Guest Post: Profitable Bidding for Construction Projects - 10 Golden Rules

This article is directed at precontracts professionals who are frequently tasked with processing major tenders of strategic importance with established clients. Converting the tender to a profitable secured contract is their objective. Precontracts professionals could include Precontracts Directors or Managers, Estimating Directors or Managers and Bid Directors or Managers who hold overall responsibility for the direction and outcome of the bid.

Best Practice - What does it look like?

Many bid teams claim to embrace what could be described as ''Best Practice". In reality few actually deliver in all areas. This article focusses on client needs rather than the needs of the contractor or service provider. In other words a client centric approach which clearly provides a profitable outcome for both client and contractor/service provider - Win/Win.

Let's explore common mistakes and variance with best practice in 10 golden rules.

Golden Rules

Rule 1 - Bid/No Bid

This is the most crucial decision of all. If an incumbent company is on the bid list they are highly likely to convert the tender to a contract. If the tender cannot be secured on purely commercial proposals an innovative technical solution which reduces construction programme time and costs will be required.

If such a solution cannot be found - No Bid.

Rule 2 - Win Themes

Ok so now the bid has arrived and needs to be returned by a fixed time and date. Having read the proposed conditions of contract the commercial team will have an angle on risks and rewards that need to be built into the financial proposal. The bid team now need some smart technical solutions and win themes to convert the bid to a contract if there is going to be little difference in prices between the bidders.

Rule 3 - The Project Team

Smart clients require early interaction with the actual team that will be on site to deliver the contract during the bid. It is paramount that the technical solutions come from the proposed project team. This team will be required to promote these solutions at the final post tender interview with the client. The project team need to bond with the client team during mid tender meetings if probity rules allow.

Rule 4 - The Bid Team

Most major global bid teams are supplemented by the addition of various specialist advisors during the bid period. It is always advisable to have an independent Estimator checking and refining the financial proposal and an APMP accredited Bid Writer checking and refining the Technical Content and Executive Summary. The financial proposal and Executive Summary need to go through multiple iterations prior to submission.

Rule 5 - Client Centric Approach

Claiming to offer a client centric solution and actually delivering such a solution needs to be supported by verifiable evidence and a deep understanding of client requirements gleaned well before the tender arrives. Clients are understandably suspicious of speculative statements and unsupported claims. Don't go there.

Rule 6 - Be Brief

Even if the instructions to tenderers do not impose word count restrictions - be brief.

Less is more.

Long winded method statements and other supporting information is never read.

Focus on the Executive Summary.

Rule 7 - Executive Summary

Provide this even if not asked to. The Executive Summary has evolved greatly in the last 20 years. Executive Summaries in the year 2000 were generally one or two page pdf documents in A4P but often read in hard copy at the start of the contractors Technical Proposal.

By 2019 Executive Summaries are read by busy decision makers on their laptops and take no more than 5 minutes to digest. The Executive Summary contains numerous links to verify the written win themes and these are delivered in short 30 second video clips by the team that will deliver the project.

Rule 8 - Post Tender Preparation

OK - its the day after the bid has been submitted and the bid team are catching up on their sleep. Now the real smart work starts. Tender interview preparation and training.

Remember - the project team are not TV presenters but construction professionals who need to rehearse to deliver a powerful and compelling client presentation.

A presentation facilitator who has worked on the bid and who understands the win themes is now required to prepare the presentation team. The outsourced Bid Writer and Executive Summary video clip producer is ideally placed to keep the momentum going up to the final client interview.

Rule 9 - The Client Interview

If there is little difference in price between the tenderers this is where it is won or lost. Smart clients don't want the lowest bid cost - they want long term value and are prepared to deviate from the lowest price.

"The bitterness of poor quality remains long after the sweetness of the lowest bid has subsided".

In addition to delivering a well rehearsed presentation the project team need to be fully prepared to handle all potential questions in Q&A time. Remember that many of the multi-media clips used in the Executive Summary can be embedded into the PowerPoint presentation required at interview. Hence the client interview preparation actually starts during the tender period.

Rule 10 - Post Interview Negotiations

The client team will typically interview say 4 bidders over a two day period and will make a recommendation to their executive as to their preferred choice. This is a final opportunity for the commercial team to resolve any minor terms and conditions before they are cast in stone in the final contract agreement.

How to Implement the Golden Rules

The assembly of a successful bid team is not always straightforward. In many situations project team personnel need to be released from ongoing assignments to work on bids. This invariably presents problems and Maxim Recruitment can assist by providing bid resources on a temporary basis over the duration of a bid to suit the bid budget. This can extend to specialist bid writers, estimators and planners as may be required.

Conclusion

If you are responsible for processing a bid and any of these golden rules resonate with you please contact us if you require support and advice and introduction to suitably experienced bidding professionals. We understand that many companies need to navigate peak bidding workloads and we are here to help.