Tips on How to Increase Your Company’s Chance in Winning Construction Bids


Bidding is usually the way that construction companies get most, if not all, of their construction projects. And because the industry is such a competitive environment, construction companies usually follow one golden rule: make an accurate cost estimate, then put in the lowest bid based on the cost estimate.

But even with this tried and tested method, general contractors only win 10 percent of their bids. This means that if they put around 100 bids per month, they only win about 10 of those bids. Some companies fare worse, winning only 3 percent of the bids.

Lowering your prices can be a good thing for the clients, but not for general contractors who are sometimes forced to lower to prices to an extent that they make close to zero profits just to win the bid – a practice not unheard of in the construction industry.

So, are there other ways that you as a construction professional use to increase your chances of winning the construction bid without compromising profit? After all, at the end of the day, construction is a business, and profit is an important component of it. Here are some ways that you might want to look at the next time you go make a bid.


Tip 1: Think Beyond Price


Of course, the price is an important factor in construction bids, but, it’s important to remember that it’s not the only consideration that can award you the project.

A typical construction bid will include typical things scope, terms, payment, etc. But beyond these things, think of the things that are out of the box that will make your proposal stand out. Remember that every project has a distinctive requirement that is more important to the client than the price.

 Maybe roads are going to need to be closed, and your bid could mention how you intend to handle this by using an expert traffic management company. Or maybe there are specific environmental issues to bear in mind, which other bidders might not take into account. 

How are you going to find this out? The key is to meet with the client or the decision maker and find out more about the project. Listen to the client and find out what they find more important than the price, and use this to customize your bid. This little extra factor might just be the thing that gets you the bid.


            Tip 2: Use Technology


Over the last few years, the construction industry has made baby steps towards adopting technology into its processes to streamline it. Nowadays, there is software like construction bidding management software that helps you create faster without sacrificing accuracy.

In addition to being more accurate than using paper-based material takeoffs, using bidding software allows you to create more bids without incurring any additional overhead costs. And, the faster you finish one bid, the more time you have to devote to creating another one because sometimes bidding is a numbers game.


            Tip 3: Preempt the Competition


Almost everybody knows the saying: the early bird catches the worm, and in this case, being there before your competition can increase your chances of winning the bid.

Let’s face it, the probability of winning a bid goes down the more competitors bid for the project. For example, the likelihood of you winning a bid against 70 other competitors is low, but if it’s only 7, then your chances of winning go up.

So, ok you get it this point, but the next question is how do you do this? How do you do make sure that you know about the bids before your competitors? This is where networking and experience come in. If you are new and still don’t know a lot of people in the industry, you can always go to construction bidding marketplaces online and look for projects ahead of your competitors. In other words, do your research! Remember knowledge is power!


            Tip 4: Bid on the Right Project


So, I’m just going to go ahead and be cheesy. In love, people always say that you have to wait for the right person to come. And, in construction bidding, it’s the same. Just because there are lots of bidding announcements doesn’t mean that you have to bid on every single one of them.

Try to narrow down your bids and select the ones that you think that you have a higher probability of success, and by doing so you can improve the quality of your bids.

So what is the “right” bid opportunities that you should bid for? Going back to the love analogy, there is no such thing as perfect love, only someone who is perfect for you. It’s the same with bidding opportunities, you have to look at the ones that are the right fit for your company.

There are a couple of ways to do this. One is to bid on the on what your company is good at. You can’t be a jack of all trades and be good at everything, but you can be great at one thing. The trick is to find that one thing and that can be a tricky part. One of the things that you can do is look at your past projects and see which projects you were able to be successful at, and start from there.

Another thing that you might want to do is to stop bidding at projects that you know you can’t win. For example, there are projects that require specialization, and if you don’t have that, not even a very low bid can make up for the fact that you don’t have the main thing that they are looking for. Again, this goes back in knowing what your company is good at.


Tip 5: Know Who’s in Charge


One of the very first things that you should find out when you are going to participate in a construction bid is to find out who is the boss, or the decision maker of the project. Most of the time, people waste time talking to the wrong people, so cut to the chase, and go for the ones in charge.

When you find out who is in charge, try to get a meeting with them and try to find as much as you can about the project, what they need, what they are looking for. And, once you’ve understood this, then you can tailor your tender to accommodate their needs, giving you a better chance of winning the bid.

A low bid might give you a shot in winning a construction bidding, but, that’s not the only thing that can get you the project. Try to focus on the other things that can add value to your bid because sometimes there are some things that you just can’t put a price at.