Bidding is a topic that is not much discussed in the plumbing field. Even though it is one of the most important skills in the trade. Especially bidding on new construction.
So then, how to bid plumbing on new construction? There is no standard way of doing so. But the most efficient way is to first review the construction site. Accordingly, estimate your equipment and other additional costs. Lastly, add your hourly pay with an estimate of how many hours you need to work on that project.
With such small but effective steps, surely you will be able to post a bid. But in a world with never-ending competition in the plumber’s field, just posting a bid won’t suffice. Your bid has to be both competitive and yet should pay well. There are numerous other factors to consider, and we shall discuss every single one.
How to Bid Plumbing on New Construction?
As discussed above, after reviewing the site and adding up your hourly pay and other expenses, you should get a fairly reliable bid. But there are additional factors as to where we are bidding and what are the usual competitors around that area bidding compared to us.
For example, there are generally two types of jobs we bid for. Either we bid in a Request for Proposal (RFP) or in an Invitation for Bid (IFB). While in an IFB, the lowest bidder is generally the one that gets the job. In an RFP bidding, there are a lot of factors that they will consider before handing over the contract.
Then there is also the fact, who are we bidding for? Is it a government contract? Or a private commercial contract? Generally, a government RFP job is less forgiving than a private commercial job. They want better than the best plumbers to do the job at a reasonable rate.
During IFB too, a government job is harder to acquire than a private job.
RFP And IFB In More Detail
While IFB is a very simple bidding process, where generally the lowest bidder gets the contract. That necessarily does not mean you should take it. There is something called a minimum wage, close to or below, which you should never reach!
True, there may be other plumbing companies that are providing lower bids than yours. But you should never lower your standard of service to meet their bids. Moreover, you should not be underpaying yourself or your workers for that matter. Some contracts are just better left than to be taken part.
Now a brief discussion of RFP. It has a lot more complex and formal approach than an IFB bidding. For both IFB and RFP, you need to document information that includes:
- An outline of your plan and approach toward the project
- Documentation of Time Punctuality in previous projects
- Documentation of previous projects that your team was a part of
- Contact Information
But for RFP, you need to submit a few more additional details and documents to be eligible for the query.
- The Educational qualifications of individuals in your team
- Their experience in the Plumbing Industry
- Timeline Estimates and Timetable
- A brief interview with the contractor
RFPs can therefore be more difficult to accept as a contract. But they do have their pros. While IFB contracts are non-negotiable, RFPs contracts are more flexible in terms of pay. That is, if you can provide adequate documentation and proof that your service may be premium but worth the extra pay.
Government vs Private Contracts
Doing government jobs will certainly increase your reputation in the neighborhood by a lot. But then again, government jobs are highly competitive. So it is always ok if you are having trouble finding a suitable government contract.
On the other hand, private contracts are nothing to scoff about! Doing contracts for reputable private real estate will also make your company’s name shine far and wide.
How to Attract More Job Offers With Your Bids?
Here we shall discuss a few strategies that we can take to secure more contracts that come our way.
Understand Your Customer’s Needs
One of the basic strategies to bid as accurately as possible is to understand the customer’s needs completely. More often than not, the RFP or the IFB form has vague instructions.
Do not hesitate to ask the contractor as many times as possible to figure out their exact need. As it will help you pinpoint your costs and hopefully provide a lower bid than your competition.
As already covered, we have to submit a document with certain information in addition to our bid. Make sure to present it nicely! As giving a sound plan to your approach will go a long way. Also, detail all your costs as it will help them understand your approach better.
Do not forget to add slides and graphs if necessary, as the more detailed your information is, the better. To finish things off nicely, use your document’s aesthetic yet formal background and text style.
Negotiate Your Contract
As discussed above, RFPs contracts are negotiable. Hence make the most out of your negotiation. Do not haggle the pricing to the point that it becomes unreasonable. But do not be afraid to promise certain features and services that you will be able to provide for the right price.
Now the first thing that we need to cover in this topic is to NOT OVERDO IT! Assuring a discount such as taking 2% less payment for the next job will certainly be an eye-catcher. But do not promise a rate that you would not be able to keep.
Just to get the contract, do not end up promising a huge discount deal for your next job under that particular company. As your reputation in that field will be greatly hampered. And in businesses such as plumbing, reputation is much more important than any contract.
Reasons To Increase Your Bid
So far, we have covered picking sensible pricing for your bidding. Now we shall cover when we should be increasing our bid even though our competitors offer better value.
If your organization is located far off from the project, there is an additional transportation cost. Do not be shy to include your transportation cost.
Even though your competitors are not including it as they are located closer to the site. At the end of the day, you do not want to burn all your profit to cover the transportation cost.
Quality Of Your Team
If your team happens to include multiple experienced and skilled workers, pay them accordingly. Many people undermine their skilled workers’ pay to reach a lower bid.
Not only would it discourage them from putting their best at work. It would make your dear workers find work elsewhere where they are better appreciated.
Change Of Materials Pricing
Materials pricing changes constantly. During bidding for a contract, if your desired materials have inflation, include them in your bidding pricing.
You do not want to compromise on your quality of work like your competitors. Even if you fail to get the contract, it is more important to maintain your standard of work.
The 3% Rule
It is a common rule yet ignored by many. It is completely normal to break something, let it be a piece of equipment or something on the site.
That is why it is common knowledge to include a 3% extra in your bidding price for such inconvenience. So that the calculations work out at the end of the day.
So, how to bid plumbing on new construction? In summary, we can say that by accounting for all the additional costs and your worker’s pay per hour, we can easily call a fair bid.
Plumbing surely is a lucrative business. It is only natural to calculate profit and race to bid for the lowest pricing as the priority.
But as a businessman or the head of a plumbing team, before we call our bids we should be considering soo much more than that. We should think and decide with ethics in our hearts.