Centered on Solutions: Myths and Mistakes of the Bidding Process
MYTH 1: BIDDING MORE MEANS WINNING MORE
Throwing more bids out increases the win rate right? Just like throwing more passes in football means a higher completion rate right? Wrong, more is not necessarily better. What if the wrong bid wins? The one that had the least amount of time spent on it-the one that contains the most risk. The problem in volume bidding is that the estimator often does not bid a project with a full understanding of where the risk lies. This leaves the company exposed in any number of ways-such as quality and profitability.
The solution is creating a thorough and detailed takeoff. Not only will this increase the win rate but it identifies where the risks are and allows the estimator to react quickly and with confidence during the bid process. Like any profession focused on a percentage of wins, estimating is perfected through experience, practice, and intuition. Knowing which jobs in a territory to bid along with detailed takeoffs delivers the right winning bid to the business.
MYTH 2: WINNING THE BID MEANS BEING PROFITABLE
Great, the bid was awarded. The estimate shows profitability. All is well, no worries-or are there? When the project manager receives the estimate, it is suggested that the Ronald Reagan philosophy of “Trust but Verify” applies. Things change from the time of bid win to project deployment.
To manage a project as effectively and efficiently as possible, a thorough review of the quantity measurement is required. Using software solutions that help with this process saves time and improves accuracy/leverage the theory that if digitized plans are colored then the quantity is counted. This review process also improves communication across the project. Field to office; foreman to project manager. Catching problems before they occur on the job site, next to labor savings, has the most positive impact on profitability.
MYTH 3: AUTOMATION MAKES A WEAK ESTIMATOR/PROJECT MANAGER A STRONG EMPLOYEE
It is not uncommon for companies to turn to automation to address performance problems. By itself construction software alone no more makes a weak employee a strong employee than Microsoft Outlook makes a poor communicator a better communicator-it just allows each weak skill to be done faster! However, all is not lost. The best solution for weak skills is training and practice followed by practice and training.
In today’s work climate, there is little time to ramp up new employees so they are often left to their own devices to figure out the tools they work with to do the job. It is intuitive to know that people must be trained on equipment and tools at the job site. No one would consider releasing a new employee to use equipment on the job site without the requisite training, yet it happens all of the time in the office. But when “you don’t know what you don’t know” it is difficult to contribute to the bottom line. Give weaker estimators/project managers a fighting chance by putting them through the paces of training and certification. Then if they don’t step up, it helps the business make informed decisions on next steps.
While this list likely would go on forever, especially if speaking with those of us “seasoned” construction professionals, these three are the most often raised concerns when talking with estimators around the world. The first step to overcoming obstacles to success is identification of shortcomings and challenges. Take an honest look at the process being used for estimating. Understand where there are risks and manage these accordingly. Implement a thorough review process after the win. Most importantly, hire top talent and train those people within the organization.