For a long time, it was always assumed that the best way to win a construction contract was to generate a proposal that quotes the lowest possible cost. This strategy may have worked in the past, but there is certainly a limit as to how low you can bid, especially as bidding becomes more competitive.
But what if there was another way to win more construction contracts without compromising quality or making a lower bid? Here, we discuss how to augment your chances of securing construction contracts.
Why should you avoid proposing low bids?
To start, it is not true that the lowest bid always wins the tender. The selection committee evaluates other factors such as technical expertise, experience, and financial strength. In some cases, lower bids create an impression that the project would not be completed to certain standards. Therefore, when making your bid, ensure that you reference your prior successes with other similar projects.
Low bids have limited buffering room
Another reason why you should avoid low bids is that they do not give you enough wiggle room in case of an externality. You might believe that your costing is accurate and will help you win the contract, but if inflation occurs, you will be ill-prepared to handle it.
If you are working on a large construction project that will take two or more years to complete, you need a certain amount of buffering space. This way, even if the cost of materials increases by 8% for example, you will still be able to complete the construction project.
You will be forced to cheat
If your bidding strategy is based on the fact that you have to be the lowest bidder, then the pressure to win might force you to cheat. For instance, you may hide some costs hoping to find a way to recover them in the future. This strategy might backfire on you as the client may decide to take you to court.
If this happens, you will only spoil your reputation, and no client will want to work with you in the future. So how do you win more construction contracts without putting forward unrealistic proposals?
6 Tips for Winning More Construction Contracts
1. Embrace technology
If you are going to win more construction contracts, you must embrace technology. Gone are the days when you had to spend hours in front of a computer, pining over the best option or alternative for a project. These days, this kind of work can be done for you using an AI-based general contractor software such as ALICE.
This AI-powered construction optioneering platform is designed to help with your scheduling and planning needs. It can be used to plan solutions for residential, commercial, and industrial projects. In addition, this software leverages BIM technology.
2. Find your niche
If you are the type of construction company that bids for every project they come across, you need to rethink your strategy. To win more construction contracts, you need to find a niche where you are comfortable operating. Construction companies specializing in a given niche tend to have more profitable margins because they can charge more and are more efficient.
In addition, niche marketing is easier because you can channel your marketing budget into platforms that target specific customers. As a result, you enhance your chances of winning more contracts.
3. Get out of the office
If you want to win more construction contracts, you have to start networking. You need to identify potential clients to target. If you are using technology, this becomes easier for you because it will be easier to impress your clients. If you are a general residential contractor, you can target realtors because they always build houses.
If you are a subcontractor, you need to send your profile to potential clients such as malls and universities. Let these establishments know that they can always count on you if they require help with their painting or masonry needs.
4. Network with decision-makers
It is important to use platforms such as LinkedIn to engage with decision-makers of companies that you want to work with. Send them an invite and start a casual conversation on subjects that interest them. When you are comfortable with each other, you can let your connections know that you are a contractor and are open to opportunities. If you are building your relationship, do not shy away from sharing your work history and profile of past performance.
5. Be adaptive
To win more projects, you have to be willing to shift focus when necessity demands it. Adaptive contractors tend to win more projects because they can easily manage their operations from one niche to another.
A good example of this is what was witnessed during the COVID-19 pandemic. There was a decline in demand for commercial contractors but an increase in demand for residential contractors. The adaptive contractors shifted their operations from commercial to residential construction. Those who did not shift their operations faced reduced demand for their services.
6. Play the numbers game
The numbers game is as so; the more you bid, the higher your chances of winning a contract. What you need to be wary of is matching the number of your bids with their quality. To ensure that they are quality bids, take the time to ensure costings are accurate, with enough wiggle room in case of inflation.
Lastly, you will win more bids if you deliver quality work. If you impress your clients, they will refer you to their friends, which will help you win more work. Remember, quality is key!
