JEROME JORDAN F.

FAMADICO
2011
Construction Planning, Scheduling, Estimating
Friday/ 6-9 PM

March 25,

MAKING WINNING BIDS

Bid strategy is the most difficult of all the functions of management to define. It is
the least subject to the rules of logic, impossible of scientific engineering analysis,
and yet basically so important that an average contractor with a fair knowledge of
the business and a competent organization who lacks an adequate concept of the
art is almost foredoomed to failure.
Basic Considerations in Bidding
Bid Strategy, for the purpose of this article is considered the science of outguessing
and outmaneuvering the competition in order to secure more profitable work. It
therefore encompasses guidelines for preparing bids on lump-sum or unit price on
building or heavy construction work. In addition, bidding must cover the strategy of
determining what work to bid on or, in cases of cost plus, C.P.F.F., target estimate
guaranteed max, or even turnkey projects, what to propose on. Also it must include
how to approach the proposed structure itself so as to have the greatest possible
chance of presenting a more attractive offer than the competition and what to offer
to succeed in this without destroying profitabilities. There must be an accurate
appraisal of the current competitive potential of act of the known or suspected
bidders on the given project, A sound knowledge of the owner and the owners
engineer is imperative; since the price or terms of the proposal must be adjusted to
take into considerations what their attitude and policy will be under any given set of
circumstances that may be encountered during the construction period of the
project.
All contractors from the local or regional house builder to the largest national or
international diversified constructor, face from time to time a dearth of work to bid
or propose on, with consequent increase of competition to the point where the low
bidder is almost sure to lose his money and the others are spending theirs in order
to prepare proposal that have no chance.
The contractor, regardless of size or geographical scope, must remember that even
in times of shortage of work and maximum competition there are always some good
jobs.
Periods of high volume of work and rising construction prices do not lack their own
pitfalls. The tendency, particularly among the large and growing contractors, to
propose on everything and spread out too fast can be most dangerous.
When to bid?
The first requisite of successful contracting is intelligent analysis of whether or not
to submit a proposal on a give job. This must be determined by careful study of the

contract conditions and meticulous examination of the site of the work by the
estimating engineers, by the chief engineer, if advisable, and very possibly by the
VP-operations and perhaps the president, unless one of them has had previous
experience in the immediate area and has clearly in his mind any difficulties to look
for and how it may be possible to avoid them.
A sound understanding of the abilities of the owners engineers, their general
attitude and policies, and the general practices of a federal, state, or regional
agency or public commission is a must. The contractor who is deciding whether to
bid or, if he decides to bid, what to add on or subtract from his bid for the
engineer is exercising one of the most important elements of bid strategy.
Influence of the Owners Engineer
If the work to be bid on is complicated but within the capabilities of the contractor
and the time is short for construction, the contractor must decide whether the
engineer can be trusted to avoid engineer-caused delays and cooperate toward
expediting the work to permit construction on time and within bid cost. If the
contractor decides that the engineer is competent, will make prompt decision, and
will render fair rulings in gray areas then subject to his decision on his ability to
beat the competition he will bid the job on a basis to win , and with minimum
contingency money to cover only direct physical hazards.
Influence of Competition
A shrewd analysis of the probable competition and its potentials in deciding whether
to submit a proposal on a given project, and prior to bidding if the decision is
affirmative, is most essential. A simple rather straight forward project in a familiar
area with average to good climate and an ample supply of competent labor,
supervised by capable and reasonable engineers, may nevertheless offer little or no
possibility for profit.
Over caution
Not frequently an excess of caution can cause a contractor to pass up a very good
job. The contractor who had wisely chosen to pass up the dam in favor of the more
complicated and less attractive subway work had been most successful
Influence of Experience
The decision having been made to submit a proposal on a given contract and
adequate study having been made to ascertain the fundamentals affecting cost, the
final decision on bid price, target price, or guaranteed max hinges on who the
competition is and how each one is likely to approach the particular job.
Influence on Propaganda
Bidding propaganda between competitors sometimes take the form of elaborate
planning and skillful execution. When proposals are called for on major projects
away format the population centers or bids are scheduled to be opened away from

the site of the work, a t engineer district or division head quarters , naval districts or
perhaps state capitols, competing contractors tend to gather at one or more leading
hotels to finalize their proposals and pick up any available gossip.