The pitfalls a contractor or subcontractor can fall into when pricing tenders for a client are numerous. However, the tendering process provides an opportunity for the contractor or sub-contractor to demonstrate their suitability for a project by providing a quote where the figures not only stack up, but the presentation and accuracy exceeds the client’s expectations. With a slick, accurate quote, you’re more likely to win the job by demonstrating an attention to detail and providing quality work from start to finish.
There are several common mistakes made when tendering for construction projects which can harm the chances of the bid being successful.
1. Human error
Human error is the most common mistake made in tenders, and it often the direct reason for most of the mistakes that follow. It’s a difficult pitfall to prevent. No matter what, humans will always make mistakes. However, there are certainly actions that can be taken to minimise these errors.
Tendering is a rushed process, often clients give contractors insufficient time to prepare the bid. Further, contractors are reluctant to spend a lot of time tendering. By its very nature, it can be wasted time if the job is not won.
Take-off and estimating software such as Groundplan removes the need for manual data entry and calculations, removing many opportunities for human error which influence the tendering process. Not to mention the time saved.
2. Inaccurate formatting
Tenderers can be penalised or disqualified for not following the specified requested format. Different types of tender may require specific documents to be submitted for the tender to be valid so it’s important to thoroughly read all the information received to ensure nothing is forgotten.
Along with the various requested formats, a tenderer may also request multiple copies. For example, it’s not uncommon for a version without pricing information to be requested; or an Excel document or even a hard copy submission so that each member of the procurement team can review the bid.
The client may also request that questions are answered in a certain way or that value engineering proposals are submitted. It’s important to be meticulous in checking that the tender meets the required formatting and that the number and type of copies asked for by the client are supplied.
The Groundplan software allows the contractor to export their estimates in a neat, presentable and multiple formats, again reducing time and stress while increasing accuracy in your tender.
3. Missing information
Tenderers can also be penalised or disqualified if there is required information that is missing from their tender bid. For example: if a question is left unanswered, items missed, provisional sums have been forgotten, or the pricing schedule has not been followed.
While the bidder may be allowed to provide the missing information after the initial submission, this cannot be guaranteed. Often the tender is simply disqualified.
Groundplan has built-in libraries for each trade package, removing the risk of missing measurable items from the tender submission.
And don’t forget to sign all the necessary documents. Missing information is a result of human error and failing to properly read the tender documents thoroughly.
4. Misunderstanding information
For a tender to be successful, it’s imperative that it demonstrates a thorough understanding of the client’s requirements. Submissions that are generic rather than bespoke are unlikely to be successful.
A misunderstanding of information or scope in the tender submission will appear highly unprofessional to a client. Misinterpreting drawings can lead to inaccurate measurements and/or pricing, as the estimated cost will be either too high or too low as a result.
5. Inaccurate costings
Typically, a tender pricing document will be provided in a format that enables it to be completed by tenderers. This makes it easier for those reviewing the tender bids to compare the various submissions. If this pricing document is submitted incorrectly, the final prices and the rest of the estimate may be discarded by the client.
It is also important to not just price this schedule without looking at the drawings, often items can be missing from the client prepared schedule.
Be sure to obtain accurate and competitive prices from your subcontractors to be included in the bid price. The scope of work/services being requested from subcontractors must be clearly defined in order to avoid unnecessary or inaccurate costs being incorporated into the tender bid.
It is also important to ensure that when many subcontractors are measuring works, nothing is overlapped or doubled up in pricing in multiple packages, obviously adding unnecessary expense to a tender submission. Any costings that are incorrect will cast doubt on the suitability of the tenderer to successfully complete the project.
It is also important for the contractor to accurately price each individual item as a client may wish to remove certain items from the tender. i.e. be consistent in pricing and do not insert all profit in a few items and then under-price other items. Groundplan’s pricing software can assist with the accurate pricing of works in this format.
6. Inaccurate measurement
The contractor must spend an adequate amount of time reviewing the plans and specifications to be able to provide accurate measurements. Care should be taken to ensure that measurements taken from the drawings accurately reflect the pricing schedule, notes and tender information.
Groundplan take-off and estimating software allows a contractor to complete an on-screen measurement take-off very quickly, speeding up and improving the accuracy of the measurement. Accurate measurements are essential in ensuring an accurate price is submitted to the client. The tenderer should also ensure that the correct method of measurement is followed on the project. E.g. ASMM or ANZSMM.
Large errors in quantification may also be noticed by the clients Quantity Surveyor, again making the tendering contractor appear unprofessional. With most contractors using the same subcontractors within a specified geographical area, often it is incorrect measurement of certain packages by the main contractor which can win or lose a tender, as in most cases the priced rates will be the same.
7. Spelling and grammatical errors
A tender bid where spelling and grammatical mistakes have been overlooked, may not necessarily disqualify the tenderer, it certainly presents the client with an unprofessional impression. Documents should be carefully checked and proof-read to correct any errors before sending to the client. This step is often overlooked, yet it can prevent many of the other pitfalls. With a last proof-read and review, the contractor may pick up on missing information that would have otherwise been missed.
8. Failing to visit the site
Every construction site is different. Failing to visit the site prior to submitting a tender can mean that the bidder does not have a comprehensive understanding of the requirements of the project, the needs of the client, and the likely conditions that will need to be considered within the bid. This can also be a problem if the bid is successful and issues become apparent once work begins.
A site visit is an essential step in accurately pricing works, allowing for necessary prelims for difficult sites, allowing for sufficient demolitions and strip out as well as finding out about the site topography and site access/egress points.
9. Late submission
Late submissions are surprisingly common and will almost certainly result in disqualification. Get your submission in on time by not leaving it too late to begin. Start the bid early and allow sufficient time for its completion.
10. Overlooking risks
Identifying and managing risks is probably the most overlooked aspect of preparing a tender bid. Every construction project comes with its own unique set of risks. Once the contractor has identified the potential risks, they need to analyse and evaluate each one individually so that they can be properly managed and mitigated if they occur.
Risk also needs to be factored into the price for the construction work. Often the risk on a project falls on the contractor.
Every construction project has risks that need to be considered. E.g. design risks, suitability of ground risks, construction risks etc.
If all contractors pay close consideration to these potential pitfalls throughout their tendering process, the likelihood of errors occurring is dramatically reduced. The chances of winning more bids becomes greatly increased.
Many of these issues can be remedied with care and attention when working through the tender. Some of the points, managing risk for example are much more difficult to predict.
Be sure to consider the enormous impact take-off and estimating software such as Groundplan can have in removing many of the errors in pricing and measurement.