Competitive Bids—Are They Worth It?
Competitive bidding is a process that companies and government agencies use to keep costs low and find the most qualified contractors. Competitive bid projects are often big and exciting, but are they worth the trouble? While the potential payoff is large, so is your company’s time investment to submit these proposals. It’s worthwhile to do a little homework before jumping into the process.
Finding Places to Bid
First things first—where can you find projects to bid on? Federal government opportunities are listed on SAM.gov under “Contract Opportunities.” Local or state government opportunities are listed on individual organization websites, or through subscription-based aggregators such as Periscope or BidSearch. Government RFPs are often more painstaking and (no surprise) have more hoops to jump through than private sector RFPs. Government bids can be worthwhile to pursue if your company has the advantage of a small, minority, woman or veteran-owned designation.
Some private sector companies also use competitive bid processes. The most efficient way to evaluate these requests is to be invited to bid. To receive invitations, become a prequalified subcontractor for general contractors or builders in your area. This is often as simple as filling out an application on their website. Look for GCs that are focused on sustainability and strive for green building certifications such as LEED or WELL. There are also bid management sites that GCs use to find qualified subs. With sites like The Blue Book Network or Building Connected, you can become part of a construction network that receives private sector bid invitations automatically for the services you provide.
Submitting Your Bid
When you receive an invitation to bid, it’s important to understand the structure of the bid. You may be submitting a bid directly to the purchaser. More likely, you are submitting a bid for a contractor who will incorporate your information into a competitive bid of their own. Therefore you must make it through two layers of competition to win the bid. Research the company that is inviting you to bid – find out if they are reputable and whether they have won similar projects in the past. If you can find out which other contractors are bidding the project, approach those companies and let them know you have a bid ready to go. This can increase your chance of winning without much extra effort.
When you are deciding whether to respond to a competitive bid request, make some common-sense observations. Does the purchasing entity have the budget or are they daydreaming? I once received an RFP for a rural Colorado elementary school that spec’d a 200 square foot living wall. I love the idea of plants in schools but it seemed unlikely that the school had appropriate funds. I declined.
Another red flag is limited detail in the project specs. If I see a blueprint with “Green Wall Here” and not much technical information, it tells me the purchaser hasn’t done their homework. They’re fishing for a bidder who will do the design work for free. This type of purchaser will often scrap the feature altogether after you’ve spent a dozen hours on the proposal. Frustrating!
Another aspect to evaluate with competitive bids is the amount of related information you will need to provide. Here are some of the things I’ve been asked for with proposals: three years of financials with tax returns, drug and alcohol policies, D&B numbers, credit checks, background checks, quality control processes, scale models, scale drawings, warranty information, OSHA logs, references, current project lists, alternative product applications and proof of liability/auto/workers comp insurance. The larger the project, the more information will be requested.
Save Time on Proposals
Finally, if your company wants to submit a competitive bid but doesn’t have the time or resources, consider outsourcing. Hire a freelance proposal writer on Upwork or Fiverr. Once you have a polished proposal, turn it into a plug-and-play template you can reuse.
Are competitive bids worth it? The answer is—it depends. You will need to evaluate each opportunity by how much time (or money) the proposal process takes vs. your chance of winning. If you just don’t have enough information, that in itself can be a decision maker. As business owners and operators, our time is a valuable and limited resource. Making informed bidding decisions will save time and increase your likelihood of winning.