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Construction Bid Victories: Price or Compatibility?

While Im known in the public infrastructure sector for my specialisation in non-priced-based bid processes, I remain keenly aware of issues in the indus...

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|Jan 31|magazine11 min read

While I’m known in the public infrastructure sector for my specialisation in non-priced-based bid processes, I remain keenly aware of issues in the industry’s price-based bidding sphere.

I also remain keenly aware that bidders attribute too many bid losses to “being beaten on price”.

Some years ago, Microsoft and one of its CRM software partners conducted a survey of UK construction company executives. These executives were asked why they though they lost bids – and why they thought they won them.

In almost every instance, these seasoned industry representatives believed their tendering victories were due to the outstanding job they had done when it came to understanding the client and the specific requirements of the project. But these same respondents believed the only reason they ever lost a bid was because they came in too high on price!

Let me tell you one of the reasons for this flawed logic. In my experience, there is a reluctance by bid teams to admit that maybe they lost to a competitor not on price, but because that competitor had done its homework more thoroughly . . . whether by virtue of relationship or by virtue of background research.

As a bid strategist, I see it as a very simple equation:

The more thoroughly you’ve gotten to know the client organisation and the backdrop to the project, the more chance you have of lining up your strengths with the (often intangible) requirements of the client and the project.

The more deeply you understand your client’s world and issues, the more opportunity you ultimately have to demonstrate your all-important compatibility with the client organisation, its culture and the project objectives.

To achieve this, you need to go beyond the technical specifications, selection criteria and other requirements of the client’s Request for Tender (RFT) documentation. You must also understand the critical subjective and emotive factors at play in the client’s decision-making process.

Here’s a Simple Fact

The more high-quality questions you ask and the more information you seek (preferably pre-probity), the better your position when you sit down to produce your bid.

Sound obvious.

But - while for design, construction and other engineering discipline professionals, interpreting the technical requirements of a project is “second nature” - the client’s world is far more complex than the specifications and selection criteria cited in the RFT documentation. It’s an environment flavoured by stakeholder politics, past experiences and future visions.

Here are three powerful starting points to help you assemble a picture of that broader environment:

  1. Where Have They Been?

Not many $1+ billion construction/public infrastructure projects get to RFT stage without substantial debate and political history. You need to go beyond today’s headlines.

Have you trawled through and studied every single related policy / background document you can lay your hands on? The less glamorous side of the business development process, this makes for a genuinely deep understanding of the client’s unspoken influences.

It’s the sort of knowledge that hits hot buttons and quells fear factors, if you know how to align it with your own strengths.

  1. Where Are They Going?

If it’s a public sector project, how is the societal role of that client organisation evolving? What are the community forces being brought to bear upon it?

If it’s a private sector client, what’s happening in the commercial environment in which it functions? What trends and predictions are shaping its future?

Are the client’s (short and long-term) organisational plans known or available? What implications exist within these for the future usage or public perception of the project?

  1. Who Are They?

Every organisation has its own unique culture.

Why is this relevant to you, the bidder? Because – inherently – the client organisation knows the ways in which they’re easy – and the ways in which they’re difficult – to work with (even when they won’t admit to these factors).

You need to (diplomatically) give them due comfort that you will maximise the benefits of the former, while accommodating the latter.

Whatever the focus on budgetary issues, one thing is certain:  The bidder that demonstrates it can work the most effectively (and painlessly) with the client parties will be looked upon with great favour.

 

Jordan Kelly is a bid strategist, writer and coach/trainer. She is the author of a growing selection of books (including her flagship, 'Think and Win Bids') that help construction industry executives position their organisations successfully for high-value bid wins. Claim your free subscription to her fortnightly electronic newsletter, 'The Bid Strategist', at www.bidstrategist.com