The Art of Bidding

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Steps 13-23 of 33

Step # 13 Organize the Information Create a List of Special Work Conditions

  • Example:
  • – Site Conditions
  • Tight Work Space
  • Hard Ground
  • Wet Conditions
  • Contaminated Soils
  • Environmentally Sensitive Areas
  • Difficult Access
  • Haul Routes
  • Scheduling Conflicts

Environmental Mitigation

  • What Must I Protect?
  • What Must I Replace?
  • How Much Will it Cost?
  • How Long Will It Take?
  • Conflicts with Other Trades

Step # 14 Organize The Information Create and Maintain a Bid RFI System

Step #15 Organize the Information Create and Maintain an Issues Log

XYZ Construction

 Log – Log – Log

Step #16  Organize the Information Addressing Alternates and Special Pricing in the Bid

XYZ Construction

Pricing for Alternates and Other Special Pricing Requests Always Carry Certain Risks

  • How likely is it that the work will be performed?
  • How much overhead and profit do you apply to this alternate?
  • Are you giving away profit and project overhead if the alternate work is not performed?
  • You will most likely have to justify this price in the future

Step #17  Organize the Information Create and Maintain a Log of Value Engineering Ideas

Value Engineering Ideas

Creating a log of value engineering possibilities is like creating a list of “Plan Bs” that could help mitigate certain risks on the project

3rd – Distributing Information

  • Takeoffs (Sheets/forms/software)
  • Invitations to Bid (Bid Packages)
  • RFQs (Requests for Material and Sub Quotes)
  • RFIs (Requests for Information forms)
  • The Bid Proposal (Form/format)
  • Database of YOUR own information
  • Budget for accounting department
  • Data for schedules
  • Data for Project Management Software
  • WBS (Worksheets for developing the Work Breakdown Structure)
  • Data for contracts

Getting to the Bottom Line Six Basic Elements of the Price

  • Labor
  • Equipment
  • Material
  • Subcontractors
  • Overhead
  • Profit

Step #18 Establishing Your Cost Basis

  • Hourly labor rates
  • % rate for sales tax
  • Fuel per gallon rates
  • Owned equipment rates (per hour/day/week/month) including maintenance
  • Equipment rental rates
  • Materials and common overhead
  • Daily company overhead
  • % rate for profit
  • Insurance rates

Labor Basis Worksheet

LABOR RATES – Cost Basis Worksheet

Step #19  Develop a WBS (Work Breakdown Structure) and/or Bid Item Take Off

  • What is a Bid Item?
  • – An item of work or other cost related to the project for which a unit price is desired
  • What is a Work Breakdown Structure?
  • – A logical breakdown of various components within those bid items that clearly reflect how the project is likely to be constructed

Bid Item Take Off

Let’s assume there are no pre-defined bid items for our sample project. If you could create bid items to best reflect the scope of this project what would they be? Use the form above to break this project down into bid items. Remember, the WBS – Work Breakdown Structure should be a snapshot of how the project might actually be constructed. For now let’s not be concerned with quantities. Just record a logical breakdown of the work.

Identifying “logical” bid items will help the entire bid process.  Not only will you get better prices, you will probably get them faster.

The value of a detailed WBS

Use sufficient detail to allow for the assignment of risk at any given place within your bid

Step #20  Develop and Maintain a Checklist for Subcontracted work

Develop and Maintain a Checklist for Subcontracted work

Subcontractor Checklist

 Step #21 Perform Quantity Take Offs

  • Methods of Take Off
  • – Scale and calculator
  • – Digitizer and spreadsheet
  • – Digitizer and estimating software
  • – Handheld device

Quantity Takeoffs

Remember – Flexibility is KEY

Bid Item Quantity Take Off
(Determining the Quantities for the Bid Items)

The highlighter and red pen

  • Have conventional color codes within your estimating office
  • – Example:
  • • Blue = Water
  • • Green = Sewer
  • • Orange = Storm Drain
  • • Brown = Concrete
  • – Use red pen for notations
  • – Use pencil when “sketching” on plans
  • – Make your highlighting significant to you

Step #22 Develop and Distribute Bid Packages or Requests for Quotes to Subs

  • Establishing scope
  • – Request scope letter
  • Who develops the scope?
  • – GC?
  • – Sub?
  • – Both?

Step #23 Send Scope Letter

  • As soon as possible
  • – Mock Bid Proposal
  • – Leave $$$ Blank
  • Should contain
  • – Quantities
  • – Inclusions
  • – Exclusions
  • – Any information that will help get your competition on the same page.