In my previous article 10 tips to successfully pricing your next construction project I discussed how some contractors take the shotgun approach to pricing and quoting construction projects. Literally submitting hundreds of prices in the hope that they will win a few projects. This leads to overwork of the estimators, and in some cases owners or project managers involved in pricing projects. It results in wasted effort, but more seriously it could lead to mistakes and winning projects with a price below what it’s going to cost the contractor to build the project. Unfortunately the shotgun approach could also mean that the contractor misses out on good projects which the contractor could have won if they had put more effort into their quotation and price submission.
In this article I’ll discuss another 10 more tips to successfully pricing and winning projects.
#pricingconstructionprojects #constructionbids #constructiontenders
More tips for pricing construction projects
1. Understand the quality requirements. Are they standard, and can you deliver the requirements?
2. Price the project from first principles. This means:
5. Check the project cashflow. Even a profitable construction project can destroy a company if the contractor can’t manage the cashflow. Negative cash flow – the death for many construction companies. So does your company have the finance available to pay for things while waiting for payment from the client. Most construction projects are cashflow negative until the end of the project. Larger construction projects usually require more cash, as do projects which require expensive materials, and projects that require a large amount of work in a short time frame.
9. Prepare your price submission so that it looks professional.
Finally make sure your price is delivered to the required person on time.
The next stage of the project price submission process
But even when the project price is submitted it doesn’t mean the process is completed.
Winning the right construction projects at the right price
In our 2 articles on pricing construction projects we discussed how important it is to have good market intelligence – what construction projects are coming out to price, and what your competitors or other contractors are up to. It’s important to understand all aspects of the construction project – the client, the contract document, and the project site conditions. Then develop an accurate price – based on an accurate construction schedule and the local market conditions, using the best construction methods suited to the project and the available resources. Finally submit a professional quotation that includes all the documentation requested, and importantly which sells your company’s abilities and why you are the right contractor for the construction project.
Pick the right construction project to price, a construction project you want and one you can win from your competitors, then put all effort into winning the project. Finally don’t lose the project or make a stupid mistake in the negotiation phase.
#constructionprojects #contractors #constructionmanagement
Other useful articles
What do you do when your construction project is LOSING money?
Financial checks and controls on construction projects
Do you want to learn how to manage construction projects successfully
Paul Netscher has written several easy to read books for owners, contractors, construction managers, construction supervisors and foremen. They cover all aspects of construction management and are filled with tips and insights.
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The books are available in paper and ebook from most online stores including Amazon.
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26/11/2022 06:27:14 am
I like how you mentioned that designated people should be hired to prioritize proper planning in all aspects of the construction. Yesterday, my cousin informed me he was planning to build one of his commercial properties. He asked if I had thoughts on the best option to consider when choosing a construction company that could manage all contracts. I appreciate this valuable article, I'll tell him it will be much better if he consults a trusted design-build construction company as they can provide more details about his ideal design process.
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The opinions expressed in the attached articles are those of the writer. It should be noted that projects are varied and different laws and restrictions apply which depend on the location of the contractor and the project. It's important that the reader uses the supplied information taking cognisance of their particular circumstances. The writer assumes no responsibility or liability for any loss of any kind arising from the reader using the information or advice contained herein.
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