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If you are a contractor and are looking for work, you must be comfortable with the process of bidding on construction projects. Construction project bidding is an integral part of your job. Learning and developing the proper bidding techniques and making every attempt to win each bid is just as important as the construction job itself. While the construction industry is lucrative, it is also very competitive; therefore, you must equip yourself with the proper knowledge and skills in order to prosper within it. Once you learn how to price a job and bid on it effectively, you’ll be on your way to making big money and employing a large number of construction workers.
Contractors must know how to bid on construction jobs if they want to turn profits. There is plenty of work available for contractors, and many developers with plenty of money to spend on the right construction company. In March 2011, economists were expecting a 0.8 percent increase in the amount of money spent on construction projects in the United States, but construction project spending increased by 1.4 percent during that month. As the number of construction jobs continues to grow, there will be more work for construction companies. Learning the bidding process is not only beneficial for construction workers, it is also mandatory.
Establishing your reputation
The more you bid on construction jobs, the more business you will receive. Continuous bidding allows you to establish your company’s reputation within the construction industry. If your company continuously completes construction jobs according to the specifications outlined by project developers and architects, your company’s reputation will enhance, which will ultimately increase your business.
Construction companies can earn hundreds of thousands of dollars for one project. This is a very lucrative industry because most developers are willing to pay a lot of money for quality work. If you bid on multiple projects yearly, you have a good chance of landing a few jobs. Completing just a few jobs each year can drastically increase your income.
Understanding the bidding process
It takes most contractors a little while to get comfortable with the bidding process. However, as you continue to bid on projects, you’ll become more comfortable and confident in your bidding abilities. You’ll quickly begin to understand the process of bidding on general, commercial and residential construction projects, and these bidding skills will allow you to expand your customer base.
Improving negotiation skills
You will need to negotiate directly with contractors in order to get jobs. During a bidding war, you will have to explain to developers why they should choose your company over another organization, and you may need to work out a deal with developers by providing opportunities for them to save money during the building process. Because you will be doing this so often, your negotiation skills will improve.
One of the major pitfalls of construction project bidding is determining a final bid price. You need to get paid what your services are worth, but you do not want to bid too high and lose a potential customer. When determining a final bid amount, consider the price of materials, the cost of paying employees to help with labor and all other costs. Compare these costs with the amount of profit you want to make to determine a final price.
Government agencies and private corporations have different requirements for their bid processes. This means you need to carefully review the requirements for each bid request and prepare your bid proposals in accordance with the requirements of each company. If you make a mistake in one of these proposals, you could lose the opportunity to work on that particular project.
Unless you are filling out basic job estimate sheets, bidding on construction projects requires at least a basic knowledge of word processing programs. Depending on the company you are bidding with, you may have to learn additional programs. If you do not have the technical skills to prepare construction job proposals successfully, you may have to take a class or hire a consultant to train you. This increases your costs of doing business.
Project managers often encounter ethical dilemmas in the construction bidding process. One of the most common legal issues in construction bidding is the practice of bid shopping. Bid shopping is when a contractor continues to request bids from subcontractors even after his bid for a project has already been accepted. Although this practice can help you save money, it is illegal in some circumstances. Seek advice from your attorney if you are unsure if bid shopping is allowed in your situation.
Project management considerations
If you plan to submit many construction project bids throughout the course of the year, you will have to refine your project management skills or hire someone to manage your firm’s bids. Because companies and government agencies regularly publish project details, you need to watch for these details, decide which projects to bid on, prepare your bid proposals and ensure the proposals are mailed in a timely manner.
Wise investors and business owners know the importance of construction project bidding when they are looking to expand. As stated above, construction job spending increased by 1.4 percent in early 2011 and is continuing to increase. As a contractor, you can earn a six-figure salary or more in this industry. Offering your construction project to the lowest bidder is a great way to save valuable capital, but don’t underestimate the price of your services. Most construction companies have a bottom line that they will go to if needed, but they never start negotiations near this number. Opening up a bidding lets them know that there are other options and that you will only accept the one that best suits your company’s needs.
Alternatively, construction companies searching for work should look for construction project bidding. The amount of profit that your company stands to make is dictated by your views on the subject. Construction companies just looking to make a living will always win a bidding war against those looking to build wealth. Those looking to build wealth should look to bidding against other like-minded companies. Instead of arguing price, argue quality. Your business stands to gain much more from this approach.
Effective construction project bidding not only requires you to bid on projects. You also must submit proposals, generate reports, visit properties, review blueprints and establish prices. You must also have the foresight to determine a price that is realistic and feasible. This process takes time to learn, but it becomes much easier with practice. Until you establish your business name and reputation, you’ll be placing many bids in order to get jobs. After establishing your reputation, you’ll likely be bidding on large jobs in order to secure larger projects. Many government agencies throughout the world accept bids from construction contractors, so there is virtually no limit to how for you can take your business if you learn and perfect the construction bidding process.
During tough economic times business competition be pretty stiff. This can be especially true in the construction industry. With less capital flowing there are fewer new projects out there. That's why many firms are employing construction bidding resources to help them find good projects to work on.
Online and offline construction bidding resources and services can help you find out about new projects in your area and elsewhere around the company. The truth is that even in economic crunch times there are thousands of new commercial construction reports and bidding opportunities surfacing every month. It's merely a matter of knowing how to find them.
Working with a good construction project service will allow you to search for projects by region, keyword, type of contract, category of project and stage the project is in. By working with such a service you'll get access to plans, specs, schedules and much more.
In the construction business it's a good idea to maintain an edge over the competition. Information and good information technology can help provide you with just that edge. Business.com helps millions of companies connect with providers who furnish them the products and services they require to stay competitive in today's market.