Most people don’t realize that there are actually 5 common mistakes that contract administrators make when calling bids. These mistakes can end up costing your company time and money if they aren’t avoided.
If you’re a contract administrator responsible for calling bids, whether it’s for your clients or your own firm, it can be tough to know what to do and how to do it. You want to make sure you get the best prices possible, but you also don’t want to make any mistakes that could cost your contract admin team time and frustrations down the line.
If you prefer to watch the video version, here it is:
In landscape architecture and civil engineering, a tremendous amount of time goes into preparing the project documents. I’m referring to all your drawings, details and specifications that you and your team have put together. You’ve spent hours meticulously combing through all of the minute details in order to ensure a successful project delivery, and now you’re ready to collect bids and select a contractor. Don’t skip out on these 5 critical tips during this process.
My goal for this blog is to show you ways to make the bidding process as efficient and as smooth as possible. By the end of the article, you will be collecting the most comparable and accurate bids to save your firm hours of time and prevent costly mistakes. On top of that, if you conduct a great bidding process, you will also minimize conflicts during the entire construction phase of the project.
Here are the 5 mistakes contract administrator make when calling bids:
Mistake #1: Not sending out an itemized bid form or schedule of prices.
If there was one thing I highly recommend, it would be to clearly define the scope of work you are expecting the bidders to price item by item, line by line. This includes providing quantities and units for each item. You could put the onus on the contractor to analyze all the grades, the specifications and details and have them provide lump sum pricing but you are setting yourself up for potential conflict.
Time and time again, I’ve been involved in bids that require the bidders to do their own take offs and the feedback I get is that the bids are all over the place. Contractor A forgot to include all the hardscape works and contractor B forgot to include rough grading and removals offsite. How are you supposed to compare contractor’s prices if they’re all pricing different scopes? Yeah.
In this situation, the lowest bidder is almost guaranteed to have missed part of the scope and if you award them the contract, they will most likely be asking you for some type of extra in the future when they realize something was missed.
Utilize unit price contracts and provide a detailed schedule of prices with quantities in order to collect bids that are TRULY Comparable.
Mistake #2: Accepting altered or incomplete bids.
Even if you’re sending out a schedule of prices for bidders to fill out, it’s quite common for bidders to edit certain things on the bid form, whether it’s units or quantities to make the bidding process as convenient for them as possible. While it might be tempting to accommodate your contractors, it’s best to nip this behavior in the bud. You don’t want your bid review process to be more complicated than it already is. Some ways contract administrators calling bids can prevent this include:
- Rejecting these bids outright. The bidders will learn their lesson and hopefully the next time they submit a bid, it will be complete.
- You could also issue a post-bid addendum to confirm that these items need to be priced a certain way then allow all bidders to resubmit.
- Lastly, you could also use a program that doesn’t allow bidders to submit incomplete bids in the first place, as well as change the units or quantities at all. But more on that later.
Mistake #3: Not conducting a bidder’s meeting.
How many times have you heard the following? “Oh, I didn’t include that in my price.” or thought “You submitted a bid without visiting the site?”
Yeah… you need to conduct a mandatory bidders meeting. It does 2 things, it ensures bidders are serious about bidding the work, and it ensures they are all aware of current site conditions as well as anything else worth mentioning during the meeting. Is there a specific access point? A critical timeline? Certain client expectations? Anything unusual about the project that will likely impact the price? All these need to be discussed in the meeting. A pro tip is make sure to call the bidders to guarantee they know about the meeting or send them a calendar invite a week before. Good contractors are busy and unfortunately might not catch your email in time.
It’s important to confirm whether the meeting is mandatory or not, and stick to your guns. If some contractors don’t show up, don’t allow them to submit. But ultimately, your goal is to get all the bidders out to the site so that they fully understand the scope of work they are pricing. This is a critical strategy to minimize conflicts during the construction phase.
Here is an interesting article that elaborates on the pre-bid meeting.
Mistake #4: Not getting prices for Provisional Items.
Extras happen and you should be best prepared for them. This can be done by requesting time and material prices for commonly used items during the bidding process. Suppose you’re working with a contractor and you didn’t get provisional pricing, and the schedule of prices also doesn’t include any dewatering. When you get a quote from your contractor, it comes back at twice the rate you were expecting.
Now you have to negotiate with the contractor over every single item; and you’ve lost the advantage of the competitive bidding process.
Use the competitive bidding process to your advantage and agree to as much pricing as possible before the project starts. This streamlines your change order process and minimizes your overall stress and worry that the contractor will take advantage. You could even develop a standard list of provisional items that you use for every project, that way you are covered for most situations.
Start with a commonly used list of equipment or tradesperson, then add from there. Just make sure you’re getting those rates during the bidding process.
“… the real value is not having to manually fill out your own bid review spreadsheet.”
Mistake #5: Conducting the entire bid process manually.
If you’re a contract administrator calling bids and it’s taking you way too much time, you need to consider a bid management platform like ContractComplete. During the bidding process, you can easily track bidder engagement from start to finish.
For example: will they even submit a bid? Have they read the project documents or downloaded the drawings? Did they request any clarifications or ask a question? Have they acknowledged the addenda?
These are all really useful things to know in order to ensure your clients are getting enough bids by engaged and interested contractors. Now, that’s a nice added benefit but the real value is not having to manually fill out your own bid review spreadsheet. ContractComplete does this automatically after the bid closes saving you and your team hours of manual data entry!
Jason in Colorado says he saved his firm $5,000 from his first 3 bids alone.
ContractComplete also has the ability to prevent bidders from submitting incomplete bids, thus ensuring 100% compliance.
The system then generates an Excel or PDF version of all the bids instantly, allowing you and your clients to compare them line by line immediately once the deadline passes.
Start saving time by automating your bid process and making it as convenient and simple as possible for you, your team AND… your bidders.
Let’s recap:
- Utilize unit price contracts and provide a detailed schedule of prices in order to collect bids that are TRULY Comparable.
- Don’t accept altered or incomplete bids. Be strict or use a system that prevents bidders from submitting a bid until every item is filled out.
- Conduct a bidder’s meeting and get everyone on the same wavelength.
- Collect provisional time and material pricing to minimize price gouging later.
- Automate your bidding and bid review process today to save your team time and frustrations during the construction phase.
If you’d like to see a demo visit contractcomplete.com for more information.
Ask about how you could get 75% off your first 3 months! Start today and send your first bid out within 45 minutes.
