The main purpose of the estimate is to allow the contractor to enter into a contractual agreement with confidence. The estimate must be accurate, organized, and complete. To make that happen, it takes time and an experienced estimator. Rushed takeoffs, crunching numbers, and not enough time to properly estimate a project will not create confidence on bid day.
When a bid is rejected because it is not delivered on time, the contractor must ask, “Why?” Delivering a timely bid starts long before the bid due date arrives. Valuable estimating time is wasted when the contractor does not have a good process and organizational structure to keep the estimating department functioning efficiently.
It is detrimental to the contractor to constantly miss bids dates. Without proper planning — and having the right resources — valuable estimating resources are wasted.
Let us consider these factors that allow the contractor to produce a quality bid and submit it in an organized and timely manner. The following are some reasons that a bid is not produced and submitted in timely manner:
- Lack of sufficient experienced estimators. Trying to bid too many projects with too few estimators is unwise. Every contractor must manage and balance a proper workload for their estimating team. Overloading an employee is not considered the best process. This will cause a decline in quality work. It is better to produce four quality bids in a month than 10 bids that are rushed and not properly estimated due to time constraints.
- Insufficient time for the estimator to complete the estimate. Especially in smaller companies, an estimator may also function as a project manager. Balancing the roles of estimator and project manager can be challenging. Depending on bid due dates, project meetings, and coordination of material and labor, an employee will be challenged to perform well in all responsibilities.
- Underestimating the required time to complete the estimate. When an estimator is given a project, one of the first tasks should be to determine how much estimating time will be necessary to properly quantify and produce a detailed bid summary. The main reason for this is to communicate to his or her boss that assistance will be needed. This will also help in scheduling other responsibilities and obligations. Accurately estimating the time required to complete a project is a valuable skill.
- Having the right experienced, skilled estimator matched to the type of project being bid. For example, when estimating a water treatment plant, there will be a learning curve that may require the estimator to perform some research into understanding materials and specific requirements of this type of project. Becoming a skilled estimator not only requires time, but it also requires being exposed to various types of projects. As an estimator gains experience with a particular type of project, his or her experience will produce an estimate efficiently.
- Not providing the best estimating tools. Estimating with pencil and paper is from a different era. Yet, some contractors are still estimating with this outdated method today. Most responsibilities we have today involve the use of software. There are many software choices available to contractors for increasing estimating efficiency. Providing the best software and electronic methods for employees is especially important to finish the work in a timely manner.
- Unhealthy company atmosphere and culture. Company management must provide employees a quality work environment. Tension, stress, and contention between workers and superiors will reduce employee productivity. In some offices, the “open cubicle” arrangement can be distracting. An office where the door can be closed will provide the estimator with a workspace free from most office distractions.
- Failure to prioritize projects to be estimated. Not every project out for bid is worthy of your attention. You must bid the best projects that you have the greatest odds of winning and making a profit. If 10 or more contractors are bidding the same project, your chances are lessened to be a low bidder. Focus on projects that are best suited for your company’s performance and profitability.
- Failure to prepare necessary bid documents several days before the bid date. Most projects require multiple bidding documents. Most federal and municipal projects will require the contractor to submit a bid bond. Other documents that may be required include an experience statement, list of subcontractors, and list of major equipment suppliers. Multiple copies of the bid may be required. Some projects also require unit prices. For example, an owner may request unit prices for a switch, receptacle, or fire alarm smoke detector. These prices include all material, labor, expenses, and overhead/profit. Most of these documents can be prepared a day or two before.
Final Thoughts
Bid day should not be a rushed frenzy. If it is, mistakes and omissions are sure to occur. Preparation for a great bid day starts days — if not weeks — before the actual bid must be submitted. Find the right estimator for the project, and allow him or her enough time to properly estimate the project. Every contractor must strive to provide their employees an excellent work environment with the best tools that will allow for maximum efficiency and productivity. There is no need to be rushed on bid day filling out certain bid documents, when these should and could have been completed days before.
Hoping for an extension of the bid date is not always the answer, although this may be helpful in some cases. If the contractor is constantly asking for or hoping that the bid date will be extended, that is a sign of more structural problems within the company.
If there is anything that the contractor should have on bid day, it is confidence that the estimator has produced a quality estimate that will allow the contractor to enter into a contractual agreement and that, if awarded the project, the company will have the opportunity to generate a profit. After all, a company should be in business to make a profit, not just submit bids.
Don Kiper is an independent electrical estimating trainer and consultant based in Niagara Falls, N.Y. He can be reached at [email protected].
