One of the more difficult aspects of a construction job for new project managers is creating a solid bid that provides enough money to complete the job and provide some wiggle room without being too high.
The construction world can be very competitive, and often only a few thousand dollars separate a successful bid from an unsuccessful one. In some cases, the project is always going to go to the lowest bidder. However, many times, the business is going to look at the qualifications and reputation of the bidder. Remember that bidding too low just to get the project may mean that either you’re not going to have enough funds to handle emergencies or that you’re going to actually lose money on it.
If you’re new to bidding on projects, here are five tips that may help.
Use Construction Bidding Software
There are a number of programs out there that can help you create a budget for a project. This job cost accounting software is available for many industries, including construction. It can help create bids for either an entire project or a very specific part of that project. There are many benefits to using these programs, including the ability to look back at past bids and have the information that is fairly standard for every bid automatically filled in for the next bidding process.
Use Past Experience
Take a look at previous projects your company has done to see if any of them are similar to the one you’re bidding on. This will give you a good idea of what the project entails and where it might go over-budget. Remember to take into account cost increases, especially if the bid is more than five years old.
Take Time into Account
Remember that your time and the time of your employees is valuable. If the project has a very short deadline, you’re most likely going to be working overtime. Make sure you take that into account when creating the budget. Even if it isn’t a rush job, you may still face delays due to equipment breakdowns, weather, or other issues. Overtime may be necessary, especially if you’re going to be working during a season that’s typically rainy or severely hot or cold.
Don’t Forget to Take Difficulties into Account
Some projects are inherently more difficult than others. Be certain to include this additional difficulty in your bid. If something is going to take specialized equipment or the hiring of a contractor to handle a specialized part of the project, this must be accounted for. Anything out of the ordinary, such as special materials or parts, is going to cost more. If that’s what the client wants, they should be prepared to pay for it.
Don’t bid on a project that you cannot realistically accomplish in the allotted time with the requested budget. Your company’s reputation depends on being able to complete projects that are high quality, meet deadlines, and are generally not over-budget. Don’t submit a low bid just to get the project. If your company has a reputation for high quality work, that reputation will help you secure projects even if your bid is higher than some of the others.
What additional tips do you suggest to new project bidders? What will help them to effectively bid jobs? Comment below to join the conversation!