The Difference Between a Good Commercial Construction Estimate and a Winning Bid

According to the Construction Management Association of America, commercial construction estimators are having a really fruitful bidding year if they’re winning 1 out of every 10 bids.

However, in our current competitive landscape, it’s far more common for an estimator to win 1 job out of every 25-35 bids than it is for them to hit the magical bid ratio split.

Now, there are some deciding factors that’re out of an estimator’s control, like an owner’s personal preference, however when it comes to the estimate itself, construction estimators reign supreme and that’s where they should focus a lot of their energy.

A strong commercial construction estimate that’s accurate and detailed will stand out against submissions that offer flimsy material counts and patchy timelines. But there are also a variety of other considerations that, when applied, really separate the decent proposals from the strongest options.

In this article, we’ll detail exactly what makes a winning estimate and offer ways to elevate reasonable bids to bon fide winners.

Include Commercial Client References

More often than not, a project owner will request references, but they aren’t typically mandated.

Regardless, it’s best practice to provide some type of testimonial from professionals who can speak towards the quality of your work and the efficiency of your team.

Whether it’s a signed-off written piece from a client who had a great experience with your construction company, or the contact information of a different owner who can attest to your legitimacy as a productive business, people trust people and a positive reputation can be a separator.

Let History Speak for Itself

This one will be a little more difficult for newer construction businesses, but if you have the resume to show you do good work, on time and on budget, then let that shine.

A few specific types of jobs a project owner will look for include:

• Past work that’s identical (or nearly) to the current proposed project
• Similar jobs that were larger in scope
• A list of projects completed at the same time

By presenting these previous successes, you’re demonstrating you can handle big workloads, are comfortable with multi-tasking and are well-versed in the type of work the owner is requesting.

Plan for Contingencies

As the classic adage goes, failing to plan is planning to fail. And it very much rings true in commercial construction.

Sure, you can be confident in your measurements and your counts and your lists. However, if you don’t consider outside factors, then you’re not only risking the budget and the schedule, but you’re also showing the project owner an aversion to preparedness.

There should always be some unassigned portion of the bid that’s relegated to the emergency fund. Some considerable contingencies include:

• Geographical weather (ie. hurricane season, earthquake risks etc.)
• Fluctuating supplier markets
• Labor shortages or union strikes
• Illnesses and injuries

You can’t prevent some of these things from happening, but if you map out procedures in the bid, you’re letting the owner know that you’re ready for whatever unexpected circumstances arise.

Keep a Tight Schedule

Unless the project calls for something super flexible, be firm and confident in the timeline you spec out.

Project owners are not looking for a job that could go months past their goals, at least not upfront. There is a recognition that delays may occur, but to start off guaranteeing delays is not a strong showing.

And as you finish projects within appropriate schedules, keep those at the top of your resume so future prospects can see just how effective you are at getting the job done.

Always Account for Safety

In this industry filled with workers’ compensation payments and OSHA requirements, safety has become as essential to a successful project as detailed job costing.

Construction project owners are looking for construction companies that boast low TRIR scores and, if possible, even lower incident reports.

Being able to produce an audit trail of favorable jobsite inspections, up to date certifications and detailed safety plans is key if estimators are trying to establish differentiators.

Communicate Frequently

Accessibility is a necessity. Project owners need to know they can easily make contact whenever it’s required. They also expect construction businesses to be open and honest in their reporting of milestones or delays.

Start the entire bidding process on the right foot. Ask questions, be helpful, respond in a professional manner at appropriate intervals. And ensure there is a single source of truth for the owner to turn to. Whether it’s one big email chain or a shared dashboard in a project management tool, keep everyone in one conversation.

Too many silos can lead to lots of misinformation.

Show Off Stability

Consider this your collateral. Whether it’s a positive cash flow statement, a healthy balance sheet, a high credit rating or a solid backlog, construction owners are looking for companies that are steady and reliable.

They need to know that if project costs go over budget, the contracted business can cover these overruns. They’re looking for crews that are paid on time and not on the verge of striking because of missed paychecks.

Above all, they want to know that you’re good with money. You know how to keep your own margins protected and therefore can keep within the limits of the project you’re completing.

Use Construction Estimating Software

One of the more obvious ways to create competitive bids is to make sure they’re accurate.

And by using technology like construction estimating software, not only are you producing estimates faster but you’re also eliminating common manual errors like double entry and miscalculation.

Estimating and takeoff software handles both the quantitative and qualitative aspects of bidding for you.

The software will take the measurements of the blueprints and determine all the required counts. Then, as the material lists are built, the estimating solution will offer up different supplier pricing for each type of resource.

Once you choose the preferred vendors, the prices are applied, and the overall estimating total is set automatically — without any by-hand math necessary.

Because everything is precisely measured down to the last inch, the risk of over or under estimation is greatly reduced.

Another hidden gem of estimating software is that you can generate more estimates. Not only are your new bids better detailed, but you’re producing them at a quicker rate so jobs that pop up as you’re building a different proposal can still be considered.

Create Winning Bids With McCormick

The money is in the details. If you want to improve your bidding ratio, you need to adjust how you approach building your commercial construction estimate. 

Include information that will really showcase:

• Your ability to plan and manage
• Your skills at budgeting
• Your priority of safety
• Your past successes

Collectively, these documents build a strong foundation that boost your reputation and really defend your submitted estimate.

To ensure your numbers are accurate, implement construction estimating and takeoff software, like McCormick.

McCormick is built for the electrical, plumbing and mechanical trades and offers trade-specific databases for all their users.

With change order management and built-in takeoff, McCormick is fast and efficient so you can bid and win as many jobs as desired.

For more information, chat with a specialist.