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Top 3 Challenges Experienced by GCs During The Bid Management Process & How to Beat Them

November 17, 2017 | By SmartBid | Industry Highlights

The invitation to bid management process can be a stressful time for general contractors. Before breaking ground on any construction site, hours of work go into searching and selecting qualified subcontractors for the project. This year, the team at SmartBid, sent out a Bidding Statistics and Trends Survey with the goal of identifying exactly what makes the bidding phase difficult, and how these issues can be resolved, to help our clients start and win more jobs. Using the survey results, we’ve identified the top three challenges experienced by general contractors during the construction invitation to bid management phase and the ways to overcome them…because you deserve a simple bid process. 

Challenge #1: Low Construction Project Bid Coverage 

Out of the GCs we surveyed, 24% listed bid coverage as their biggest challenge with their bid management process. The comment section included mentions of disorganized subcontractor databases, and that subs are unwilling to include important company/project history information during the bidding phase. 

How To Increase Your Job Bid Coverage 

Utilize global subcontractor databases, such as SmartInsight (it’s FREE), which contains thousands of subcontractors to choose from and segment based on your project qualifications –  areas of work, trade codes, project type, certifications and more. SmartBid, the #1 construction bidding software, is actually connected to the SmartInsight sub database, and allows you to search for subs within the bid management system when sending out ITB’s. (Did we mention subs love it?) Google Search can also be utilized as well to search for subs, however you won’t be able to narrow down your search qualifications as much as you can by using a dedicated construction industry database like SmartInsight. Subcontractors want to be found as much as you want to find them – it’s just a matter of meeting up at the right place and right time.

Challenge #2: Low Subcontractor Response Rate

20% of the survey participants said that their #1 challenge is getting subcontractors to respond to bid invitations. In fact, without a construction bidding software to help the preconstruction process, 45% of those surveyed referenced they had to make many follow up calls in an attempt to get subcontractor responses. As one participant put it, this process is “time consuming and frustrating.”  

How You Can Increase Subcontractor Bid Response Rates 

There are multiple steps you can take to improve your subcontractor bid responses. First, ensure that your invitations to bid are being formatted correctly to reach a sub’s inbox, subcontractor’s don’t want to be forwarded a 150mb file with 200 drawings in it when they really only need 3 drawings pertaining to their trade codes. Construction bidding software, like SmartBid, provides verified email templates that avoid spam filters and monitor activity as subs receive, open and download bid information, so you can narrow in on WHO to follow up with. Second, make sure your sub/vendor database is cleaned up to give you the most optimal options in every trade. “Your Sub” is going to continue to get busier. If they are your sub, they’re probably someone else’s sub as well, so making sure you have multiple options for a single trade will increase the likelihood you will receive a bid. Finally, getting a bid management software will automatically help with both of the items mentioned above, allowing you to spend less time reaching out to subs and more time qualifying their bids. In fact, according to our survey subcontractors are 14% more likely to respond to a bid if prompted to do so using a construction bidding software that makes it as easy as selecting yes or no.    

Challenge #3: Too Much Time Spent on Bidding Phase 

Time to bid includes the amount of physical man hours that go into sending out the first round of invitations to bid on a construction project. Of the GCs we surveyed, 53% said that they spend at least 3 hours sending out just the first bid when they do not implement a construction bidding software, like SmartBid. Even more frustrating, 24% spend 5 or more hours sending out their first round of invitations to bid on a project. In an industry where timing is everything, these hours have a real impact on the efficiency of a project, as well as winning the project. 

How You Can Lower Your Time Spent On The Bid Management Process 

By utilizing a software like SmartBid, 86% of general contractors were able to drop the time spent on getting their first bid out to 2 hours or less. When centralizing bid information and monitoring subcontractor communications, GCs are able to bypass the tedious work of implementing manually. The “done by hand” ways of managing construction bids, such as excel spreadsheets, are quickly fading as more and more companies integrate technology software into their preconstruction process and see an increase in their company ROI.  

If you’re a general contractor experiencing the above issues, we can help! See how SmartBid, the #1 construction bidding software for GCs, can help you not only fix these problems, but also increase ROI on your preconstruction process – request your free demo today!  

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