Why Do You Need Competitive Bidding On Your Projects?
A diverse range of organisations (from tech to healthcare) can participate in the competitive bidding process. So, what is competitive bidding, and what do you need to know about it?
It’s a process of procurement that promotes equality since an enterprise of any income or size can partake. Everyone has an equal opportunity to become a seller or buyer. Competitive bidding creates an environment to enable companies to make informed investment choices. In addition, it lets companies identify different ways of innovating their product or business.
With age, competitive bidding has evolved exponentially. It does not include people spending more resources and time undergoing the bidding process. Moreover, it does not require having great methods for running the bidding procedure.
The only thing you require is a couple of basic things to initiate building a solid competitive bidding process:
- A shared directory comprising updated contact details of vendors
- A decent bid template
- A centralised method for every team member to access updated documents from all devices
- A clean work scope
While levelling bids in a manual process, the team gets disincentivised to invite different bidders. The automated bid levelling software allows you to align the cost-savings goals within a limited timeframe. And your team must manage the overall method within the given time. Note that the tool does all the administrative work, allowing your team to spend time on crucial business challenges.
So, if you have finally decided to opt for competitive bidding on the project, now is the time to learn further. On that note, here are the top three questions you need to answer beforehand. Welcome to this post that elucidates the three questions to ask before you consider competitive bidding for your project.
Are You Aware Of The Opportunity Cost Of Not Bidding On The Work?
Do you know that competitive bids reveal the expanse of sticking with the preferred vendor for the work? And over the years, you may work with the preferred vendors to manage the expenses depending on the fair market value. But that’s true only when you establish the baseline. So, before you ensure whether to bid or not, you must ask: how does construction bidding work?
Learn what is construction bidding before you make your decision. If you fail to make a profit, you don’t have any business bidding on it. On the contrary, not putting work into bidding may have some opportunity expenses.
So, the first thing is to ensure you have a comprehensive and accurate account of the annual labour equipment cost. That way, you may estimate the overall costs accordingly. While calculating the labour expenses, ensure to include the following:
- Workers’ compensation
- Tools & equipment
- Vacation fee
- Other additional benefits for the workers
As soon as you determine how much it costs you to complete the project, you must consider variables such as:
- Contract requirement
- Construction’s planned method and more
It determines where the job is profitable and whether you need to submit the winning bid.
One note: You can use the best construction bidding software to track, create, and manage bids. It has features like contact management, projective management, and analytics and reporting. These tools allow the project owner to increase bid efficacy and profitability.
Does your organisation evolve with the industry?
With technological innovations and alterations, construction bidding forms have changed. Although the real estate industry’s adaptation to these innovations is slow, its curve is steadily pointing up industry leaders to implement technologies. That way, they can drive efficiency, transparency, and high project returns.
Now, what is bidding in construction? Well, construction bidding is the method to submit a tender by the contractor to clients. It’s in the form of a proposal for managing or conducting a construction project.
The process of bidding is essential in the construction project. After all, it enables companies and firms to hire contractors. So, consider how much your establishment has evolved over the years when deciding whether to bid.
Do you only consider your past relationships with vendors? If you want to choose them solely, you might be falling far behind the advancements. You may want to identify qualified vendors. Also, ensure that you implement new ways to manage the project. In addition, whether there are effective ways to achieve quality work at better rates or not.
While assessing how bidding work in construction does, choose vendors who are diligent in modernising & make shops efficient. Remember one thing – the inefficiency costs get added to the bill. That’s irrespective of whether the vendor faxes the change orders or resists contemporary construction practices.
How Dependent Is Your Supplier On You For Business?
The construction business depends on the trust between collaborating parties. So, one factor that assesses a strong relationship between businesses and their suppliers is the dependency between parties. Do you know dependency and trust in any business relationship are vital? Dependence and trust act as the antecedents to the following dimensions:
- Long‐term orientation
If you ask what the bidding process in construction is, here’s a brief:
- The contractor or client sends the bid invitations
- The subcontractors and contractors get invitations, including a penalty, scope of work, time of completion, pre-qualification details
- Sub-contractors and contractors download tender documents & review that project depending on cost codes
- Contractors or sub-contractors submit the bid to general contractors or clients
- The client or general contractor rewards the bid to subcontractors with the competitive bid, and it transforms into a commitment
In the bidding process construction, there are three major decisions: the project delivery, the procurement, and the contract processes.
So, you must learn how much of business the supplier’s business comprises. It may sound beneficial to be the vendors’ prime source of work, but that might be risky also. According to the rules, the vendors must derive not more than 20% of the income from a customer.
SIGNAX is unified solution to help you reduce the time required for making management decisions. Actual schedule and the budgets are here in your smartphone. Control the construction resources remotely. SIGNAX digital solution will make your bidding process less complicated.