Getting your construction price submission or quotation right

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"Winning new construction projects is often not just about having the lowest price."

In a previous article Steps to help you win your next construction project we discussed what contractors should do to win more construction projects at the right price and for the right client.
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Winning new construction projects is often not just about having the lowest price. Don’t underestimate how important your project price submission (tender submission) is. This must be as professional as possible. In the past, I’ve often attended price clarification meetings where the client has complimented us on our quotation or price submission and they have possibly been swayed to award the project to us.

Leaving out something from your price submission could mean that your price is disqualified or that your quotation is evaluated without the client have access to all the relevant information.

Clients may have a number of submissions to evaluate and sometimes won't be bothered to read through all of your price submission to search for the required information that wasn't clearly available.
#constructionpricing #pricingconstructionprojects #constructionindustry

​What construction price submissions should contain

"Include what the client requested and sell your company as being the best contractor for the project"

Some or all of the following could be included in the tender submission:

1.            an index for bulky submissions so content can easily be found

2.            covering letter

3.            the final price or form of tender

4.            commercial and technical clarifications and qualifications

5.            the proposed construction schedule (programme) or project duration

6.            a break-down of the price

7.            the contractor’s proposed project management organisation chart and curriculum vitae of senior staff

8.            a list of equipment and subcontractors

9.            the deliverables the client has requested (which may include proof of insurances, cash flow and histograms)

10.         company profile including a list of similar projects the contractor has completed

11.         safety information and documentation

12.         quality documentation (keep the information relevant to the project and demonstrate the company has a clear understanding of the client’s requirements and will meet and even exceed these)

13.         environmental management information and documentation

14.         if necessary, traffic management plans

15.         the project approach, work methodologies and considerations taken into account in the tender

16.         company brochures (which may include financial statements and safety statistics)

"You should demonstrate to the client that your company understands the construction project and has the capabilities to complete it"

​Include as much information as possible to demonstrate that the company has an understanding of the construction project, has thought through the construction process, and has the personnel and resources to undertake the project successfully.

Ensure sections such as safety and quality are included in their own separate sections in the submission and aren’t spread across other areas of the submission. This could result in the reviewer only receiving, and reviewing, a portion of the relevant information.

Remember, large and complex construction price submissions are often reviewed by a number of different people, or departments, within the client’s organisation. The quotation or tender submission is frequently split into the relevant sections which are then circulated to various people who aren’t even directly associated with the project but will, for instance, be requested to review all the contractors’ safety documentation. If they don’t receive the full submission from a contractor they’ll assume it wasn’t included and will give the bidding contractor a poor rating which may adversely affect the contractor’s chances of being awarded the construction project.

​Scoring your project price

Many construction project price submissions are scored not just on price but are affected by other items in the submission such as quality documentation, safety plans, methodology and schedule.

Often the client has a defined method they will use to score and adjudicate the contractors' quotations, which could take into account a number of factors including the price. This process often follows a set formula which is outlined in the project pricing document. The contractor must understand how this formula works, ensuring they maximise their scores. The items the client will look at should be clearly highlighted and must comply with the client’s requirements.

For instance, some clients may score the contractor’s price as 90% of the overall score with the remaining 10%, say, being made up of various factors, such as the local ownership of the company, the number of indigenous employees, the amount of money that will be spent in the local community, the experience of the proposed construction team, the resources available for the project and the contractor’s safety record.

"Don't leave something out of your price submission which could jeopardise your chance of winning the project"

​Checking your project price

​Check the price submission to make certain:

1.            all the documentation requested by the client has been completed and is included

2.            that all the pages have been printed and are included (sometimes in the binding process pages get inadvertently left out, or during printing, errors occur resulting in blank pages)

3.            the pricing documentation or quotation is presented in a logical and easy to read format (The specific documents the client has requested should be highlighted and easy to find. I’ve on occasion had clients ask for documentation which we had included in our price submission but which they couldn’t find. This is frustrating for the person adjudicating the price or quotation and can lead to them assuming it isn’t available, resulting in your price for the construction project being disqualified.)

"Demonstrate that you are the best contractor for the construction project"

Do not jeopardise your chance of winning the next construction project

​It would be a pity if you weren’t awarded a project, despite all the work you put into pricing it, because your presentation was shoddy, the client couldn’t find a required document, or weren’t convinced you were the best construction company to construct their facility.
#constructionmanagement #constructionmanagementtips #constructionquotations

In our following articles we delve into more ways to improve your chances of winning your next construction project. See Post bid communications - the difference between winning and losing a bid., and Construction bid clarification and negotiation meetings, and Construction project bid negotiations – Don’t make a mistake​

The information in these articles is contained in the book 'Building a Successful Construction Company: The Practical Guide' by Paul Netscher

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"Terrific book with lots of practical information. I like the checklists at the end of each chapter. Easy to print and share with the team as reminders of best practices." (Reader Amazon)

​(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.)

Other similar articles by the author:
Improve cash flow. Implement these strategies when pricing your next project
Don’t make a mistake when you price your next construction project
Why owners sometimes appoint the wrong contractor

​© 2022 This article is not to be reproduced for commercial purposes without written permission from the author.