New Year, New Tools: Improving Bid Accuracy with Integrated Tools
Conley Smith, Sr. Business Writer, On Center Sof tware by ConstructConnect
Posted: February 4, 2020 | Estimating
Estimating — it’s a jungle out there. Bid too low and you may win the project but lose your shirt. Bid too high and you could be lef t wondering how you arrived at such bad numbers in the first place.
If you’ve ever worried about bid accuracy, you’re not alone. Construction industry insider George Hedley estimates 80 percent of construction owners don’t know the true cost of doing business. Even if your construction firm has a nine month backlog, you can still miss details in project scope or fail to meet all the requirements in your final bid.
In a highly competitive environment where the low bid gets the job, contractors can lose money before setting foot on a project site. For example, if you’re using software for accounting, project management, and/or estimating, it may be time to consider how much time and money you would save by investing in integrated tools.
Time to Double-Check Your Numbers
Sure, you may get lucky with a project because you built fluff into your bid, or your crews worked faster than what you estimated. But the mounting pressure to accelerate the bid process and win more construction projects can lead you to risk accuracy and introduce errors based on assumptions or incorrect numbers.
You can count quantities correctly all day long, but you still could end up on the wrong end of a low bid if you’ve failed to double-check your numbers. For example, when it comes to the company truck, if you’re only including the gas, plus a little extra, you are making a big error in your estimate. Where is the accumulation of those dollars to replace the vehicle included in your estimate? And how about maintenance costs, registration, replacing the tires?
When the bid is on the line, no one wants to discover they’ve been miscalculating equipment cost for six months, or forgetting to accurately include site excavation work.
Errors are Easy to Repeat
Whether your construction business is focused on roofing or concrete, your bidding process may involve lots of moving parts. While you may already be using a digital takeoff tool to eliminate paper blueprints, your estimating workflow may still include a mixed bag of supplier and vendor spreadsheets. Inevitably, this can make bid day a mad scramble — especially if you’re juggling last-minute change orders.
In this case, you wouldn’t want a keystroke error to kill you profit or cause you to lose a potentially profitable project. Even so, it appears many contractors still lean on workflows that include their own processes, along with specialized software for bidding and managing projects.
Industry Struggles with Technology
It’s no secret that many in construction don’t like to invest in technology: whether it involves estimating software or drones for mapping jobsites. For example, many estimators still use colored pencils and blueprints to quantify and create takeoffs. Even when contractors do invest in technology, they are only willing to do so sparingly. For example, the JBKnowledge ConTech Report has repeatedly found survey respondents reporting that they spend less than 1% of revenue on technology.
Investing in Tech to Handle Growth
What are you risking when you fail to add new, integrated tech tools? Instead of putting your best foot forward when managing client relationships and the bid management process, you may be cobbling together workflows and still relying heavily on spreadsheets, email, and document storage solutions.
No doubt, adding new tech tools can help your construction business keep pace and improve productivity and profitability. Experts say investing in technology — from estimating tools to integrated accounting software — can improve speed, accuracy, and efficiency.
For many contractors, starting small when adopting new technology is a less intimidating prospect. For example, giving up paper time-cards for automated time-tracking software and apps can be a simple switch. From there, firms can start to incorporate digital collaboration tools to begin the process of providing real-time sharing of everything from digital estimates to equipment logs and punch lists.
Benefits of Integrated Tools
Here are some examples of why your construction business should consider investing in integrated tools:
1. Gain a Competitive Advantage — For many contractors, being able to highlight, measure, record, assemble, summarize, price, submit, track, and manage all projects right from their laptops can provide a competitive advantage. Changes during the preconstruction and design phase are also easier to make with integrated tools.
2. Improve Bid Accuracy — Starting a new project bid or budget is much easier when you create databases where all material pricing, production rates, and more are stored — rather than searching through spreadsheets. Since much of what contractors do is very repetitive, being able to pull information with the click of a button is a game-changer.
3. Track Productivity and Protect Profits — Multiple change orders can turn into a lot of extra work and rework, resulting in cost overruns and turning profits into losses. With integrated tools, you can have a plan to track labor production, hours, and costs so you can correct overages on the spot.
Save Time and Money with New Tools
Are your current tech tools integrated or mainly siloed, one off solutions? Transferring data between spreadsheets and keeping up with version control when your tools don’t integrate can be a real stumbling block.
Want to learn more about the benefits of an integrated workflow? Check out On Center’s White Paper, Step Outside Your Comfort Zone: Digital Tech Holds the Promise of Boosting Construction Productivity.