Before awarding a new construction project many clients request the contractor with the lowest price, or the lowest bidder, or maybe even the contractors with the 3 lowest project price or quotation, to attend a price or bid clarification meeting. If you are invited to a post bid (project price submission) meeting your actions in the meeting could mean the difference between winning and losing the construction project. Rash actions or concessions at the meeting could also cost the company dearly should you be awarded the project.
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The purpose of post construction project price meetings
The purpose of these meetings is often to:
1. Meet and assess the contractor’s team
2. Ensure the contractor has understood the project and has the necessary resources
3. Address any concerns regarding the contractor’s bid submission
4. Discuss changes in the scope of works that have occurred subsequent to the bid submission
5. Negotiate better prices or contract term
"Be prepared for the project negotiation meeting"
How contractors can prepare for project price negotiations
Preparing for the meeting
Before the meeting the client will usually send out an agenda. If they haven't it might be prudent to request one so you can be better prepared for the meeting.
In preparation for the meeting:
1. read through the agenda and ensure you’re prepared
2. go through the tender again to refresh yourself on the details (often you have moved onto other projects and have forgotten some of the details)
3. ensure that everyone attending the meeting is familiar with the project and can add value to the discussion (often senior managers or executives from the contractor attend, many of whom are unfamiliar with the tender and the project constraints, leading them to make inappropriate comments, promises and commitments – ensure they are fully briefed and understand the risks and constraints of the project)
4. ensure you know the date, time and place of the meeting, as well as the contact person and their details (it’s also useful to know the name of the meeting room since I’ve regularly arrived for a meeting at a large organisation and the receptionist has been unable to find the contact person because they are busy meeting with another contractor)
5. take a complete copy of the tender submission, filed correctly, including the calculations and the post-tender correspondence (there’s nothing worse than being asked a question in the meeting and having to page through file after file, looking for the relevant document)
6. take sufficient business cards, a note pad and pen
The contractor's negotiating team
The size and the make-up of the contractor’s team attending the meeting will depend on a number of factors:
1. the size of the project
2. the agenda provided by the client (for example, if there’s an item on quality it may be prudent for the proposed project Quality Advisor to attend, or, even perhaps the company’s Quality Manager)
3. who the client’s attendees are
4. what the client’s known priorities are (for instance, if safety is important take the company’s Safety Manager as well as the proposed project Safety Advisor)
It’s useful to include the senior staff you propose to use on the project. Where possible include the person who prepared the bid and is familiar with the submission and calculations.
Of course it goes without saying that everyone should be dressed neatly and arrive for the meeting on time. It’s often useful to arrive early as it may well provide an opportunity to see the other contractors being interviewed, or to meet some of the client’s team informally before the meeting which could provide some insight into their thoughts regarding the project and your tender submission.
We arrived for a construction project clarification meeting to be told apologetically that we wouldn’t be starting on time as the previous contractor had arrived late for their meeting – not a good start for them! However, five minutes later the other contractor walked out of the meeting looking embarrassed and we were called in for our meeting almost on schedule.
Sometime later when I met the other contractor at an industry event I asked why their meeting was so short and they told me they thought the meeting was for another project they had submitted a price for to the same client. They arrived with the pricing documentation for that construction price and were prepared to discuss that project, so when the client started asking questions their replies related to the wrong project. When the client couldn’t understand what they were referring to they eventually figured out the confusion. Obviously the client was less than amused and quickly terminated the meeting. Needless to say they weren’t awarded either of the projects.
The project negotiation meeting
"appear positive, and if what the client is asking isn’t possible explain why and offer alternative solutions"
At the meeting:
1. introduce the team, explaining each person’s role on the project
2. ensure your team is led by one person who may delegate others in the team to answer particular questions
3. take notes at the meeting even if the client confirms they’ll be sending out formal minutes
4. take time to answer the client’s questions; if uncertain ask them if it’s possible to provide an answer later
5. listen carefully to the client’s concerns and try and address these during the meeting as well as in post-meeting correspondence
6. at the end of the meeting summarise the questions that require answers, by when they will be answered, and to whom the answer should be directed (ensure there’s sufficient time to get the answers to the client)
7. appear positive, and if what the client is asking isn’t possible explain why and offer alternative solutions
8. don’t make promises and commitments that cannot be kept
9. thank the client for inviting you to the meeting
After project price clarrification meetings
After the meeting
After the meeting on returning to the office:
1. allocate the questions to the relevant staff and then coordinate the answers into one reply to the client
2. when the minutes of the project price negotiation meeting are received check that they are correct and are a fair reflection of what was discussed and agreed at the meeting (if there is anything that you disagree with, address this in a formal letter to the client)
3. if necessary send a letter after the meeting confirming the discussions and any revisions to the tender offer made during the meeting
4. ensure the client’s questions are replied to within the agreed time
5. send a letter thanking the client for the opportunity to meet with them and offer to answer any further questions they may have
"sell your company and price to the client"
Winning your next construction project
These meeting provide your company an opportunity to sell to the client why they are the best contractor to construct their project. Don’t spoil this opportunity by being unprepared or by taking the wrong people to the meeting.
#winningconstructionprojects #pricingconstructionprojects #construction
Next week I will discuss the negotiations further in: ‘A word of warning – don’t secure the project at any cost’ Construction project bid negotiations – Don’t make a mistake
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(Written by Paul Netscher the author of the acclaimed books ‘Successful Construction Project Management: The Practical Guide’ and ‘Building a Successful Construction Company: The Practical Guide’. Both books are available in paperback and e-book from Amazon and other retail outlets. This article is adapted from information included in these books.)
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