Bidding on contracts has proven to be a profitable means for a firm to secure a long-term work. But the entire bidding process can seem overwhelming if you’re ignorant of its structure. Understanding the art of contract bidding can help your company compete better for contracts and also help you succeed. With that said, this post will take you through the basics of bidding on contracts so you understand the process that can get you that much-needed contract.
So let’s get started!
First, contracts can range from being a product/service provider for a private larger conglomerate, to providing construction works for government agencies. While contracts from private firms may be less competitive, Government contracts attract a lot of bidders and are extremely competitive. It is also a slow process and may take years to decide the company who has won the bid. Notwithstanding the type of contract, the bidding processes are relatively the same.
Contracts bidding is a competitive game, and must understand how you can outbid other bidders that want the same contract just as you do. Most times, the bidding company with the best strategy, record, and players wins.
Research and Planning
Before you bid for any contract, you will need to first make some research and planning. Find and bid only for projects that align with your company and her market area. Of course, you will need to have rich practical experience in your field.
See your business plan as a resource. It must show how perfectly fit you are for the contract and your position in the crowd. This might require that you research the company you are bidding on, and use all the information you can gather to personalize your bid to suit their project requirements.
Understand the Bid requirements
Your failure to understand what the contract entails and its requirement can lower your chances of a successful bid. Read the contract request carefully to know what is expected of your company and the time frame of the project. If the specification of the project requires that you submit a bid bond with your bid, then get a bid bond from a bond company.
Now that you have done the research works and fully understood the bid requirements, the next thing is t put your contract bit together. Your bid must cover what makes you standout and how you plan to execute the job if you are contracted. Include a list of important sub-contractors and personnel and their portfolio. Include how you intend to meet the project requirements. If the project has phases, separate your bid by each of these phases and list all the key time frames. Note that the bid is often the first contact your firm will have with your potential customer, so it is advisable you demonstrate your credibility. Add any documentation, such as proof of insurance as well as all certifications you have earned.
While you might think that anyone that reads your bid will skip the details and go straight to the bottom, it is simply not the case. Companies these days understand better, and do not base their decisions only on the bid cost. Companies that offers the lowest bid for a project does not always win. Low-bidding contracts tell the company you are bidding on that the proposal is submitted by a company who’s not willing to make a profit or likely to cut corners.
While you foresee your competitor’s estimated bid, try not to under bid the contract to the point that it is no longer profitable. You must consider the costs of labor, materials, supplies, equipment and time – and your profit margin. Break down the estimate and include cost overruns for contingency. Make the estimate as detailed as possible for transparency and to makes it easier for the awarding company to compare bids.
Your plan should start with a summary of your company’s relevant profile and why you should be contracted. While you can submit hard copies of your bid to the department concerned, there are several other ways you can make this happen. Most governmental agencies have an online platform where you can upload your contract bill for consideration. If this is the case, ensure you familiarize yourself with the platform to understand how it works, and that your bill is submitted correctly.
In the private sector, however, you might not need to submit your contract bid to an online platform. Most private companies will expect you to submit your bid to a cloud server for easy distribution. However, make sure you first check the submission requirements as some stakeholders may prefer hard copies.
Overall, make sure you follow the company’s bid submission guidelines as stated. Of course, you would not want to make any last-minute mistake that will jeopardize all your efforts or make you look unserious.
So what next?
After you have submitted your bid, the next thing is to wait for their invitation. If you are lucky to be invited to meet with the company, then congratulations! You have just cleared one big hurdle, but not the finish line. The essence of the invitation is to present your pitch and meet your prospective client.
While the usual approach is to meet up with the company, you can still make your presentations via some video-conferencing applications. The latter might be needed if the company you are bidding on is located far away, busy, want to keep everything digital – or due to a pandemic, like the covid-19.
Notwithstanding where the meeting will be held, the most important thing is that you’re fully prepared for any questions they might ask. The fact is that you will be asked a lot of questions.You may also find yourself negotiating the bid price; so be prepared to adjust accordingly.
Furthermore, make sure you know when the company makes their final decision, so you won’t have to spend any extra energy or time on a lost prospect. And if your company is eventually picked, then congratulations. You’ve just got one more client!
One more thing. There is a possibility that the awarding company will want you to start immediately. But I will suggest you communicate with them and see that you are both on the same page – and that the work is scheduled to suit their specifications.
Bidding on contracts is easier when you know the type of contract you are bidding for. The better you can handle the project, the more likely you will have a long relationship with the awarding company for future projects.
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