The pandemic led to one of the most difficult years in memorable history for the construction industry — one in which specialty contractors were hit particularly hard. According to a recent report from Autodesk, project bidding dropped roughly 34% in the 60 days following March 19, 2020, the day the first U.S. stay-at-home orders were mandated. But as the industry slowly recovers, bidding activity in January 2021 not only surpassed pre-pandemic levels, but they went on to hit an all-time high, representing a 36% increase from a three-month, pre-pandemic average.
After a year filled with project cancellations and delays, market data signals that projects are beginning to come back online and many businesses are finally getting back to work, which means competition for jobs is once again heating up.
In this competitive environment, the bidding process is becoming more important than ever. Winning new business and delivering on those bids will make or break the future of many companies.
Here are five strategies specialty contractors are using to stand out from the pack and improve their bidding practices to build more efficiently and effectively, and ultimately win more work.
1. Centralizing data in the cloud
The days of manually tracking bids on paper are long gone. Hunting through filing cabinets in search of a single account number or line item wastes precious time that could be spent on the actual bidding process. Even managing bids in spreadsheets has proven to be an outdated and costly process. (Manual bid entry typically takes over 40 hours a week, with 99% of specialty contractors that track bids in email or Excel missing out on multiple bid invites a year.)
Centralizing the bidding process in the cloud ensures all bid information is in one, consolidated location. By keeping project details, deadlines and communications together, hours of wasted time searching for documents or duplicating work is saved. Storing information to the cloud also makes the data immediately accessible to anyone who needs it. As a result, teams miss deadlines less and are able to create more project opportunities.
2. Use data to improve performance
Once bid data is centralized in the cloud, it can get to work. Data has become the not-so-secret weapon of the construction industry, and those who use it wisely often win. Continuously monitoring and tracking bid data means trends can be proactively spotted, helping to inform bidding technique and strategy. Tracking also helps contractors better determine which projects should be bid on and, as important, which should not be bid on.
Take project hit rate, for example. By monitoring this trend, specialty contractors can determine the general contractors who are worth engaging with and those who are not. Unfortunately, 65% of specialty contractors aren’t actively tracking their hit rate. Why leave something as important as this to chance, or even to memory? Take advantage of available data and find tools to quickly and easily visualize, track and gain insights from the data.
3. Be realistic about costs — and focus on accurate takeoffs
Without accuracy, bids will fall short every single time. Ensuring costs, quantities and measurements are correct and on target is paramount to winning any bid, and when incorrect, serve as a quick ticket to being disqualified for a project.
General contractors can spot underestimated bids from a mile away, which can signal either inexperience or purposely undercut project costs, both of which are red flags. A well-executed takeoff process will help increase a bid win rate and allow for much more accurate and realistic cost estimates. Even more, digitizing the takeoff process allows manual tasks to be automated and greatly reduces errors.
4. Always follow-up on bids — and track wins and losses
Most general contractors receive hundreds or even thousands of bid submissions on a given project. Something as simple as missing information could cause them to put a bid at the bottom of the pile. Proactively following up on bids provides a chance to fill in any information that may have been missed, ask if the contractor would like to see any revisions and creates an opportunity to make a connection with the decision-maker. If during the process it is revealed the job was given to another company, ask if the contractor is willing to provide feedback on the bid, which could reveal essential information to help win the next one.
However, if a contractor has a history of being unresponsive, it is a strong indicator that submitting bids to that particular GC might not be worth it in the future. Identifying and spending time on bids that are more likely to end up in the “win” column is half the battle. Be sure to track and catalogue this type of data to ensure a sound bidding strategy.
5. Get bids in on time
With delayed and cancelled projects beginning to come back online, it is no surprise there has been an uptick in bidding activity. And as more and more of these projects begin to resurface, effectively managing bid invites has become critical. Bids need to be accurate, yes, but there is now an urgency for bids to be delivered on time.
Despite the massive uptick in bidding activity in 2021, the vast majority of teams have still able to turn their bids around in seven days with the help of technology. Digitizing how bids are tracked and managed affords your team the opportunity to get more done in less time.
As more and more projects come back online, specialty contractors have a massive opportunity to win new work and let their employees get back to work too. Being smart about the bidding process increases the likelihood of winning bids, and it saves teams time in doing so.