How to Submit Competitive Construction Proposals and Win More Bids
A well-made competitive construction proposal can be a great sales tool for your construction company. Competitive proposals help you convince potential clients that your construction firm is perfect for the job’s scope.
Not only will it help you stand out among hundreds of other bidders and construction firms. Proposals can also help you avoid conflict later on by incorporating accurate information and clear project scope.
In this article, we’ll highlight the importance of competitive proposals, as well as some of the strategies to build one, such as using AI takeoff software to perform fast and accurate takeoffs.
Keep reading if you’re ready to build competitive proposals that will help you win more bids.
4 Key Benefits of Competitive Proposals
Below are some of the benefits that competitive proposals can bring you and your firm.
1. Win More Bids
Construction projects, especially large-scale ones, will involve a significant investment. Clients are likely to choose proposals with the best value for their money. Notice how I didn’t say “cheap” but instead highlighted “best value.”
Offering the cheapest price not only risks your profitability as a firm, but also positions your low bid as unrealistic, risky, or indicative of poor quality. Additionally, the owner may have other criteria besides the price, such as quality, relevancy of experience, reputation, and innovation.
By submitting a competitive proposal that outlines a cost-effective approach, you demonstrate your value proposition and competitive advantage over other bidders. It also builds trust and credibility with the project owners by showing you understand their needs and can deliver quality results. You do this by optimizing your resources and minimizing risks and wastages, ultimately helping you win the bid.
2. Build Your Firm’s Reputation
Winning large-scale construction bids can be a game changer for your firm. Winning a bid shows that you and your team are capable of taking on complex projects, such as hospitals, hotels, and skyscrapers, on time and within budget. It can also help you attract new clients and partners who are impressed by your company’s work.
3. Increase Profitability
Your construction company can earn high profits by winning a construction bid, especially for large-scale projects. A successful bid can help you secure a consistent source of work and income for a long period, ensuring your company’s financial stability.
Furthermore, a competitive proposal that outlines a cost-effective approach can help your company use its resources efficiently and reduce its risks and costs, resulting in higher profit margins. With a profitable project, you can also improve your reputation and brand image, attracting more clients and opportunities in the future.
4. Build More Experience
A construction company can gain experience in bidding for large-scale projects by submitting competitive proposals. This experience can be useful in future bids, providing insights into the bidding process, helping to improve proposal strategies, and identifying areas for improvement.
Moreover, a competitive proposal that outlines a cost-effective approach can help the company display its skills and capabilities, demonstrating its ability to deliver quality results within budget and schedule. Once you’ve won the bid, you can use this new project to enhance your team’s skills by exposing the company to different types of projects and challenges.
Leverage this new project to expand your network and opportunities by networking with clients, subcontractors, suppliers, and other stakeholders. You can use this potentially successful project to strengthen your company’s portfolio and credentials, increasing its chances of winning more bids in the future.
8 Strategies for Submitting Competitive Proposals
Below are some of the strategies that can help you submit competitive proposals:
1. Select the Right Projects to Bid
It takes months and thousands of dollars to prepare a proposal. Thus, it’s important to be selective on which projects to respond to based on the likelihood of success. To scrutinize a Request for Proposal or RFP, gain an understanding of the scope of work and evaluate the following points:
- Is the scope of work manageable and in line with past projects?
- Will the project yield an acceptable profit?
If the answer is no, then it’s probably not worth it. Move on to the next potential project, as putting together a competitive proposal will require plenty of time and financial resources.
2. Attend Pre-Bid Meetings and Visit the Site
Attend pre-construction meetings to clarify any doubts or concerns involving the project specifications and scope of work. It also provides a chance to get more details from project owners, architects, engineers, and other stakeholders.
Other advantages of doing so include:
- Getting a better understanding of project requirements and challenges by assessing the location, site accessibility, and other factors that may affect work.
- Seeing the actual conditions of the site and determining how it affects the costs based on drainage, soil access, presence of asbestos, or adjacent buildings.
- Identifying potential risks or opportunities that may arise during project execution such as design changes, site safety, environmental issues, or value engineering.
- If the pre-bid meeting is required, then attending it prevents you from being disqualified from the budding process.
- Lastly, it can be a great opportunity to network and promote your business with potential clients, partners, suppliers, and subcontractors by exchanging business cards and other information.
3. Leverage Technology to Streamline the Preconstruction Process
Using construction software to streamline the preconstruction process is crucial for general contractors who want to win more bids. This approach can help contractors:
Enhance Collaboration, Speed, and Accuracy
Westphal & Co. used to rely on fragmented spreadsheets and emails to communicate across the organization, which resulted in slow productivity and costly mistakes. With the help of Procore, a construction management software, they were able to help improve their field-to-office collaboration.
Another example is AI takeoff software, Togal.AI. With this advanced pre-construction technology backed by AI and machine learning, not only can you complete takeoffs in just under a minute with up to 98% accuracy. You can also leverage cloud-based collaboration to simultaneously work with multiple team members on any device, anytime and anywhere, as long as there’s internet access.
Time and Money Savings
Before using AI estimating and takeoff software Togal.AI, the Coastal Construction team spent about 50% of their time manually tracing, clicking, and dragging lines on a set of drawings to perform takeoff using on-premise software. This limits the number of bids they can participate in and even lengthen the time needed to complete a competitive proposal.
But ever since leveraging Togal.AI to streamline their pre-construction process, they were able to save 14.5 hours per plan set, 1,160 hours per month, and 13,920 hours per year. Furthermore, they averaged a total of 10 bids per month. In just the first year, they were able to save a total of ~$1 million using Togal.
If you want to learn how much you can save using AI takeoff software Togal, along with the potential additional bids and new revenue, check out our custom calculator. It’s designed to show your potential ROI with Togal.AI.
Focus on Value-Generating Activities
Construction solutions such as AI takeoff software, Togal.AI, can offer unmatched efficiency. With its help, you can automate repetitive tasks and shift your focus towards value-generating activities such as scoping, value engineering, and identifying the right trade partners - helping you craft a truly competitive proposal that stands out.
To learn more about various software solutions available to streamline the preconstruction process, read our article on the top 10 construction software used by general contractors.
4. Use Takeoff Calculators to Avoid Calculation Errors
Calculation errors can lead to costly mistakes that put the project timeline at risk. Once project owners detect calculation errors in your proposal, your construction firm quickly loses credibility. Consequently, you will lose the bid.
Takeoff calculators help contractors avoid such errors by:
- Automating the calculation process.
- Reducing errors due to manual calculations.
- Enabling estimators to perform calculations quickly, which allows them to submit proposals faster.
Below are some of the calculators that you can take advantage of:
5. Carefully Evaluate Subcontractors and Their Pricing
It’s crucial to evaluate subcontractors meticulously as they affect the quality, cost, and timeline of the project. By using the criteria below, you can make sure subcontractors are qualified, reliable, and ideal for your project.
Compare different subcontractor bids using the criteria below, negotiate for the best price, and minimize the risk of delays, defects, and disputes.
Once you’ve determined trusted subcontractors who can deliver high-quality work within budget and on time, aim to build long-term relationships.
6. Highlight the Following Factors In Your Proposal
Even if you submit your proposal, the project will only be awarded to one general contractor. Some of the factors that will influence the project owner’s decision on who to partner with are as follows:
- Estimated Costs
Make sure you’ve accounted for the entire scope and suggested the most cost-effective approach. Ensure you’ve performed accurate takeoffs and assigned the prices while accounting for the location and inflation.
You can also include documents that can justify the pricing presented, so the project owners can use them as references. This includes case studies, track records, and management plans.
- Track Record and Experience on Similar Projects
Next, the project owner will look at your firm’s previous projects as an example of the work to be provided. When you have experience on similar projects, it gives project owners the impression of minimal risk and the likelihood of completing the scope by the timeline and budget provided.
7. Incorporate Branding
Unless the project owner assigned strict format requirements for the proposal that you will submit, incorporate branding as much as you can.
- Use your company logo, color scheme, and font on the cover page and throughout the document.
- Introduce your company briefly and explain its background, vision, and objectives.
- Show evidence of your past success by including feedback, recommendations, or examples of similar projects that you have done well.
- Explain how your proposed solutions, methods, and techniques are suitable for the client’s project and meet their requirements and expectations.
- Demonstrate your competence, credentials, and experience in the construction industry.
- Give a detailed and transparent overview of your project budget, timeline, and deliverables.
8. Ensure Complete Bid Forms and Requirements
Providing complete bid forms and requirement demonstrate your professionalism and meticulousness as a general contractor and will improve your chances of winning the bid. It also enables you to submit your bid in a clear format that aligns with the project owner’s expectations and specifications. Doing so facilitates their comparison and evaluation of different bids.
Do the following to ensure the submission of complete bid forms and requirements:
- Review the bid solicitation carefully to identify all the requirements, specifications, drawings, and other documents provided by the owner.
- Follow the instructions and guidelines given by the owner or the project delivery method on how to prepare and submit your bid.
- Create a checklist of the requirements to make sure you don’t miss anything. A checklist can help you check and verify your bid for mistakes and inconsistencies that could cause disputes or rejections later on.
- Use a standard bid form template or create your own based on past similar projects or industry best practices.
9. Use a Construction Proposal Template
Using a template can cut the time needed to build a proposal from scratch. It prevents the mistake of omitting any crucial information or document that the project owner or delivery method demands, such as bonds, insurance, licenses, and references.
Below is a sample construction proposal template from Project Manager:
Source: Project Manager
Submit Accurate Cost Estimates and Competitive Proposals with Togal.AI
Submitting competitive construction proposals is crucial to winning bids, building your firm's reputation, increasing profitability, and gaining experience in bidding for large-scale projects.
Some of the strategies that can help you build a competitive proposal include selecting the right projects to bid on, attending pre-bid meetings and site visits, and leveraging technology to streamline the preconstruction process.
One of the technologies you can leverage includes AI estimating software, Togal.AI. With Togal.AI, you can complete the takeoff process with up to 98% accuracy in just under a minute, enabling you to focus on value-generating activities, choosing the right trade partners, and other strategies that can help you craft a competitive proposal.
Explore how Togal.AI can streamline the takeoff construction process. Try Togal, book a custom demo, or get Togal.AI today.