02 Feb My Year Analyzing Construction Bids: 5 Things I learned – Part 1
I spent 12 months learning the ins/outs and nuances of how construction bidding works. I’ve been deeply embedded with our clients who have been using RhinoDox for the past 12 months. Somewhat unanimously, they have all said, “I wish we started this earlier”. Here are some highlights of what we all learned last year.
1) Bid History Matters
There is never enough time to estimate and bid all the jobs out there and sometimes it feels like this….
I kept asking the question, how do you know which bids to sink your time into? The answer was experience, gut, and intuition, which I happily accept. But the world I come from, we use data to back that up. At 3 months, then 6 months, and now one year, EVERY client has learned something new from looking at their bid history data. Here are 3 examples:
- A client bid 20 jobs amongst a handful of estimators for a total of $20M+ to a single GC. They thought they should be winning more with that GC…..they were right. They went 0 for 20. Now with RhinoDox they can have a data-driven conversation with them and figure out if they are just a number AND/OR find out why they are losing.
- One client went back and started entering the previous year’s jobs. The result was that they found that one GC they used to win a lot of work with, had not given them a job in the last two quarters. It turns out there was a new head of estimating who had a previous relationship with a competitor.
- We were doing a review of bid history with a client and we noticed an estimator had gone 0 for 5 with a GC. A different estimator said, “Yeah, that’s why I don’t bid them anymore.”
Bid History allows you to prioritize where you spend your precious estimating resources.
2) There are FORTUNES in Followup!
To say it again, time is our most precious asset and we have to use it wisely. The Head of Estimating and the CEO of a large GC told me….
“Listen, the number is important. It’s the first thing we look at. But if our Subs would pick up the phone and call more often, we would award them more work. – “Large General Contractor
Being top of mind and making bid leveling easier will WIN YOU MORE WORK! GCs need answers and help to make decisions. If you are there to assist with that, your hit rates will go up. Period.
If you are working on the next bid while your competitor is helping a GC figure out the answer, I hope your number is low and you are comfortable at those margins.
Visibility helps prioritize follow-up. Before RhinoDox, the majority of our clients used excel spreadsheets to track bid logs. When you have a manual process like tracking in Excel, it leads to inconsistencies and unreliable information. It sounds something like…”What’s going on with the XYZ job?” “Oh, I didn’t have time to enter it, I’ll find out and enter it tomorrow.”
These are the first two lessons I learned in a year of analyzing construction bids…..Over the next few weeks, I’ll share the remaining 3 items.
UPDATE: PART 2 is now available and can be read by clicking here. In this post we cover the 3rd thing I learned which is that you bid probably needs an overhaul. Not just how it looks, but how it’s put together…..sneak peak, if your client has to ‘hunt and peck’ to figure out what’s in your bid, you are losing deals.