Mirror mirror on the wall, which is the best bidding product of them all? We wish life could be like a fairytale. Swirl your wand and swoosh; solutions would magically appear. Unfortunately, it’s not. As a contractor, your plate’s always full of jobs. And vetting bids is one of the most crucial tasks of them all. Thanks to emerging construction trends, we can be at ease and let the software do the job for us. Technology can do the work for you, but you need to do your homework beforehand. The first step is to list construction bidding requirements if you want to find the best construction bidding software.
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This article will:
- Explain the Meaning of Construction Bidding
- Give Insights of Commonly Used Bidding Methods
- Help Explain the Bidding Process
- Provide a List of Construction Bidding Requirements
- Give You Tips About Overcoming Implementation Challenges
What is Construction Bidding?
Construction bidding is the process of submitting proposals either to contractors, managers or owners. It generally entails project costs, scopes of work and tentative completion dates. Remember, the highest bid price doesn’t ensure flawless execution and vice versa. That’s why you need to be extra careful while assessing bids. We can never be too sure, can we? For that purpose, conduct risk analyses too.
We often use the terms “bid” and “estimate” interchangeably. But they possess critical differences. An estimate is just a ballpark number, whereas a bid contains a detailed project overview. There’s no room left for negotiation after you submit a bid (change order requests are an exception).
Construction bidding is a broad term. We need to understand that there’s a fine line between contractor and subcontractor bidding. Contractors evaluate bid proposals and submit them to clients, whereas subcontractors or specialty contractors submit proposals to contractors. This article talks about contractors’ bidding needs.
Notable Methods
There’s a unique way to accomplish each and every task. For instance, without professional electricians, you won’t be able to install circuit boards safely. Similarly, to evaluate bids quickly, you need to understand standard bidding methods. It will not only help you streamline work processes but also allow you to make informed decisions.
Project Delivery
In simplest terms, project delivery refers to the phases a project goes through until it reaches completion. The Project Delivery Institute defines a project delivery system as “the structure of the parties’ relationships, the roles and responsibilities of the parties, and the general sequence of activities required to complete a project.” Did you know there are different types of project delivery methods? They might vary in aspects, but they all share a common goal, i.e., helping owners execute projects on time and within budget.
Design-Bid-Build (DBB)
In this type of project delivery method, the owner first hires an architect to develop designs. After completion of the design phase, the manager solicits bids from contractors. Now, it’s your job to execute the project in the most efficient manner possible. The bid usually covers the overhead and total cost required to build the structure.
Some of the advantages include:
- Control over design and construction.
- Easy to determine construction costs.
- Lower implementation challenges.
If there’s good, then there’s evil too. Similarly, this method comes with a few disadvantages:
- Designing errors can cause financial mistakes.
- A high level of expertise is required.
- Need to take accountability when things go haywire.
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Construction Management at Risk (CMAR)
If you want to avoid unnecessary expenses, CMAR is the right choice. According to this method, you need to hire designers and builders from different firms. You need to take care of the project from inception to completion. You submit the bid that entails a guaranteed maximum price to the owner. According to Tommy Brennan of Ulliman Schutte Construction, you need to provide GMP when the design stage is about 60 to 90% complete. This consists of contingencies, construction and pre-construction services, and subcontractor costs. You need to be careful that the actual cost does not exceed the GMP.
Some of the advantages include:
- Great financial control.
- Simplified project management.
- Low-risk factor for owners.
Some of the disadvantages include:
- Challenging to manage teams.
- Project delays.
- Increased risks of work duplication or omission.
Design-Build (DB)
The owner or manager gives designing and construction contracts to the same person. So, a single price quote covers both construction phases, making the design-build method one of the most cost-effective.
Advantages
- Increased collaboration between team members.
- Fewer change order requests.
- Quick project completion.
Disadvantages
- Absence of creative element (usage of pre-built stock designs).
- Less managerial involvement.
Visit this site to know about these methods in detail.
Procurement
Once you select the project delivery method, the next step is to decide on procurement practices. Below we have mentioned some of the standard procurement methods.
- Best Value Source Method (BVS): Here, owners award contracts based on cost and other performance factors such as past projects, management approach and key staff. You can refer to a guide on best value selection developed by Associated General Contractors of America and the National Association of State Facilities Administrators.
- Qualification Based: According to the qualification procurement method, owners select contractors based on their reputation, performances, credentials and recommendations. This helps to generate accurate estimates. Construction executives believe that if you possess relevant experience, the project will surely achieve its desired goals.
- Low Bid: Most managers use the low bid procurement method. Owners award contracts to those who offer the lowest bid price. Government and public construction projects usually follow this method.
Contract Model
Generating a formal contract is the final step of the bidding process. You and the owner set specific terms and conditions for the project. Some of the commonly used contract types are as follows.
- Cost Plus Free Contract
- GMP Contract
- Time and Material Contract
- Fixed Price Contract
Basic Construction Bidding Process
It’s impossible to complete jobs without following a process. It lays a blueprint to help you manage schedules and achieve successful business outcomes. Below we have mentioned some steps you can follow to evaluate bids accurately.
Bid Solicitation
The owner first sends out a request for proposal (RFP) or invitation for bid (IFB) to contractors. The documents usually include project specifications, such as cost, contract type and delivery method. Owners might make qualification requests to gather information about your company’s reputation. They can also contact other construction professionals to see if you fit their criteria.
Subcontracting
This step is where you start searching for potential subcontractors. You can use a bidding product to access subcontractor databases. Next, you create and send bid packages outlining scopes of work to multiple subs. They then download and review the documents and send you the final bid.
Bid Selection
You need to determine whether it’s a government or private project to proceed with the bid selection process. If it’s government-based work, you will have to select the bid that offers the lowest price. It’s a rule set by the government to prevent biases in awarding contracts. Visit this site to know more about government bidding regulations. If it’s a private project, then factors such as insurances, equipment costs, qualifications and delivery methods should be looked into before you decide.
Bid Submission and Contract Formation
This is the point where you submit the finalized bid to owners or managers. They will check if the bid fulfills project requirements. If it does, the manager sends you the contract. You have to sign the agreement to finalize the job. You can discuss terms with the owners. Keep in mind that, once you sign, there’ll be no room left for negotiations.
Project Delivery
Execution begins according to the decided delivery method. It outlines the stages a project needs to go through before it nears completion. It helps you wrap up projects on schedule and within budget.
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Key Requirements
Our analysts have gathered a comprehensive construction scheduling requirements checklist that you can refer to while comparing vendors.
1. Analytics and Reporting
The digital revolution has given birth to a data-driven world. According to a study conducted by Statista, the global datasphere will grow from 64.2 ZB (Zettabytes) to 180 ZB by 2025. One construction project is equal to millions of datasets just lying around. Each file carries valuable information. You could turn this information into actionable insights using bidding products.
You can analyze large amounts of information in just a few minutes. It also helps recognize those subcontractors with whom you have previously worked. Furthermore, you can quickly generate cost reports to help determine the company’s financial performance. Its drag-and-drop functionality allows you to add logos, fonts and sections to reports to help fit your brand needs. Export data to Excel to calculate ROI and make intelligent financial decisions.
Understanding market dynamics is of utmost importance. Bidding applications assist you in evaluating relationships between clients and competitors. You can profile business rivals by regions or sectors and formulate strategic plans. View project dashboards to avoid missing updates.
- Audit Report
- Branded Report Generation
- Bulk Report Printing
- Canned Reports/Graphs
- Create Custom Reports
- Custom Export Options
- Good Faith Effort Reporting
- Personalized Data Retention
- Print Reports and Submit Proposals Under Multiple Company Names
- Project Analytics
- Subcontractor Relationship Tracking
- View All Projects Across Your Company
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2. Bid Invitation and Closing Management
Time is of the essence. You don’t want to spend your entire day just sorting out bid invitations. For that reason, check if the bidding app allows you to send multiple bid invites at once. Most bidding products let subcontractors sign forms electronically. Bidder search functionality helps you filter bids by names, company types, regions, trades and cost codes. You can automatically save and attach emails to vendor records. It also enables you to view which bidder viewed, downloaded or responded to the invite.
What do you think is a better option — checking bids individually or viewing them side by side? We guess the latter will help speed up bidding processes. That’s why it’s essential to ask vendors if they offer bid leveling functionality. It will help you compare and evaluate multiple bids simultaneously, all from a single screen. Don’t forget to look out for NDA signing functionality. It prompts subs to sign a non-disclosure agreement before accessing files, protecting confidentiality.
Send multiple bid invites at the same time using Procore
- Bidder Search Functionality
- Bidding Evaluation
- Bidding History
- Bid Invitation List
- Bid Leveling
- Branded Bid Communication
- Bulk Email Invite
- Close Bid Package
- Create and Manage Bid Invitation List
- Create Construction Bid Projects
- Customize Invitations To Bid
- Digital Signature on Bid Form
- Invite Unlimited Subcontractors and Vendors
- Manage Bid Deadline
- Non-Disclosure Agreement Signing
- Track Invitations To Bid
3. Bid Request Management
The COVID-19 pandemic has affected us not only physically but mentally too. It’s hard to find jobs. So, you will receive a lot of bid requests from subs too. Unfortunately, you can’t approve each one of them. But you can indeed offer a fair evaluation. Invest in a product that provides you with bid request management features. Receive notifications when subcontractors submit requests through the mobile app. Treat each bid request equally!
- Addenda Creation
- Assign Bid Packages
- Bid Level Taxes
- Bid Notifications
- Bid Packages Creation
- Bid Request/RFP Creation
- Create Bid Lists
- Custom Bid Forms
- Native Mobile Application
- Subcontractor Selection
Automate RFI/RFP Creation with the Decision Platform
4. General Contractor Functionalities
You can handle multiple projects, but it’s impossible to be involved in each and every process. For that reason, you need to assemble a team that can help you achieve your goals. An organization cannot grow without teamwork. As Hellen Keller rightly said, “Alone we can do so little, together we can do so much.” Make sure that the bidding app lets you add unlimited team members to projects. The right people will help you execute projects flawlessly.
Leaving your office unmonitored is like a child being left alone. The chaos that would emerge! You need to be aware of the slightest change. That’s why you need to choose an app that lets you track employees’ actions. A few studies show that employee monitoring results in increased productivity. P.S. Monitor but respect staff’s personal space too (we trust you completely)!
Wouldn’t it be frustrating to call each and every employee just to let them know about updates? A perfect software offers you instant messaging functionality, keeping everyone on the same page.
Access SmartBid’s built-in subcontractor database.
- Activity Tracking
- Add Unlimited Team Members
- Create and Maintain a Private Subcontractor Database
- Instant Messaging
- Organize Bids
- Organizing Proposals
- Post Unlimited Projects
- Send Specific Subcontractors Invites
5. Planroom and Document Management
One missing file can invite estimating, billing and designing errors. Software with planroom and document management functionalities can save you from such troubles. They offer you document version controls to help analyze differences between past and current data. Grant permissions to authorized employees to protect confidential information. You can view and download records using a mobile app.
Qualified subcontractors can access planroom to gain detailed insights about the project and submit precise bids. Get rid of your fear of running out of storage space by saving data in a secure cloud server. You can add notes to projects to avoid miscommunication between employees. Set project statuses as private or public to manage data exposure among subs.
Dodge Data and Analytics’ planroom management functionality.
- Add Notes To Projects
- Customized File Access Permissions
- Customized Subcontractor Access To Planroom
- Document Tracking
- Planroom Management
- View and Download Documents
6. Subcontractor Functionalities
Searching for a perfect subcontractor is not an easy task. There are several factors, like proximity, certifications, insurances, financial standings and more, that you have to consider before finalizing a sub. That’s why you need to make sure the apps that you have shortlisted give you access to subcontractor databases. Allow subs to upload and download necessary documents with just a few clicks.
You can send RFPs to multiple subs at once using the contact grouping functionality. Furthermore, send customized project invites to subs and assess out-of-network bids quickly.
- Access Subcontractor Network
- Collect Subcontractor Documents
- Contact Grouping
- Customized Construction Project Invites
- Out of Network Construction Bids
- Subcontractor Profile Access
- Uploading Proposals
7. Subcontractor Prequalification
Not conducting a background check on subs can land you in legal trouble. That’s why you should invest in a solution that offers subcontractor prequalification functionalities. Send custom questionnaires to subs to collect necessary data. You can also generate a call list and verify details submitted by subcontractors. Along with that, you can send email requests to subs asking for additional documentation.
Create pre-qualification forms using PipelineSuite.
- Build Multiple Types of Forms
- Call Lists
- Capture Subcontractor Requests
- Custom Fields
- Geolocation Data
- Response Filtering
- Send Email Requests
8. Integrations and Extensibility
Storing information on different systems might put your data at risk. An integrated software keeps you from making data entry mistakes. It is one of the most essential features that you should not miss while seeking bidding solutions. Look out for accounting, takeoff and management integrations to help streamline operations. Update estimates with just a few clicks.
- Construction Accounting Software Integration
- Cloud Document Storage Software Integration
- Construction Management Software Integration
- Construction Estimating Software Integration
- Forms and Contract Integration
- General Contractor Network Integration
- Project Management Software Integration
- Subcontractor Network Integration
- Takeoff Software Integration
9. Vendor Qualification Requirements
What if the app goes under maintenance or you face technical issues? Features can only help you simplify workflows but can’t solve technological difficulties. Solution: Advanced Features + Support Options = Perfect Match. Prioritize those providers who offer support services. You can browse through the knowledge base to gain a deeper understanding of the software and resolve problems. Vendors also assign you a dedicated account manager who guides you through implementation processes.
- Dedicated Account Manager
- Email Support
- Knowledge Support Center
Overcoming Implementation Challenges
You invest in an app to improve productivity and prevent negative cash flows. But implementing software is not exactly a walk in the park. One issue can derail your transformation strategy and disturb business processes. Don’t worry; we have your back! Below we have outlined some of the things you can do to ensure your company’s running as usual and you don’t hamper your daily operations.
Communication is Everything
Assumptions can be dangerous. For instance, if you were under the impression that the bidding software will fulfill project management features too and later you realize it doesn’t, you might suffer from loss. That’s why you can’t hesitate to ask questions to vendors. The more clear you are, the more precise your implementation strategy is. Some of the questions that you can ask providers are:
- What integrative solutions does the vendor provide?
- Is the software compatible with mobile devices?
- Is the application user-friendly?
- Does the vendor offer data migration assistance?
Understand the Level of Interoperability
Transferring data from one system to another is a tedious process. You need to make sure no document gets lost during migration to ensure data integrity. For that purpose, you need to know the level of interoperability between both systems.
It Takes Two To Tango!
There are times when the system goes down for maintenance. In such instances, you can’t do much. You can ask vendors about the available support options such as email, chat or phone. You should also reach out to other industry professionals to get an idea of support teams’ response time. Both you and the provider can drive your business to success.
Look Out for Training Tools
Without adequate training, your team will have a difficult time adapting to a new system. You should check out what kind of training materials the provider offers. Most of them provide on-site and online training too. You can visit the vendor’s website to check about these services.
Follow the Three P’s – Patience, Perseverance and Positivity
Rome wasn’t built in a day, but it was burned in a night! That’s why you need to be patient. A new solution will for sure solve your existing problems. But if you rush, then you might miss some critical procedures. Implementation can be a lengthy process. For that purpose, you need to practice perseverance. And you can’t achieve anything without being positive, can you?
Conclusion
Evaluating bids can be daunting. It increases your stress levels, resulting in headaches. Bidding software can be your savior. They help you automate processes and simplify communication among team members. Reporting functionality enables you to make intelligent business decisions.
It takes time to assess your organization’s needs. You can use our pre-built construction bidding requirements template to simplify processes. Refer to our buyer’s guide to kick start your software selection journey.
How do you think construction bidding software can change dynamics across construction industries? Please feel free to share your opinion through comments. We are always glad to hear from you!