These days, you’d be hard-pressed to find anyone willing to invest in anything sight-unseen — whether it’s a vehicle or a home — with no line-by-line breakdown of what their money would be going toward.
And yet, transparency has been lacking in the capital project industry, with owners having had little insight into what it actually costs to build their projects. That is, until they find themselves having a front-row seat to the common cost overruns and delays as they play out.
So, what exactly is transparency? In the context of construction bids, it’s having an understanding of what an owner’s investment is paying for, the potential risks that can affect their project and the contractor’s ability to deliver. Let’s look at some of the different ways transparency affects the bidding process and how construction bidding software can play a positive role.
Transparency in bid source data in construction bidding software
After decades of favoring the low-bid-takes-all approach — and then getting burned by unforeseen costs — owners want to know: What am I paying for? Where do the numbers come from? They’re now not only appreciating but expecting more accountability and more realism from the numbers represented in the bids they receive.
This is where your historical project data or industry benchmarks come in, bringing the verifiable, real-world context that all owners value. While history can’t predict the future completely, it can serve as a reliable guide. But how can you be transparent with the copious amounts of information generated by all your projects? Construction bidding software, also known as construction estimating software, houses all that data in one place.
And that’s making it infinitely easier and quicker to pull relevant details into each capital project bid. You’re essentially giving project owners a solid idea of what they can expect to encounter during the course of the build as justification for the details you present in your bid. These include materials pricing, and the cost and schedule impact of anticipated and unexpected risks as reflected in performance metrics. The advantage? Your bid will stand in stark contrast to contractors who may choose not to be as open.
Construction bidding software not only helps deliver more accurate, comprehensive bids, but it also establishes a level of risk-adjusted cost certainty well before construction has even started. And having such visibility into actual and projected costs so early on can help stave off some of the undesirable byproducts of off-the-mark bids: costly change orders, time-consuming rework and many awkward conversations with the owner.
Transparency of impact in potential owner-requested changes
It’s often said that the only constant is change. That’s certainly true in capital projects. But what about the changes you can control, like altering the design or switching out materials? Owners like to explore their options even at the bidding stage; after all, they’re heavily invested in the potential of their projects. But what are the effects of those specific scope modifications on cost and schedule?
Knowing the possible outcomes of owner-suggested alterations before they’re implemented not only informs better decision making on whether to move forward with them, but also can save some headaches and expensive change orders down the road. The forecasting ability of construction bidding software helps you give owners a glimpse into what those modifications may entail and just how sensitive budgets and timelines can sometimes be to seemingly minor suggested ideas. In instances where such modifications are required rather than merely proposed, contingency plans can be developed to accommodate and mitigate any financial or scheduling impact.
But what about the unexpected? Transparency is possible here, too. Project owners are also able to see the predictable impact of contractor-anticipated risks on costs and schedules. These can be risks that played out in past projects or may be expected given current conditions such as known supply chain issues or material shortages. Not only does it reduce the potential for future surprises and change orders, but it gives owners a clear view into how unplanned variables, including their own requests, may skew timelines and monetary outlay.
Transparency between owner and contractor
What is the effect on the owner-contractor relationship? Openness and insight into what it will realistically take to complete the project not only shows your understanding of the project scope and owner requirements but fosters trust in your ability to handover a successful project within the stated budget.
How does construction bidding software help? In addition to producing more accurate bids and calculating risk-adjusted budgets and schedules, it plays a supporting role in helping you demonstrate your responsiveness in revising the bid (and later, the estimate) as new details, updates or modifications are made to owner requirements. That becomes a basis for establishing an ongoing dialogue from the beginning of the project, with far less risk for misunderstandings or lack of collaboration when issues surface, as they’re likely to do during long builds. And that can help foster a working relationship built around trust — on both sides.
Construction bidding software as an effective tool for your future bids
Construction bidding software helps pull back the curtain on what goes into a bid, providing assurance to project owners that they’re getting what they are paying for and that they can be confident in your ability to successfully manage their job. When you’re ready to up your game, InEight construction bidding can help surface transparency in a way that benefits everyone in terms of improved decision making, accounting for the unexpected, fostering mutual trust and strengthening project certainty. We’re happy to show you how it works.
