Table of Contents
Using a Pre Bid Evaluation
Some Questions to Consider
Advantages of a Pre-Bid Evaluation
Develop recognizable patterns of success or failure
See trends in your estimating ventures
Contracting in today's economy is at best a challenge, albeit an important one, as new projects and the cashflow attached to them are the lifeblood that sustains a firm's existence. Most estimators and contractors mentally evaluate a prospective project before expending the resources needed to complete an estimate. A question that I regularly ask my contractors is, “Do you remember what you had for dinner two weeks ago Tuesday?” The answer is generally, “No.”
We have so many items in our lives that remembering what we thought even two weeks ago is a gamble. Think about trying to remember what you thought two or more months ago regarding an estimate that you completed for your firm and the odds of success. You simply cannot be certain about what your thoughts were that long ago.
Using a Pre Bid Evaluation
A pre-bid evaluation is a useful tool to help an electrical contractor assess the odds of successful bidding on a project.
My pre-bid evaluation process is set up in a manner where you can review a prospective project's bid documents, complete a job walk and then document what you thought regarding various key items for that project. We ask ourselves sixteen questions. These questions are about the most important items that affect our profitability on a project. Each has four possible answers ranging from extremely desirable to extremely undesirable, each worth a certain number of points. As we are walking back to our vehicle from the job walk, we answer each question based on the information just reviewed.
Some questions we consider include:
- What is the competition on the bid list?
- What is the reputation of the owner?
- What are the environmental conditions like?
- How many bidders are there?
This information will let you know your odds of success, should you decide to expend the resources required to estimate it. With a score of 16 to 30 points, the project is one that you should pursue. A score between 31 and 45 would probably not be a good project to pursue unless you felt you knew something that no other contractor did (but do not kid yourself, this is rarely the case), and a score above 45 is obviously a waste of time. If you still need to proceed with the estimate for political reasons, which does happen, at least you are forewarned to the probability of failure and can handle it accordingly.
Advantages of a Pre-Bid Evaluation
This pre-bid evaluation offers many advantages to us; it may also provide you with similar results. While it may take a few minutes from your busy day to complete, evaluating a project prior to bidding can save you time without being disadvantageous. Beyond the obvious saving of time and potentially money and resources, there are other advantages as well.
See if the project fits your firm's needs
For us, the immediate benefit is that we get to see from an unbiased viewpoint if a project fits our firm's needs. When we are successful and awarded a project, often we wonder in the middle of it why we ever got involved. We are able to return to the evaluation that was completed and see why we were interested in the first place. We can either recharge our focus and get back on track or, based on the project's actual results, change some of our scoring for future bid opportunities. This will do nothing to help with the problem on the existing project, however, other than to perhaps stress the point that your management processes should be diligently followed on it, and likewise on all projects.
Develop recognizable patterns of success or failure
Another benefit of the pre-bid evaluation for us is that after a short amount of time, you will have evaluated many similar projects for many different clients. Because of these evaluations, you may begin to see a pattern of success from some clients, and continued effort for others with no return on your investment. This information is invaluable to you. As trends will develop, you will want to use these successful contacts while reviewing the wisdom of continued effort with clients that never seem to want to work with your firm.
See trends in your estimating ventures
In a short amount of time you will begin to see trends in your estimating efforts that bear more success from particular types of projects and different general contractors. You will also see those areas that have seen little to no success. These are indicators that need to be addressed and utilized when positive, or repaired when negative.