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energy into prospects that are relevant
to your core business.
Capacity to complete the job on time
is crucial, as the threat of liquidated
damages could well put you out of
business. Also, consider the ability of
your suppliers and sub-contractors to
comply with the time frame.
Many contractors have suffered
financial disaster based on the
belief that it’s easy to pick up the
necessary labour. This may be OK
when increasing your workforce by
10-20%. However, when temporary,
itinerant, or ‘loan’ workers outnumber
permanent staff, efficiency and
productivity suffer badly.
Similarly, if you need to hire the tools
and equipment for a long-term project it
may price you out of the job.
On a larger than normal project
the handling of extra workers, co-
ordination of materials and equipment,
and management of transport can be
extremely time consuming. Without
trained administration staff, this can all
be very costly.
I have seen several contractors
winning a major project that required
a huge increase in the workforce. They
lost thousands of dollars through lack of
experience in project management.
Many contractors say they are
prepared to travel anywhere, and this is
not a big issue if the costs are allowed in
the estimate.
However, it may be a totally different
matter to transport large items (main
switchboards, generators, chillers, etc.)
to the site and provide lifting equipment
for unloading.
Furthermore, workers may be
committed to working on a distant site
in the beginning when everyone
is enthusiastic. But if the project is
long term, the enthusiasm can wane
and maintaining the workforce becomes
a nightmare.
Incumbent contractors have a decided
advantage over outsiders, unless they
have blotted their copybook. This is
where you need to know the strengths
and weaknesses of your competitors.
Your senior staff members must be
committed to the tender and should
have the necessary performance record,
experience, qualifications and resources.
Being able to provide details of
estimate inclusions and exclusions will
make the installation team far more
efficient. This will also help the project
manager to deal with client questions
and to know when a request becomes
a variation.
On some projects the delivery and
storage of materials and equipment is a
major issue, especially in urban centres
where storage space is almost non-
existent and deliveries cannot be made
during normal working hours. On the
other hand, highly secured industrial
sites require meticulous checking of
all personnel, material and equipment
movements, which can add hundreds of
hours to a job.
Many contractors fail to read the
payment clause in tender documents.
When submitting a progress claim
they may discover that payments are
made quarterly.
This is not of great concern if
the contract is for light and power
maintenance involving half an hour
per week. However, if it is a sizeable
installation with a substantial work
team on site, the estimate would need to
include a realistic loan interest rate – or
you will be financing the project.
It may well be a good reason not to
submit a bid.
In conclusion, it is not good business to
bid for a project if it will take focus and
resources away from your main source
of income, which needs to be preserved.
You need to consider how any new work
will affect the bottom line.
If you decide not to bid on an invited
tender, it’s a courteous gesture to send
a letter to the relevant person stating
your reasons, for example:
>
Capacity constraints on meeting
delivery dates
>
A fully committed workforce at
this point
>
Insufficient time to prepare a
quality proposal
>
The project is outside your scope
of work.
The letter should include the following:
>
The tender reference
>
A clear statement that you are not
submitting a proposal
>
The reasons for declining
>
A statement of interest regarding
future opportunities.
It’s good business to send the letter
to the tender originator, otherwise
repeated ‘no bid’ decisions may exclude
you when the project does suit your
work schedule.
Finally, a word of warning about
construction developers who want the
tender price early. Are they shopping
your price around? You need to have a
‘bid day’ strategy ensuring that there’s a
closing time and all bids are secure.
Industry consultant Brian Seymour,
MBE, is the author of
Electrical
Estimator’s Labour Unit Manual
,
Starting Out
,
Electrical Contracting in
Australia
and
100 years of Electrical
Contracting in Australia
. He conducts
regular training programs throughout
Australia on behalf of the electrical and
air-conditioning sectors.
Winning a contract involves so much more than
creating an attractively presented submission.
BY
BRIAN
SEYMOUR