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Reading a Construction Bid Tab
The competitive bidding process is alive and well in the United States. With something short of 900 billion dollars in total construction permits, there is a lot of pricing going on. Few owners say “take as long as you need, work when you want and bill us what your work is worth”.
Competition is still a respected activity in our business community. Contractors compete with others every day. We hope that these contractors compete only with their qualified peers. To compete against an unqualified firm will certainly result in financial and reputational injury.
We compete mostly on price. Our peers are as qualified as we; they have the same cost structure and the same quality level. Clients look at us all and see only a difference in price.
So, it comes down the financial proposal. The comparison of fees against each other, it is the only difference. Fair or unfair, a relationship will carry you far. But competitive pricing will carry you as far if not farther.
Bid Tabs are the result of the completive process in the public arena. Disclosure of prices is required by our public work process.
To bid effectively, we need to know the bid tab information. Why? It allows us to predict with higher certainity what other contractors will price. Put another way, there is an old saying that states "once is luck, twice is habit, three times is a trend, and four times is a characteristic". After several bids, we should know meaningful characteristics of our compeitior's proposal process.
Other information is needed to effectively bid against others (meaning consistently receive your share of the work and leave less money on the table)
Samantha 177,000
Jefferies 165,000
Portland 172,000
Honalee 170,000
Your Bid 175,000
These bid prices mean nothing when taken on a single job. So the first rule of reading a bid tab is:
Bid Information has to be collected on several instances.
Collecting a dozen of bid tabs of your competitors will indicate many characteristics of your peers. Characteristics don’t change hardly, if ever.
To further refine the information you collect, you will need to compare your cost against other's bid prices. Since your competitors don’t (and won’t)
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Posted by Matt Stevens at April 5, 2006 12:22 AM