Economic situations dictate all types of behavior. Contractors have options when the economy is booming, including the ability to be selective about the types of projects to bid. However, when the economy is down, contractors experience a more competitive market place—fewer projects to bid and more competitors to bid against. Because of these dynamics, contractors must differentiate themselves from the competition.
Each subcontractor needs to ask the question, “Why me?” The general contractor is certainly asking the question, “Why this subcontractor?”
- Why should the GC select one SC over another?
- What does the GC look for?
- What are the selection criteria?
- What makes a subcontractor not simply the lowest bidder but the best bidder?
- What needs to happen to secure this win, as well as set alignment to win the next several bids?
The answers to these questions are important to GCs, developers or owners. It is imperative to provide reasons why price isn’t the only way to determine the winning bid.
SCOPE OF WORK
Everyone wants “it” for less but expects more and it begins with the owner. They want the architect to give more but design for less, the architect wants the GC to deliver more but build for less, following suit, the GC wants the subcontractor to do more work faster but do it for less; and finally, the subcontractor wants the supplier to lower their costs but deliver full payments ahead. Is less more? Is more less? Confusing to say the least. A thorough and complete understanding of what is being asked of the subcontractor is essential.
What exactly does the bid contain? Knowing the intimate details of the project is the subcontractor’s foundation for building trust with the GC. Using a color-coded digital takeoff provides a way to easily identify the details of the quantitative measurements. A visual representation of the takeoff simplifies information sharing and will easily set one subcontractor apart from another. Going a step further, inserting color-coded legends on the pages of the documents enhances understanding of the takeoff. These documents are then ready to be printed or saved as PDFs for mailing and/or emailing to the appropriate parties.
The bid should be flexible with the quantity takeoff in order to be summarized by bid package breakdowns, building areas or phases. The ability to drill in and out of the estimate will allow a subcontractor to provide a level of detail not often communicated to a GC. A valued subcontractor leverages the power of digital communication to share the details of the project with the GC. A “live takeoff” demonstrates a full comprehension of what the work will entail and that the bid submitted has all aspects under consideration. Sending a takeoff file (in a protected status) to be viewed by the GC is powerful. The subcontractor has aided the GC by providing a more thorough understanding of the project details. In turn it provides the GC a higher level of confidence in the subcontractor and partnerships begin with this trust.
All relationships sink or swim on communication and this is inherently true of business partnerships including those between GCs and subcontractors. There are critical communication times during the takeoff and estimating process. It is essential to be as descriptive as possible when completing a request for information or change request. The longer time goes between the subcontractor identifying an issue and the GC learning of the issue, the higher the probability that there will be a breakdown and profitability will go out the window.
There are some subcontractors that still lug a set of plans to the copy machine and attempt to align the area where the issue resides. At best this copy is likely printed and/or faxed in black and white and sent to the GC. The more efficient and effective way is sending the plan section in question electronically; retaining the color-coded takeoff and imbedding hyperlinks to details, photographs, and specification documents. This includes items discovered by the subcontractor or submitted via change orders. The power of digital overlay (placing a set of revised plans over the original plans) identifies within seconds that part of the original plan is “dead” (colored red) and that which is “new” (colored blue).
Online digital takeoffs, the ability to copy current views of the plans, and instant communication of changes via any digital online device are incredibly beneficial. Rather than waiting for the plans in the mail or deciphering the fax that came through; using a laptop, tablet, smart phone or other device, the GC has an email with all of the information that illustrates the issues at hand. Putting the right information in the right hands at the right time empowers a person to make informed decisions. It ultimately saves time and money while reducing labor risks.
Flexibility and adaptability are key traits of a valued subcontractor. General contractors often have requests that need immediate response especially on bid day. For example, the ability to quickly present price scenarios for various scopes of the project demonstrates to the GC that the subcontractor has complete understanding of the project. The most efficient way to handle these ad hoc requests is by leveraging automation that separates the bid into areas and/or phases.
Dynamic reporting that shows bid detail and summary by selected area allows the subcontractor to respond quickly and accurately to the GC. As mentioned earlier, the information is sent electronically ensuring that the response is in the hands of the GC ahead of the competition. A greater level of detail added to an estimate enables the subcontractor to be more nimble and provide varying price scenarios when requested.
Scope ultimately determines if you win or lose a bid. Being flexible with scope is best done with a collaborative takeoff and estimating process. While it is possible to provide specific information on an estimate manually, it is not likely that doing so is efficient or timely. Automation assists in bid condition detail identification and makes reassigning bid items to different CSI sections more powerful.
Each effort the subcontractor makes to help the GC understand the price and align it to the scope of work elevates the value delivered. Building a long term relationship with a GC is an ongoing process. Don’t make the GC guess what is meant in the estimate. Be clear and elaborate on the qualifications provided.
WINNING THE BID
As the construction industry slowly makes an upturn, which is good news for everyone in the business, the subcontractors that position themselves as greater assets to the GCs during these leaner times benefit even more as the economy improves. Providing GCs with detailed bid information that is adaptable to different pricing scenarios, as well as varied bid package breakdowns differentiates one subcontractor over another. Communicating the comprehensive, visually-displayed detail digitally/electronically provides even greater value. Being timely with special ad hoc requests from the GCs during the bid process provides higher probability that the GC will be awarded the project.
Assisting the GC in winning the bid is the first step in which subcontractors may demonstrate their value to a GC. Once a project has been awarded, there are more actions a subcontractor performs to continue providing value to the GC, to the project and to their own future.