I am delighted to start this post with a story from a couple of years ago. The Estimator (we'll call him Fred) read and then reread the bid form instructions. Buried in the 1,000+ pages of documents on a large airport taxiway extension bid, there was an odd note. The agency responsible for the project (the “Owner”) had included an “alternate” for some work on the project in addition to the main base bid. With an alternate, the Owner may elect to add predefined work scope at their discretion. This secures pricing for known extra work, but there is no guarantee that the alternate(s) will be built. For instance, if you were building a house and wanted an option to include a pool, the pool could be an alternate. This note stated that the Contractor’s unit prices for alternate items must match the unit prices for base bid items with the same description. We had never seen anything like this before and Fred made sure to check the alternate unit prices before submission.
There were 3 bidders and our firm placed last by a wide margin. A few days later, the phone rang. It was the Owner’s representative who called to say that we would be awarded the $50 million project because the other 2 bids were determined to be irregular. They had apparently missed the note and provided different unit prices on the alternate. Fred and the team were ecstatic. We won because we submitted the only compliant bid!
Practices for Success
Assign Responsibilities
Complex bids are team efforts. Many hands make light work. Most contractors we have polled believe that 1 team member should be assigned ultimate responsibility for each bid.
Own Your Sequence
It is tempting to dig right into the drawings and start preparing a bid file. Isn’t that the fun part? A seasoned manager suggested to me the following order: Start with reading the contract documents, then the specifications, and finally the drawings. Ask questions and seek assistance from stakeholders early. When you are done, take a ride with a colleague and
get your eyes on the job. Then, start the takeoff and estimating process. Over time, I observed that this systematic approach worked for me. What is your sequence, and is it working for you?
Trust But Verify
Public bid law is unforgiving. Tiny errors such as an incorrectly placed signature, a misspelled name, or even the wrong address can result in a low bid being disqualified. Bid submission checklists reduce risk through multiple checks to confirm appropriate forms are all included and completed correctly. The hit rate on all apparent low and rejected bids is 0 percent.
Training
Estimating manuals are fantastic if people actually use them as part of the training process for new Estimators. How are standard specifications and company estimating policies learned in the organization, and how is the information transferred to new team members?
Risk and Stakeholder Involvement
Nearly all government bids require involvement from surety/bonding providers. For nonstandard contracts, legal counsel may need to weigh in on key terms. Key clauses (e.g. “pay when paid”) must be understood and clarified if muddiness exists. Artificial intelligence and machine learning technologies are being developed to assist humans in the risk assessment of construction contracts.
Leverage Operational Experience
Institutional knowledge about unwritten Owner expectations are valuable insights. What does the Owner value most? What satisfies their expectations? What are their pet peeves? Which items are a struggle to get paid for? What is it like to work with them?
New Owners and Geographies
Beware when bidding to a new Owner or in a foreign territory! An obscure note about measurement and payment of an oddball item or a traffic control restriction can make a huge difference. When an Owner is new to you or if it has been a while, Contractors should be super alert and deliberate.
A Contractor who asks pertinent questions and does her homework on the front end will set herself up for success upon award. Owners and Engineers trust contractors who bring legitimate prebid discrepancies to their attention. The alternative is to suffer the consequences of vagueness and uncertainty. Trust and reputation are high value commodities, even in a strictly low bid environment. Estimators rarely get enough credit for their exceptionality as the job requires a tremendous level of attention to detail along with practical knowhow. Building processes through standardized bid submission checklists can save heartache later, and there is no one size fits all solution. Knowing and discussing the Owner’s unspoken norms prebid can prove helpful during construction.
At Edgevanta, we are building a technology to help solve the project acquisition process for our customers. We look forward to your thoughts as we cover the 8 fundamentals.
Finally, I invite our readers to please shoot me a quick note at tristan@edgevanta.io with your most memorable bid story as we would love to hear from you!
Sincerely,
Tristan Wilson
CEO and Founder
Edgevanta, LLC
This is the second deep dive of a multi-part series on the project acquisition process of the construction cycle for highway contractors.
