Boldly follow a strategic process, not the superficial prize, daily

CMC Network

Most of our industry operates from an “eye on the prize” mentality, rather than how we set ourselves up for the greatest prize. 

 

Getting the greatest prize starts well before boots are on the ground.  Your greatest opportunities in the Construction industry is to flip your focus. 

 

How Pre-Construction is laid out and planned impacts the way a project runs and the level of success across the board.  First, we will take a look at estimating and bidding.

 

 

Developing the Bid

Estimating a project as accurately as possible, given the information provided from the CM or GC, is the best way to set ourselves up for success.  There are many things that ought to be considered and included in a bid.  

 

The estimating portion is a first step; take offs and unit rates, lay some groundwork, but are not the end all, be all.  Critical items to be in cluded as part of a bid are:

                  • Production schedule
                  • Assumptions or gaps in drawings or scope
                  • Staffing and manpower requirements
                  • Overhead requirements 

 

 

The production schedule is the schedule in which the CM or GC is expecting to turn over parts of the project to the trades and eventually turn the project over to ownership (i.e. two floors a week of sheet rock).  When building your bid ask yourself; is this realistic, can our company meet this schedule, does the sequence of work allow for this schedule?  To meet this schedule, what type of staffing and manpower would be required?  The answer to this will impact your bid number.  The overhead costs to run a job also need to be accounted for.  What are the office resources required to manage the project?  Accounting, administrative work, project management, etc.  

 

 

Gaps in scope and/or drawings is another area of imperative consideration.  Has the CM/GC explicitly called these gaps out?  If not, look closely to identify any and bring them up to the CM/GC.  If they have provided some, are there more?  How are you quantifying the gaps?  What allowances are you carrying for them?  Identify how you are articulating these gaps and the assumptions made around them.   Provide added value to the CM/GC by documenting questions around gaps and design, and proactively suggesting value engineering options.  One thing to pay particular attention to with this is the impact on adjacent design when something is changed via value engineering.  Do the leg work to confirm compatibility.  

 

Construction Bidding CMC Network

 

Input

Next, it’s time to get input.  Similar past projects are a great resource when creating a bid.  Things to consider; how did we price that project?  Were we successful with that pricing strategy?  Did we staff it well?  Did we hit our profit margin goals?  Utilizing your foreman while developing a bid will provide unique insight.  Foremen live the jobs.  They know the ins and outs, the reality of sequence and schedule, how many people and what level of skill are required for a job.  Find out what it really takes to mobilize and demobilize.  Tap into this resource during bidding and you’ll be doing something nearly no one else does!

 

Lastly, take the time to analyze conditions.  What are the current and projected market conditions?  Is construction activity on the rise or decline?  Are material costs expected to increase, or in today’s case, remain escalated for the foreseeable future?  What about the pipeline for skilled workers?  Is that healthy or will it be a struggle to retain staff and procure more?  Another condition to review is the company’s goals.  Does this project align with the company’s goals for the next year or two?  If not, are we in a position to say no to the project? Are we staying true to our mission?

 

Once a project is won – celebrate!  And then get to work again.  Establish a strategic plan for successfully completing this project.  Plan all required shop drawings and submittals and their timelines.  Map out the schedule and work backwards to identify when materials must be procured to be on site, on time.   Create a road map for site mobilization and staffing requirements throughout the life of the job.  Conduct a meeting with the estimating team and the project team (project manager, foreman) to review the budget and scope, and how estimating got there.  This intentional hand off prepares the field team and will give you an advantage on competitors.  

 

Throughout the Pre-Construction process, continually ask yourself two questions;

How can we provide the greatest value to our client (CM/GC)?

How are we setting ourselves up for the most success? 

 

Asking these questions along the way will serve you and your company greatly and positively impact your bottom line.  And remember to always under promise and over deliver!

Author

  • Hannah Franklin has worked in new construction real estate development for over 10 years in New York City on projects with budgets ranging from $100-$550 million. She focuses her work on quality management through business process improvement, cross-functional team management, product value engineering, streamlining operations, quality control and quality assurance, impeccable customer service, contract management, and schedule and budget management. Hannah is passionate about organization, streamlining and efficiency. hannah@loopconsultinggroup.com

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