Technology & Tendering

Construction businesses are predominantly project based, meaning that they live or die by the success of the projects they win and deliver. The approach to tendering and winning work is fundamental to the success and growth of the business. But in an increasingly competitive market, bidding can start to diminish into a contest in producing the lowest costs.

Engaging in aggressive bidding wars based upon costs is a race to the bottom, and can result in a company winning a contract and being legally required to complete it for a price far below its worth. ‘Going in low’ can result in businesses winning lots of contracts very quickly, but suffering heavy losses that can be toxic and detrimental to the whole business. This mistake was a key factor in the downfall of Carillion.

Tendering for projects is not usually legally binding, but each tender is an expensive process and can take up a lot of key resources, especially when you are a small business. It is therefore crucial that businesses make the work winning process as selective and as efficient as possible.

Using Technology In Your Bids

Contractors should use technology to make sure that they are bidding in the most effective way. You can start by making sure that you have the most up-to-date construction bidding software. Such software helps firms to:

• Keep track of project budgets
• Compare budgets from different projects
• Analyze changes in costs of supplies
• Create professional looking reports based on research

Use Data

Experience is key when working in infrastructure. When estimating your costs for a project it is invaluable to have the knowledge of what has gone wrong before, what went well and how it could be improved. However, getting this experience out of an individual's mind and into a wider organisations’ conscious processes can be difficult.

That is where data is crucial. It doesn’t replace experience, but it does provide useful context. Having your data in the right format, so that you can easily analyse current and previous projects at the right level of detail is pivotal in using previous project information to your competitive advantage. 

Having the discipline and tools in place for your teams to understand exact activity costs, programme outputs and resource requirements will allow your experienced team to build on real life data and provide a more robust, reliable estimate for your tender.

Using technology to link site events and outputs with planning and accounting software is key to giving you the benchmark information required.

Knowing your data reduces risk and allows you to be confidently competitive.

Understand The Supply Chain

In-house expertise is expensive and often unnecessary. Instead, building a supply chain ecosystem of niche specialisms is more valuable and cost effective. Fostering long term supply chain engagement and bringing them on board with your business and operational processes allows Contractors to provide tender proposals which are not only of higher quality but also more reliable and cost effective for the end Client. 

This relationship requires understanding and effort to perfect. Ensuring that your suppliers, regardless of trade. are aligned with your business processes and technology makes winning and delivering projects a far more efficient end-to-end process. Use your CRM, cost management software and planning tools to your advantage, allow access and integrations with your supply chain to remove ‘man marking’, duplication and provide a more efficient project management offering to your client. 

Promote Innovation

Fostering innovation allows companies to solve problems more easily, to increase productivity, stand out from the crowd and ultimately beat the competition.

The predominant client in the UK, Network Rail, encourages suppliers and stakeholders to proactively challenge industry standards to increase innovation and creativity and to reduce cost. This challenge statement is present in all Principal Contractors’ tenders and cascades through the supply chain. 

Innovation should not just be seen as a box to tick, to satisfy a tender criteria but instead a way of setting your tender apart from the competition. Ultimately, it should drive value for both the Contractor and the Client.

Providing an alternative to the norm that will offer greater certainty on programme and cost, or simply satisfy a stakeholder query will allow your bid to stand out from the crowd. This may be a new product that will reduce access requirements, or simply a digital solution to communicate work progress.

In conclusion, the construction industry is a highly competitive market where project success is crucial to the growth and survival of a business. However, bidding wars based on low costs can lead to severe losses and the downfall of a company.

To improve their chances of winning bids and delivering successful projects, contractors should utilize technology in their bidding process, gather and analyze data from previous projects, build strong relationships with their supply chain, and promote innovation.

By taking a thoughtful approach to bidding, contractors can impress clients, save costs, and ensure the long-term success of their business.

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