Tips for Competitive Tendering
Competitive tendering… It’s frustrating, hard and sometimes down-right un doable. It is the most common method of procurement in the construction industry , whether you are invited (which is quite humbling I’m sure) or it’s a public domain.
And let’s be honest, 90% of the time the client will choose the cheapest contractor. Let’s not be the cheapest, sacrifice margins and quality in your pricing abilities. The client wants the best contractor for minimal price – Standard! It can be a stressful time to ensure everything is ticked off, included, competitive yet still make money to cover the bills and let’s hope some profit. Time-consuming admin and pricing skills you may never knew you had have just come to light!! Of course, there is Red QS, who can turn this all around pretty quickly and fairly – But, just in case… here are some of our top tips to help you price for success…
1. Be selective in choosing what jobs to tender for
Tendering is a very time-consuming and costly process for a business, be sure to review all information on what you are tendering for. Does your business have the specialities to set yourself aside for this job? Is the project out of your current capabilities and will you need to explore other help?
2. Attention to Detail
Attention to detail is often forgotten about as contractors are busy pricing left, right and centre! Easy for small, but costly elements to slip through the cracks. Take your time especially when juggling multiple jobs. Advantages could arise from reading notes, drawings, establishing cost savings, noticing mistakes and taking account of PC sums, exclusions etc.
3. Quoting – Too much or Too little is dangerous!
This goes without saying, if you cut your costs and win the job. Cool – You won… But, it’s probably going to cost you rather than making you money! Pricing too high, will set yourself well out of the competition. Checking your subcontractors pricing too. Eg. 30% margin over a 20% standard.
4. If you don’t win – Ask why!
You are allowed to ask for feedback when you don’t win a tender and why shouldn’t you? Think progress. This will help you better understand where you may have gone wrong or areas to improve. Maybe you accidentally submitted the wrong rate and it caught you out. Check-in and make a positive change for the next tender!
Another crucial note to add is to not underestimate the importance of a construction programme. Provide a timeline and programme the duration of the build and time frames of specific parts.