?鈥 鈥淲hy is this delivery date so far away?鈥 鈥淲hy is this material so cheap?鈥 You most likely will need to go back to the bidder and clarify anything that feels wrong or too good to be true.
Pay special attention to bidders who communicate well.聽Vendors who ask good, thoughtful questions during the RFI (request for information) process are likely to submit more accurate bids. Additionally, waiting around for a response to a bid is frustrating for General Contractors (GCs). The GCs who follow up with you and politely, professionally keep in touch while waiting may have an edge in the聽competitive bidding process. These are bidders who want to stay on your radar and provide a little extra effort in establishing a relationship with you.
Centralize your communication.聽Things happen: employees leave, and so do general contractors and construction managers. Then what? If your project communication is centralized, you鈥檙e less likely to lose valuable data or experience project delays. It will also be easier to ensure that everyone on the project team is working from the same documents. File your plans, permits, specs, official docs, contracts and even random project notes in the same place for maximum efficiency and accessibility.
Use software built for real estate project management. Still, depending on Excel to get you from soup to nuts? Because bid management is getting more and more collaborative, Excel is not going to cut it, especially not in real time. Look for real estate project management software that will automate some of the manual work, like leveling bids, while providing better insights into historical pricing trends and vendor performance.
At the very least, move your Excel work to Google Sheets. It鈥檚 built specifically for team collaboration and it鈥檚 streamlined, functional, and user friendly. It is still subject to human error and many of the other聽flaws inherent to Excel, but it鈥檚 a step forward.
Don鈥檛 forget to gather supporting information. These backup docs can include prequalification forms, work histories, certifications, and license details. Some are required by law; others are just good sense. Check your local government鈥檚 rules and regulations. Overall, supporting information assures that your bidders are eligible to work with you (and work in your state) and meet the requirements needed to perform a job like yours.
Know your history with each bidder.聽Referencing a vendor鈥檚 past bids and performance notes can lead you more quickly to final pricing and a more confident decision. Make it a policy to track whether vendors submit their bids on time, whether the spread between their original bid and final price is acceptable and how easy they are to work with.
Another benefit to leveling bids the right way: it gives you a chance to get into the mindset of your potential contractor, learning what鈥檚 important to them and the time and skill they are going to need to deliver. You can also tell a lot from their organizational and presentation skills鈥攄on鈥檛 underestimate an attractive, easy-to-understand bid.
If you liked this article, here are a few聽eBooks,听webinars, and聽case studies聽you may enjoy:
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