Better Manage Bid Shelf Life with Construction Estimating Software
October 07, 2021
As the number of construction companies adopting digitalized management processes increases, project owners have grown to expect more accuracy from bids they receive on their capital projects. After all, they have a vested interest in knowing precisely what it will take to complete their projects and what it will cost.
The reason for this expectation? The availability of highly effective construction estimating software. This type of software has helped construction companies address the inherent challenges of nailing down things like labor costs, materials pricing and equipment availability, even as those details fluctuate from one day to the next — particularly for longer-term, more complex capital projects.
Recognizing this and not wanting to incur those potential cost increases, project owners now often require that submitted prices be locked in while bids are being evaluated during the bid’s validity period. This period begins with the submission start date and ends with the owner’s established contract award deadline.
While bids ultimately have a limited shelf life in any business climate, construction estimating software can help increase your bids’ odds for fair consideration. It does this by dramatically improving the relevance and usefulness of each bid with a degree of precision previously not possible to capture. The following are some of the abilities you can expect.
Construction estimating software helps account for all bid document items
Particularly with complex capital projects, clients want assurance that their job requirements are going to be met. Estimating software ensures every detail that will go into achieving that objective is captured. It provides an accurate picture of what it will actually take to complete the project — from cost and availability of all labor, materials and equipment resources, to indirect costs and project-related services.
With accuracy being one of the key factors in winning bids, construction estimating software can do the heavy lifting in updating and calculating quantities and costs efficiently and in a fraction of the time it would take using traditional bid preparation methods.
Relying on solid historical data for realistic bids and insights
Leveraging details from past similar projects builds cost realism into the bid. You may be hard-pressed to assemble a more accurate bid. Importing past data into construction estimating software allows you to dig deeper into how your projects progressed throughout the build.
For example, how did your performance metrics (earned value management metrics tracking cost, schedule and scope values) trend over the course of those projects? Did costs of materials and their availability fluctuate at different times of the year? How were project-impacting risks addressed, with or without specifically created backup plans? Especially if your bid quote is going to be locked in, you want to make sure you plan for the ebbs and flows of costs revealed in your historical data — so you’re not stuck absorbing the full brunt of cost increases.
A robust estimating software solution helps you assess this wealth of data so you can incorporate the insights they provide into your bid, showing owners what they can anticipate over the course of the build so you can neutralize the element of surprise for both of you. And it can further strengthen their confidence in your ability to deliver the project for the quoted budget.
Calculating what-if scenarios for pre-bid decision making and contingency planning
Details can change. Owners may suggest scope alterations to explore. Even with all the changes a project can undergo, construction estimating software helps you achieve a respectable level of predictability in your bid. Through the software’s forecasting capabilities, you can calculate the financial impact of all kinds of what-if scenarios. So you can analyze cost comparisons for any suggested or required modifications. Account for potential risks by developing the most feasible contingency plans. And show how you plan for anticipated rate increases that would occur over the life cycle of the build (labor, materials) and for unanticipated events that could incur extra costs (severe weather damage) over the term of the construction period.
Accommodating bid validity extensions with construction estimating software
Sometimes the project owner may come back to all construction companies currently bidding on their project and request they extend the bid validity period to a future date. What is the best way to address this request while safeguarding your business interests within your bid? By turning back to the construction estimating software you used to create the bid.
With the right software a contractor can notify everyone who was asked to submit quotes that there is a bid extension request and to verify that everyone wants to remain under consideration for the bid. The same workflow capabilities that streamlined the bid creation process can keep everyone in the loop on the extension request details and new deadline. The bid period, and any extension, can be a narrow window. To accommodate this, software with alert and mark off capabilities can be sent to bid contributors when a response or task is coming due so bid adjustments can be made without holding up the time-sensitive assent and reply process.
As you explore construction estimating software options, consider InEight Estimate as a robust solution that introduces bid accuracy while helping to remove cost uncertainty. Request a demo so you can see firsthand how it can streamline your bid process and help you plan all throughout your project’s construction life cycle.