In the construction industry, contractors bid for work on projects. These bids may be solicited by potential general contractors, developers, or builders when they are planning to develop a new project. Most construction companies generally bid on more projects than they actually take on. According to Procore, a ratio of 5:1 is considered good when you bid on five different jobs but are only awarded one.
Here at UMC, Inc., our bidding process is headed up by our estimation team. They receive the bidding requests from senior team members. There are two kinds of bids. A public bid is a government-funded project, and these types of projects include open invitations for qualified contractors to submit. Private bids are solicited by request, either directly to qualifying companies or as a result of a sales or partnership arrangement. Typically, a request for a bid will include detailed information on the project plans, construction specifications, type of contract, bonding, and insurance requirements.
Armed with the bidding information, the estimation team gets to detail everything that may go into the bid. They will price out the amount of supplies and personnel that will be needed to complete their portion of the bid. For example, our bidding team must estimate each job’s plumbing and HVAC materials. The bidding team bases their projects on their current pricing models and works with the purchasing team to get an accurate idea of the potential costs and access we have to supplies based on our relationships with manufacturers and suppliers.
Once the initial bid is prepared, another member of the estimation team always looks at it again. Peer review is crucial to catch potential mistakes or fix anything that may not be accurate. Bids come in fast to our estimation department, and they work quickly to prepare highly detailed spreadsheets and reports that help UMC, Inc. get awarded work contracts. So, the team works fast on each bid and always makes sure to check one another’s work to make sure it’s accurate.
Despite all the work that goes into preparing a bid, it’s not always guaranteed that UMC will be awarded the job. Sometimes, we don’t get it, or sometimes, the team that requested the bid will ask for modifications. When that happens, our estimation team returns to the bid and offers alternative value-added solutions and materials to reduce costs. The bidding process can be confusing as project developments fall through or building plans change after the initial request is submitted. Our estimating team has to stay on top of all of this and be prepared to supply the information to help UMC land the contract and be awarded the work.
UMC’s commitment to accurate and frequent bidding in the past few years has been one reason we’ve grown so quickly. It can be frustrating as potential bids come and go, but it’s essential for our growth as a company. Our estimating team works very hard to help us secure work on future projects, and we’re grateful for their skills and expertise!