How to Bid Construction Jobs: 8 Tips To Boost Your Success Rate
Written by Bridget Cooper
To survive in the construction business, you'll need to master the art of bidding and winning projects. If you're not winning enough bids, you're on the highway to bankruptcy. That's the harsh truth.
Unfortunately, the pressure of it all can lead some contractors into bidding too low just to get the job. This then creates a situation where you have to pay expenses out of your pocket – another sure road to bankruptcy.
On the other hand, if you bid too high, you risk missing out on the job. It's the biggest dilemma in construction bidding.
Want to learn how to bid construction jobs without shooting yourself in the leg? This post is for you.
Here at Downtobid, we’ve invested 4+ years building advanced bidding tools for GCs and specialty subs. We’ve also operated as a bidding agency, compiling highly competitive bids for 50+ contractors across the US.
Follow along as we discuss some actionable tips you can apply when bidding to increase your chances of getting hired without compromising your bottom line.
But even before we can get to creating winning bids, how do you find projects to bid on?
How To Find Construction Jobs To Bid On
Here are some methods to ensure you always have active jobs to bid on.
1. Sign Up For Construction Bidding Sites
The easiest way to find open construction jobs is to sign up to a construction bidding website. However, competition in this category is stiff, and you'll need to act fast to increase your chances of landing the job.
Some popular construction bidding websites you can explore include:
- Downtobid (perfect for inviting subcontractors)
- BidClerk
- ConstructConnect
- iSqFt
- Bid Express
Some of these websites will require that you pay a membership fee to join.
Local, state, and federal websites also carry information on public construction projects that are open for bidding. These include:
Additionally, developers and project owners may advertise their open projects on on local business journals and newspapers, so keep an eye on them. You can also check out our top 3 favorite places to bid on construction jobs.
2. Trade Associations
Join trade associations related to the construction industry. Some of them include:
- Associated Builders & Contractors (ABC)
- Associated General Contractors of America (AGC)
- American Subcontractors Association (ASA)
- Construction Management Association of America (CMAA).
Apart from helping you win more work, trade associations come with additional benefits including excellent networking opportunities, and discounted prices for car rentals, supplies, and insurance.
Speaking of which, building a valuable network is also a great way to get bid invites and land construction jobs. Attend industry events, trade shows, and conferences to build connections with other professionals and decision makers.
In the process, you will learn about upcoming construction projects and get yourself on bid lists.
Trade associations are also be great resources for courses and educational materials to stay up to date on industry trends.
3. Leverage Your Personal Brand
Like with every other business, having a powerful brand in construction will open doors for you and significantly amplify your business growth.
It takes time and effort, but once everything is set up you won’t even need to use bidding sites because the clients will be coming to you.
If you decide to do cold outreach, the construction companies and developers will be glad you called because your reputation precedes you. And when, a construction project comes up, you can be sure you will be on the bid list.
Yelp, LinkedIn, and Facebook are three great platforms you can leverage to establish yourself as a reputable general contractor or sub.
Another approach you can take is to create a personal website and leverage the power of content marketing and SEO. There are tons of other contractors that are doing it successfully that you can learn from.
How To Create Winning Construction Bids
To create a bid that gets you hired, you need to understand how clients evaluate each bid. Historically, cost was the only factor to be considered. You got the job if you had the lowest bid.
While that's still the case for most government projects, clients in the private sector are now mostly looking for the best-value bid. That is the bidder with reasonable pricing who also meets the full requirements of your project.
Some of the other factors being considered include:
- Capability and experience
- Reputation
- Safety
Typically, the received bids are taken through bid leveling which involves doing a line-by-line comparison and noting what was included and what was excluded.
That said, cost estimation is still the most important step in the construction bidding process and you will need to master it to stay competitive.
Cost Estimation Tips
The truth is estimation is one of those processes you will need to learn from experience. However, doing your due diligence will go a long way. What am I talking about?
- Carefully go through the project plans and drawings to determine the full scope of work. This will help you with accurate blueprint takeoffs and to also submit a complete bid. One way to get your bid disqualified is to submit it without key requirements.
- Take accurate measurements and estimate every piece of material you’ll need for the job. For instance, if you're framing, determine how many 2x4 frames, nails, and other materials you'll need and keep a record. Inaccurate measurements can result in overestimating or underestimating project costs. Also, make sure you’re using the correct units of measurement. You'd be surprised how easy it is to mix up square feet with square meters.
- Attend pre-bid meetings. Apart from allowing you to build rapport with the client, you will get a better understanding of the project requirements to assist you with your estimation with a pre-bid meeting.
- Visit the construction site for additional details. Paperwork will only give you partial details about the site condition. When you visit the site you gain a better understanding of existing conditions, and you can better plan the logistics for material delivery. Maybe the site is not directly accessible by truck. You’ll need to figure out how the material reaches the site after delivery.
- Keep records of the cost of each project you handle. 40% of businesses fail to do this. Comparing actual costs vs your estimate will help you refine bids over time. Estimating is no perfect science, but good practices get you close to the correct number. Always keep records so that you have historical data to help you send accurate bids in the future.
- Don’t forget to account for overhead costs. It’s quite common for contractors and subs to go short on profits because they forgot to account for overhead costs. This could be anything from material wastage to accidents at the workplace. You accidentally cut through plumbing during repair, how do you make up for the cost?
- Know where to get your prices. For material estimation, you can start an account with a local supplier that distributes everything you need for your specialty. Build a relationship with a sales rep at that supplier so that you have an inside man to speed things up for you. If you're lucky, you may even score a gem who can translate site plans into an itemized list and send you the cost.
Leveraging Your Skills and Qualifications To Stand Out
What distinguishes you from other bidders if you end up bidding the same prices? It's your experience working on similar projects and the capability to complete the current one with no hiccups.
That’s why it’s important to add any extra information that demonstrates your skills and qualifications. Project owners can even overlook your higher prices if they're convinced of your skill.
Some additional details you can add to your bid to gain the trust of potential clients include:
- Well-articulated scope of work
- Quality and the size of your team
- Proof of financial security
- Testimonials from past clients
- List of necessary permits
- Certificate of Insurance
- Project timeline divided into milestones
- Other professional qualifications
In most cases, the client will specify their requirements including documentation in their Request for Bid. However, never pass up the chance to add anything that will give you an edge over other bidders.
Submitting The Bid
Every client has their preferred mode of receiving bids. It could be through PDF documents sent over email or a dedicated bid management software solution. Always follow the prescribed bid format.
If you are sending a PDF document, make sure you are using a custom company letterhead as it will help you appear more professional.
Once you've sent the bid, it's time for the project owner to pick the winning bid and initiate the construction contract.
Here are some additional tips to increase your success chances
1. Time is Of The Essence
Yes, the quality of your bid is what helps you land the job. However, your chances of success are higher if you're competing against 5 bidders than if you're competing against 30.
The decision-makers tend to pay the most attention to the first bids. After a while bid fatigue kicks in and every new bid starts to look like the last one.
How do you ensure speed without compromising bid quality? This is where automation software comes in handy.
The cost estimation is the most time-consuming task in the whole bidding process. It’s even worse if you’re a general contractor relying on subcontractors to send their bids so you can submit your proposal to the client.
Save hours of work with Downtobid. To begin with, our AI-powered solution will automatically identify bid packages from project documents eliminating the need to manually go through the plans and specification sheets.
Next, you don't have to waste time looking for qualified subs for the role. Downtobid automatically matches your bid packages to qualified subcontractors in our system and even drafts a personalized Invitation to Bid (ITB) to encourage quick responses.
You can also integrate Downtobid with any takeoff software of your choice. Ultimately, you want to take as little time as possible at each stage and if you can have different tools working in sync, you will be unbeatable.
Not to mention, automating tasks like bid package creation and cost estimation will help you avoid costly errors.
2. Focus On One Area Of Expertise
When starting in construction, there is always the urge to bid on every job that comes your way. However, bidding is a time-consuming process and you need to ensure you are investing that time in the right projects.
When you choose one area to focus on, you develop a better understanding of clients and their expectations. You also get familiar with project requirements which helps position you as an expert.
If you are starting as a residential home contractor, make sure you are specifically looking for bids in this area. The profit margins in a commercial warehouse may be attractive, but your chances of scoring the job against contractors specializing in the area are slim.
And in the off chance you land the job, your inexperience in such a project may lead to bad-quality work which then leads to a bad reputation.
It’s better to bid on 5 jobs that are a perfect fit than 20 jobs that you’re just shooting in the dark.
3. Create a Recognizable Brand
Build your perceived value by having a strong online presence and engaging with the client so that you are always at the front of their minds. This increases your chances of getting invited to bid or even landing the job depending on the project delivery method. The client may choose to work with you as their construction manager to help reduce costs.
4. Build a List Of Trusted Subcontractors
The process of sourcing subcontractors can be a time-consuming hassle. To save time and ensure guaranteed quality, we recommend creating a list of trusted subs that you can reach out to when a new project comes up.
5. Maintain your License
Make sure you have a proper operating license for your area of specialty. It doesn't matter if you have to pay a fee or take an exam. It's a worthy investment to help build trust with your clients.
6. Get Bonds and Insurance
Potential clients may also ask for a certificate of insurance in case anything goes wrong during the construction process. Some insurance covers to consider include workers’ compensation insurance and builder’s risk insurance.
Having a surety bond that protects the client if you do a poor job or fail to complete the project is also a major boost to your bid success rate.
7. Consider Permits
As a contractor, it's your responsibility to acquire the right permits for the job. Research permit fees in advance and include the cost of the permit in your construction bid. This is a great way to show potential clients you’ve done your due diligence which helps build their trust in you.
8. Always Follow Up
You've done all the work and sent out the bid. Now what?
If it's been a while and you still haven't heard from the potential client, don't be afraid to reach out. The worst that could happen is that they don't respond.
Best case scenario, there was an issue with your proposal, so the client asks you to make some changes.
If the job has already been awarded to another bidder, following up can still help get you invited to other projects.
Conclusion
There you have it, everything you need to know about creating a winning construction bid. Just remember you can do everything right and still fail to get the job. That's not the time to give up.
Bidding is a numbers game. And jobs won't just fall on your lap, especially when you're starting. Go out there and hunt. And when you finally get that first job, apply your everything. That's how you build a reputation and that's how you're able to compete with the already established businesses.
Oh, and one last thing. You will lose money when at the beginning. Embrace the mistakes and use them as a learning experience to get to where you want to be.