Like any other field, the construction industry is saturated and competitive. Honestly, it is not the construction process that makes it competitive, rather the construction-bid-proposal process. This is the process that indicates your penetration to the market and lands you projects one after another – making it a crucial step for your business to generate profit.

The ratio of bid-to-win is usually one out of six for general contractors. 83% of your bid-proposal time is spent on paperworks. Hence, you need to offer a competitive bid and not merely a low one. To be competitive, consider the following guidelines on how to win a construction project.

Compute the win rate.

The win rate is the basis of construction companies for profit generation. It is obtained by dividing the number of projects won with the number of proposals submitted. To automate the computation, you can use a client relationship management (CRM) system to track opportunities and proposal submittals. Win rate is affected by lead for work, handling of opportunities, pursue of right jobs, and quality of proposals.

Be on the right bid list.

Bidding on every project you find is counterproductive. By narrowing your list of bidding opportunities, you can improve the quality of your bids and select bid opportunities with a higher probability of success.

The following are the points to take note for choosing the right bid.

1. Bid on your niche.

Identify your strength whether commercial or residential projects. Observe your successful projects in history and check completed ones which gave you upcoming projects.

2. Stop bidding on projects you can’t win.

If the project needs a certain specialization you lack, then a low bid will not overcompensate for that deficiency. It will waste your time, money, and effort. If you are bidding for a project which you are not a local contractor, make sure that you know ALL of the conditions of the project and the project area.  This includes (and not limited to) availability of the manpower, local workers attitude, costs of materials and delivery, cost and availability of accommodation and staging area, costs of equipment rental, local ordinances and laws, holidays, etc.

Bid within your financial capability.

You should always consider your available funds and credit capability before considering to bid for a project.  No matter how detailed a contract stipulates payment for the project, it is usual that payments get delayed due to the procedures of the client or disagreements with client with regards to your accomplishment. Having knowledge of this would make your bid applicable to the conditions of the project and you would be able to manage your finances while performing the project.  As a safe rule of thumb, bid for a project which is equivalent to your available funds.

Apply win work behavior to tactical win work activities.

Winning work is not only for the marketing department but also the top management. The upper management should have the willingness to engage all operational client facing staff for client relationship development. Considering this, client-centered services need to be communicated throughout the firm. Use knowledge sharing and collaboration platforms to improve internal and client communication. 

In this competitive industry, you should be strategic on which projects to bid. More than what you can offer is how ahead are you compared to other bidders. While developing a long-term bidding strategy will increase your odds of winning more bids, by using the four guidelines listed here, you can increase your chances of winning more construction bids with fewer proposals.

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