If you work in the construction industry, bidding is probably an important consideration for your business, affecting every project you work on.
Construction bidding is what happens when you, as a contractor, submit a proposal or tender to a client, outlining project details and associated costs prior to you taking on the job. This helps to ensure that everyone is on the same page before contracts are signed.
Wondering what the key steps in the construction bidding process are? Here’s what you need to know.
Request for proposals
First, a client or project team needs to provide a request for proposals! This invites qualified construction contractors to develop and submit their bids ahead of the building.
Typically, a tender manager prepares a package that outlines specific project details relevant to bidding so that contractors know which factors to consider. This usually includes information relating to goals, timelines, and other key project details.
By issuing a request for proposals, a client is indicating that they are almost ready for construction to begin. They just need to receive enough information from various contractors and subcontractors so that they can make an informed decision about who to work with for the duration of the project.
Bid preparation
Once a request for proposals has been issued, it’s time for interested contractors to examine the details of the project and decide whether or not to prepare and submit a bid.
A project or bid manager will prepare a bid for the construction project at hand. Generally speaking, this bid should include clear information regarding resource availability, team makeup, project timelines, and other expected considerations or challenges.
A comprehensive construction bid can make it easier for clients to choose their contractors wisely, as well as ensure that all parties set realistic expectations for the project and its delivery before construction work begins.
Bid evaluation
Generally, a client will receive multiple bids from several different construction contractors. When these have been received, it’s time for the client to review and evaluate the provided information.
When evaluating a construction bid, most clients take a variety of factors into account. They may look at price and inventory data, as well as assess quality, timelines, innovation, engagement, and other contributors that could influence the work.
During the bid evaluation stage, clients may communicate directly with construction contractors to ask questions and clarify any concerns that arise. Some clients may even request an interview or presentation.
Negotiation and award
Finally, it’s time for the client to select the contractor they want to work with! When this happens, the contract negotiation process begins before the contract is awarded to the chosen contractor.
During contract negotiation, both the client and the contractor may request contractual changes. These could relate to money or time, as well as resources and specific deliverables. It’s important that all parties are in agreement before a contract is signed.
When all parties are happy with the terms, they can sign the contract. After this, the contractor can source the required permits and get to work bringing the project to life.
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