Episode 159 | 3 Tips to Win More Construction Bids

[00:00] Scott:

Welcome, everybody, to the next episode of The Mobilization Mindset. My name is Scott Peper, CEO and founder of Mobilization Funding, and today we are gonna be talking about three tips to win more construction bids. In construction, it is tough. One of the biggest focuses you have to make is how you’re gonna get work, how you’re gonna bid work, when you’re gonna win work, keeping it all in line. And today, Drew and I are gonna talk about exactly some of the best tips we have seen from the hundreds of contractors and the thousands of different projects we’ve seen over the years. Drew, let’s get right into it.

[00:56] Drew:

Pumped to be here, like always.

[00:57] Scott:

Yes.

[00:58] Drew:

Every single time.

[00:59] Scott:

All right. Construction bids.

[01:01] Drew:

Yeah.

[01:01] Scott:

Okay. One of the things our customers and clients, we talk about all the time.

[01:05] Drew:

Mm-hmm.

[01:06] Scott:

They wanna know tips and tricks. We’ve learned a lot over the years, seeing diff- many, many bids, um, finding out lots of bids that didn’t win, why they won, why they didn’t. But let’s talk about three of the most influential things that you can do to win more construction contracts, but yet, yet save your profitability, make sure you hit your margin, you don’t get bought out by your GC and undercut, and you keep yourself in line.

[01:34] Drew:

I mean, I kind of broke this into two groups and, and three points in each group, group number one being mentality.

[01:40] Scott:

Mm.

[01:40] Drew:

I mean, when you’re bidding, it’s… a lot of it’s sales. I mean, it’s… I know there’s a lot more, uh, technical components of bidding, but a lot of it’s just sales. And the… and then the second one is the tactical, you know, way to, to bid. But let’s start with the mentality. Number one, don’t bid everything. [laughs] Bid, bid, bid jobs where you want to build a long-term relationship with that general contractor.

[02:07] Scott:

Yeah.

[02:07] Drew:

Bid jobs that you know how to do and you’ve done over and over and over again, and you can control the process better, ’cause that learning curve is flattened a little bit. ‘Cause if anything goes wrong, you’ll know how to pivot. So, don’t bid every job. Bid jobs that, bid jobs that you know will yield a margin that is appropriate and can sub- and can support sort of the rest of your company.

[02:30] Scott:

Yeah.

[02:30] Drew:

Right? That’s number one to me.

[02:32] Scott:

I like that, too, because in that capacity, and you know, it’s easy to say, “Bid jobs you know you can do.” Well, if I’m a contractor, I say, “Well, I know how to do all these jobs.” True, but do you know how to do all those jobs the way… to the execution level that the way you bid them, such that you can guarantee the money that you have in the job at the point where you bid it is the exact amount of money you’re gonna make or more-

[02:55] Drew:

Mm

[02:55] Scott:

… after you’ve executed it?

[02:57] Drew:

Mm.

[02:57] Scott:

And I’ll give you an example. Horizontal versus vertical construction. You can do both, but maybe you have much more experience in horizontal construction or projects, and you can produce that outcome better.

[03:08] Drew:

Mm.

[03:08] Scott:

Maybe your group, um, of employees does much better within a 30-mile radius of where you are, versus when they get outside 40 or 50 miles.

[03:17] Drew:

Mm-hmm.

[03:18] Scott:

Maybe you’re really good with all of those things, as long as it’s a day trip, but as soon as you have to do any type of overnight travel or move to a different state or any type of dynamic, government versus sc- a school government project versus a private project-

[03:34] Drew:

Mm

[03:34] Scott:

… th- something goes sideways. Knowing those-

[03:35] Drew:

A new municipality versus a federal contract, I mean, that’s completely different.

[03:39] Scott:

Exactly, and knowing those kinds of things are what we’re talking about specifically. So it’s not just the construction.

[03:44] Drew:

Mm-hmm.

[03:45] Scott:

Yes, you know how to do all the electrical work if you’re an electrician, or the plumbing if you’re a plumber, or site work if you’re site work.

[03:51] Drew:

Mm.

[03:51] Scott:

But those are the nuances we’re talking about. The second thing I think is really important when you’re thinking about tips to win more-

[03:58] Drew:

Mm-hmm

[03:59] Scott:

… is, and you mentioned mentality, and mentality for me has a lot of pieces, and I don’t wanna steal your thunder on that. But the one that was really key that I wanted to hone in on was looking at the stuff that you’re bidding, the projects-

[04:13] Drew:

Mm-hmm

[04:14] Scott:

… with a risk-adjusted mindset, meaning, how much risk am I taking-

[04:20] Drew:

Mm-hmm

[04:21] Scott:

… in this project?

[04:22] Drew:

Yeah.

[04:22] Scott:

Is it bonded? Is it not? Is it out of town or in town? Is it a new customer or an existing customer I’ve worked with?

[04:30] Drew:

Mm-hmm.

[04:31] Scott:

Am I using my best crew, my best leadership available because of where it’s gonna fall in the schedule, or is this with my newer crews or my newly promoted project manager? Those are the types of risks you have to determine internally that are just reality, right?

[04:48] Drew:

I’m just laughing because how many times have we talked, uh, and spoken with a contractor that says, “I’m about to start a new job with a new general contractor that I’ve never worked be- for before, three towns over or in a different state, and they’re doing a warehouse job that I’ve never done before. But my margin on… it’s a larger contract, too, my margin on this is a little smaller than I’ve typically done, ’cause I wanna get in with this contractor”?

[05:14] Scott:

Yeah.

[05:14] Drew:

So, you have all these risk factors, and then you’re accepting a lo- lo- lower economics on the job. That’s kind of what you’re talking about, right? You’re like, “Don’t do that.”

[05:24] Scott:

Right, or, or know that you’re doing that. And to your point, like, when you said mindset on the job, I wanted to think, like, I love the con- I love contractors, ’cause that exact contractor’s gonna be like, “Yeah, all those factors, I’m gonna smoke this thing.”

[05:35] Drew:

Yes, smoke it, yeah.

[05:36] Scott:

And they’re like, “This thing’s gonna be great, and I’m gonna kill it.” And so they have a great optimistic mindset, and I’m not saying not to. I’m just saying have the same optimistic mindset, but keep in mind you’re three towns over. You’re working for your municipality you never did before. It’s with a newly promoted project manager-

[05:53] Drew:

Mm

[05:53] Scott:

… for a brand-new customer at a lower margin. That inherently is just a more risky job if anything goes wrong, including weather, which you can’t control. You’re gonna have a problem making up margin, making up schedule. It’s just not gonna be as easy if you had your best crew in your f- hometown with a customer you’ve already worked with before.

[06:12] Drew:

So one thing I’ve learned from you, Scott, and I, this is totally applicable to the bidding process, but, um, s- the second point I was gonna make is sell with confidence in order to give your customer or general contractor, in this circumstance, the most confidence. What value does, like, projecting confidence to your potential customer, uh, play in actually winning a bid or winning business in generally, in general?

[06:39] Scott:

It provides comfort to them that you’re aware of all the things that are, that everybody knows can go wrong or right in construction. So confidence is, is not saying, “I’m gonna kill this thing. I’m gonna smoke it no matter what. Don’t worry about any of these factors. I got it.” Confidence is, “I know all of these things exist. I can manage them, and here’s the reasons why,” acknowledging that they are there, “and here’s how I’m gonna mitigate them.” Confidence in this case also is talking to a general contractor explaining, “Hey, look, the way you’ve laid this out isn’t ideal for how this project’s gonna actually go. So when I bid the project, I’ve laid it out in this manner instead. So you can see that as this gets executed, these are gonna be the key factors. And so although you put the RFP out this particular manner, and I’ve answered all those questions, I’ve also given you the additional format of how this job will actually go and how the schedule needs to be laid out and why.

[07:36] Scott:

Because this is what I want to make sure you understand how the dynamics could go.” That’s like, that gives the general con- contractor massive confidence, because they don’t know everything, and they definitely don’t know everything about every scope, but they do know they need great trade contractors-

[07:49] Drew:

Mm-hmm

[07:49] Scott:

… who are confident and they can trust. And that level of, um, e- experience, example, confidence that you give to the general contractor will give them the confidence they need in you, and that’s all they need at that point.

[08:02] Drew:

Yeah, and, uh, this goes back to the tactical side, that those are kind of mentality. The last thing I was gonna say is follow up. Have a follow-up pattern. That’s basic. That’s basic stuff, though. We don’t have to get into that. But as you get into the more tactical side, when you’re bidding jobs and you want to give that general contractor confidence, before you price, eliminate all the scope gaps.

[08:25] Scott:

Yeah.

[08:25] Drew:

Like really, really study the design, the drawings, the specs, all of that stuff before you bid, ’cause, uh, you, you just don’t wanna rip a bid and say, “Hey, the… I, I know this is the general scope. I know these are the inputs I’m gonna have to put in there. I’m just gonna do this markup.” Really analyze the requirements and almost be a consultant to the general contractor, ’cause you’re the trade specialist.

[08:47] Scott:

That’s right.

[08:47] Drew:

You’re, you’re the specialty trade. You’re the one who’s an expert in that field. They’re really leaning on you.

[08:52] Scott:

Yep. And that’s why price is important. Yes, the overall price that you offer, and, and look, if this is a rip in bid and it’s the lowest price wins, okay, great. Well, then you gotta figure out how to operate in that, in that arena.

[09:05] Drew:

Mm-hmm.

[09:05] Scott:

Um, but just because one of your competitors can offer a certain price does not mean they’re doing it at the same margin or that they have the same cost structure as you. Some companies can offer a lower price at a higher margin because of their internal structures, their internal costs, their internal framework-

[09:22] Drew:

Mm-hmm

[09:22] Scott:

… than you can. That doesn’t mean you’re bad or good. It just means it’s not the right job for you.

[09:25] Drew:

Mm-hmm.

[09:26] Scott:

So I think what’s important when you’re thinking about price is what’s the right price that you feel comfortable executing that job at-

[09:37] Drew:

Mm-hmm

[09:37] Scott:

… not what price do you need to be at to win it.

[09:39] Drew:

Mm-hmm.

[09:40] Scott:

And then if you keep losing bids because you’re too high priced, then you need to either figure out where your value is gonna be or you need to be able to adjust your internal cost structure so that you can keep your margin. But you don’t wanna just lower your margin to get the right top line price, because all you’re doing is adding significant risk to yourself.

[09:57] Drew:

Mm-hmm. One thing in the bidding process is I always come back to this word clarity. Provide absolute clarity so that the cognitive load of the buyer, meaning the general contractor in this scenario, is not high. Make it almost too easy for them, such clarity that they, they, they really don’t have any ambiguity in their thought, in their thought process. Make it just easy.

[10:23] Scott:

Yeah. If, if they don’t understand your bid or they have questions about it-

[10:27] Drew:

Mm-hmm

[10:27] Scott:

… it’s gonna… And you cr- it creates extra work for them, you’re gonna be much less likely to win. The last thing I would say, Drew, is, you know, if you could ask yourself one question when you submit a bid is, if your general contractor compared you to your competitors on everything else you included in the bid except price, would you win?

[10:50] Drew:

Mm-hmm.

[10:51] Scott:

And that gets down to what you’re talking about with absolute clarity.

[10:53] Drew:

Mm-hmm.

[10:54] Scott:

If you can put absolute clarity in them and reduce the cognitive load such that the… if price wasn’t on there, you are so obviously the best person to pick-

[11:03] Drew:

Mm-hmm

[11:04] Scott:

… you have a significantly better chance of winning more work.

[11:07] Drew:

Yeah. Yeah. And you’re not just estimating to, to, to the job. You’re estimating the way to do the job the best way. If you take price out of it, like bid to do it and build it the right way.

[11:21] Scott:

Mm-hmm. And if you win on price all the time, then you’re gonna lose on price all the time, too. And so you wanna win on your value and your performance, and so getting your value and performance into your bid is important.

[11:35] Drew:

Dude, that is some wis- I mean, that was so basic, but that’s wisdom. I mean, that’s only, [laughs] that’s the only reason I’m laughing. It’s just, that’s it.

[11:44] Scott:

All right, everybody, I hope those three, four, maybe even five tips, depending on how you count them up, work for you. But in the meantime, you can catch all of our other episodes on our YouTube channel. You can catch our episodes on our mobilizationfunding.com, along with all kinds of tips, tricks, tools, cash flow tools, and much, much more. Until next time, have a great week, and may God bless you. [outro music]