7 Bid Blunders Construction Firms Don’t Want to Make
If you want to own a successful construction firm, you may be interested in getting involved with lucrative government projects. Of course, you’ll need to participate in a sealed bidding process if you elect to go this route. Success in a bid competition takes a great deal of time, attention to detail, and precision. You’ll need to accurately assess the scope of work. You’ll also need to communicate effectively with a variety of other professionals (architects, suppliers, and subcontractors) to ensure that your bid total is competitive and profitable for your business.
If you are inexperienced in this process, it’s easy to make both small and large mistakes when you’re submitting your bid proposal. Bid proposal mistakes can lead to a variety of issues. Some mistakes will make a bid proposal invalid. Other mistakes can lead to something even worse: winning a bid for so low of a value it impacts the bottom line of a business. This is why it’s critical that you partner with a Tampa construction attorney for all your bid proposals. At Cotney Attorneys & Consultants, our attorneys can help navigate you through the bid process and ensure that you are making effective bids on projects without the types of mistakes that can hurt your business or rule you out of a bid competition.
If you don’t take the advice of our knowledgeable Tampa construction lawyers, your bid may be susceptible to one of these common pitfalls:
1) You're Applying to Projects That Exceed Your Qualifications
The golden rule of bidding is to never bid on a project if you believe that you can’t satisfy the project’s qualifications. In other cases, the scope of work and estimated cost of working on the project don’t align with your needs. Here are two common mistakes construction firms make when bidding on projects:
- An ambitious contractor bids on a project with a scope of work beyond their experience and capabilities. Because they fail to meet the expectations of the project, their reputation is tarnished and they face potential legal action (i.e., construction defects, OSHA violations, or missed deadlines) for their negligence.
- After crunching the numbers, a construction firm realizes that the project they are preparing to bid on won’t result in as desirable a profit as they had originally calculated. However, because they’ve spent considerable time on the bid proposal, they submit their proposal anyways to justify the time they already spent on the project — a sunk cost fallacy.
In either of these cases, a construction firm is either not qualified to work on the project or the project doesn’t meet their qualifications to perform the work. There’s no shame in abandoning a bid proposal in favor of a better one. At the end of the day, it’s better to lose a little bit of time evaluating a project than taking on one that ultimately hurts your bottom line.
Related: Run Away From Bad Contracts
2) Your Bid Package Wasn’t Complete
There’s a lot of information that needs to go into a bid package. If any required documents aren’t in your sealed application, the government agency selecting the project won’t consider you for the project. If you aren’t experienced in putting together a bid package, incomplete proposals can derail your efforts. In order to avoid being in the frustrating position of putting together a great bid and forgetting one critical document, consult a Tampa construction lawyer for all your bids. An experienced construction attorney will have a checklist in place to ensure that all of the required documents make it into the bid package. With an experienced set of eyes monitoring all of the documents, you will have nothing to worry about when you submit the bid as you know it will be competitive and valid.
3) You Failed to Abide by All the Bid Application Requirements
Although an incomplete bid package is a surefire way to lose a bid, there are a variety of other ways your bid can be unsuccessful. For example, you’ll need to be registered and prequalified to be considered for selection. The agency funding the project may also require you to attend pre-bid meetings. You will also need to be mindful of the deadline to submit the bid by. Although these are all straightforward eligibility requirements, many bidders fail to closely follow these rules resulting in failed bids.
Related: Challenges When Bidding on Projects
4) You Had Poor Time Management
Although missing a deadline guarantees that you won’t win a bid, if you frantically submit a bid to get it in before a deadline, this won’t exactly build a great rapport between you and a government agency either. Bid proposals should be treated with a little more respect than “cramming” for a test in a high school math class. If you rush a bid in before it’s deadline, this can eliminate you from future consideration with that agency.
Submitting effective bids is a time-consuming process, and you have to dedicate considerable time to this process in order to be successful at it. Another thing to consider is that rushing a bid in is one of the common ways a company comes in way under the rest of the competition, which is never a good thing. If you currently don’t have enough time to put together an effective bid, then you shouldn’t be considering the project.
Related: Assessing Bid Readiness
5) You Mailed in Your Evaluation of the Scope of Work
Just like you should never rush to get a bad bid proposal in before a deadline, you should never cut corners during the evaluation process. If you don’t have sufficient time to assess the scope of work and the expectations of the project, you shouldn’t be submitting a bid. When you mail in the assessment phase, it’s all but a guarantee that your projected construction costs will be off the mark as you failed to obtain accurate measurements for the scope of work. This can lead to a variety of issues, including inaccurate budget planning for materials, labor, and the projected completion time of the project. When these calculations are off significantly, the bid proposal amount will either be greatly overestimated or underestimated.
6) The Bid Total Doesn’t Add Up
As we discussed above, if the numbers don’t add up in your bid package, this can lead to a lot of problems. Although agencies will typically forgive small mathematical errors in a bid, if your calculations are off the mark by a lot, the end result is that the actual cost of completing the work doesn’t align with the total in the proposal. To ensure that your bid doesn’t experience a terrible setback, our St. Petersburg construction attorneys advise construction firms to use construction bid software that ensures their calculations remain accurate. It’s also important to double check the numbers to verify the total. If your figures are off, your bid is invalid.
7) You Didn’t Perform Your Due Diligence
When you’re compiling all of the relevant documents, pricing estimates, and data to complete your bid package, you have to perform your due diligence. A bid proposal will never be accurate and profitable unless you have an in-depth understanding of the project and spend the necessary time working on the proposal. Whether it’s reviewing the scope of work, meticulously mapping out your plans, or discussing topics like bonds with our Tampa construction lawyers, you need to make sure that you have a complete understanding of every aspect of a project before you submit a bid.
At Cotney Attorneys & Consultants, our Tampa construction attorneys are here to help construction firms and professionals with bid work. For comprehensive services dealing with bid applications, bid protests, and bid defense, consult the attorneys at Cotney Attorneys & Consultants.
If you would like to speak with an attorney from our St. Petersburg construction law firm, please contact us today.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.