10 tips for pricing your next construction project correctly

Have you been awarded a project only to find that there were errors with your price? Maybe you misunderstood what was required, didn’t allow for difficult project conditions, misinterpreted the contract terms and conditions, possibly made a stupid arithmetic error, or assumed a material price instead of obtaining an accurate quote?

But I’m sure just as often you were not awarded a project because your price was too expensive? Sometimes the company who were awarded the project ended up losing money, but more often they made money! How did they win the project? Why was their price lower than your price, and yet they were profitable?

Estimating a construction project accurately involves some art, some science, knowledge of construction processes, experience, and more than a little luck. Of course, it also requires thoroughness – there is no place for careless errors or reckless assumptions.
​
10 steps to getting your price right

1. Read the documents and understand the scope. What are you pricing? What are you committing your company to construct? What are the contractor’s obligations and what are the client’s obligations? If there are any doubts or concerns ask questions or qualify exactly what is included in the price. More than one estimator has failed to price some work they should have priced, while others have priced items that the client was supplying.
2. Understand the contract document. Contract wording varies from project to project. Even an omission of a word or an addition of punctuation can make a difference to how the contract is administered. Make sure that the terms and conditions contained in the contract documentation are acceptable to your company and that the company can comply with them.
3. Understand your client. Unfortunately, some contractors don’t take the time to carry out research on their clients to understand them. Do you know if your client has the money to pay for the project? What is important to the client? What are the client’s requirements? Some clients can be particularly difficult and demanding and this might have to be allowed for in the price. Other clients can be easy to work for, and may even have further projects.
4. Know when the price is due, where it should be submitted and the format. All too frequently contractors spend time pricing a project only to have their price disqualified because it was received late, it was delivered to the wrong address or the client discarded it because it wasn’t in the format required. Even not signing in the designated place could invalidate the price.
5. Visit the project site. Visiting the project site enables the contractor to obtain valuable information about the project site conditions. Most clients would expect the contractor to have visited the project and taken cognisance of the conditions. Not knowing the site conditions will be no excuse for a claim later.
6. Understand the local conditions. .....Continue Reading......

This article was first published on the ClockShark website. To visit this website and continue reading the article click on the link above.
Please share this post
To read more about the author’s books and find out where you can purchase them visit the pages on this website by clicking the links below:
'Successful Construction Project Management: The Practical Guide'
'Building a Successful Construction Company: The Practical Guide'
'Construction Claims: A Short Guide for Contractors'
'Construction Book reviews'
To read more about the author visit the page 'Paul Netscher'
Want to contact Paul Netscher please enter your details on 'Contacts'
Find out how Paul Netscher can help you

Order your books from Amazon
Order your books from Amazon UK
© 2017 This article is not to be reproduced for commercial purposes without written permission from the author.