OUTSOURCING PRE-CONSTRUCTION FUNCTIONS
The skills required in Pre-construction are best carried out by specialists as they are so varied.
Segments of the industry are always buzzing depending upon which part of the economic cycle we are in. It attracts lots of support specialists wanting to offer services which can be very effective for SME's as they can carry out tasks you are either not skilled at or do not have the time to to do. This guide sets out what makes securing work different to other sectors so that you can spot which specialists, & tools, to use and which ones to ignore.
The guide suggests the roles of the specialists to use, but there is one task which only you can do and which should not be outsourced. That is decide the mark-up. To optimise your mark-up on every project down load our free method on winning profitable work.
STAGE 1 - IDENTIFYING OPPORTUNITIES TO BID
Outside the domestic market, the number of clients, or buyers, is relatively few for projects. The capital cost is prohibitive to engage in building works so there are, relatively few people engaged in the key decisions, and those who are tend to specialise in segments of the market, forming a close community. Your marketing strategy should clearly identify the segments you are to peruse and therefore which communities you are going to be part of.
The other feature of the sector is that there is an abundance of information about projects in the public domain as a result of projects requiring either planning permission and for publicly funded projects the requirement to be advertised publicly to be tendered.
Clients and their representatives do not need to search out companies to do the work, the contractors find them and ask, or offer, to be included on the tender list. Opportunities could be found for free by scouring planning portals or using the government web site for publicly funded projects https://www.find-tender.service.gov.uk/Search
Not surprisingly the long winded searching can be sort cut by using the filters on a paid for service. The four paid for services are Barbour ABI, Glenningan, Builders Conference and Planning Pipe. Each one has it's place in the market depending upon your target. There are specialist marketing companies who will set up the filters on the lead generators for you and then make the contact with the companies involved with the opportunities to find out what information is required for you to be included on the tender list. Alternatively, you can set up the filters and brief a suitable VPA to make the calls.
Some of the lead generator companies include reports about the state of the market, which provides you with knowledge about the latest trends.
STAGE 2 - INITIAL ENGAGEMENT & USING A CRM
You have got your leads, either by trawling information in the public domain or using one of the paid for services and make initial contact. Generally, there are two outcomes of the initial contact. The first is that it is too early and the tender list is not being compiled for some time, or that the list is already been compiled of companies who have been used before.
A contact relationship management, CRM, tool is useful at this stage to keep track of the conversations. Marketing companies, freelance business development professionals or a suitable VPA are all capable of this role. The role titles are often interchanged so you will have to check that the person you appoint to do the role has the right attitude & ingenuity to persist with the exchanges to get on the tender list, either for the project found on the lead generator or the next one the contact has coming up.
Assuming, you get an opportunity to engage further, then the likely next step is some form of screening by the client.
STAGE 3 - PRE-QUALIFICATION QUESTIONS, PQQ
Pre-qualification is a formal stage in a public sector tender. Before you are invited to tender (ITT) you will have to pass the Pre-qualification questionnaire (PQQ). They are usually questions that are about the business, for example, last 3 years accounts, insurances, Safety policies and other policies such as Equality and Diversity, modern slavery. etc.
Having a library of such information is useful. Many businesses their H&S advisors or a QA advisor are asked to put the policies together.
In the private sector, the financial & checks will also occur at this time, but you find that relationships and references also play a significant role, so having case studies available, a web site that will resonate with potential clients and being able to introduce people who will advocate your service is important.
The document library houses insurances, annual accounts, case studies, accreditations, H&S information and other policies. Given the sources of all this information will be different, and different people will require access to it, it is usually best that someone in the business is made responsible for keeping it up to date. The marketing coordination role requires a good understanding of the filing system.
Separate to the library, prospective clients and their agents will look at your web site and social media. Invariably this is out sourced so they need to be kept up to date as to what is happening in the business so case studies are current.
Assuming you pass the pre-qualification questions (PQQ) then you will be invited to tender, ITT.
STAGE 4 - COMPLETING THE ITT. (INVITATION TO TENDER)
Assuming you pass the PQQ, you receive your ITT, the tender documents. In the stages before receiving them you should have ascertained what is involved and therefore have resources ready to put the bid together. In the most complex of bids, there will be a need to coordinate a lot of parties, all of which are usually outsourced: designers, planners, technical bid writers, a graphic designer and the commercial team comprising of those responsible for the take-off, estimating and review of the contract terms and conditions.
A bid responsibilities matrix and programme should be drawn up. All interdependencies should be clear, for example the planner will need to inform the technical writer what to include in the bid. The technical writer and other parties must leave enough time for the graphic designer to create the final document and have it thoroughly checked. To manage the process, especially if there a lot of outsourced parties will require someone to be appointed as bid manager to coordinate the teams and develop a bid strategy.
Owners of SME's often do the bid management themselves and play an active role in the design and estimating, knowing how crucial the price is. Their involvement in the detail at this stage, is understandable given how critical the price is, but often leads to issues as the business grows, as they then become the fountain of knowledge about all projects and the site staff are forever asking them questions. Finding a reliable estimator or external estimating service early on will avoid this bottle neck forming at a later stage.
STAGE 5 - TENDER SETTLEMENT.
The direct costs of carrying out the project are all derived mathematically. To the direct costs a percentage is added for overheads, which should be derived from the accounts and forecast turnover, to give the break even sum. Again this should be a mathematical computation based upon facts and assumptions in the accounts. All these computations can be done by the estimator or a QS.
Finally, the profit is added. The mark up for profit takes account of how much you want the project, the project and contact risks and what the market will bear. Everything except the amount of profit to be added can be calculated. The profit demand is discretionary and will be the deciding factor in whether or not you secure the project. The decision falls to the owner. Very little is written about how this decision is made, as obviously those making the decision do not want to disclose how they do it and often those writing about tendering have never been in the position of making the decision. The Smart Tender Settlement Method we are willing to share with you, provides a logic to the decision which was developed over 10 years of bidding and gaining profitable work.
You can request this method here.
The tendered sum is entered on to the tender sheet, signed and sent off by the required time with any supporting narrative which has been requested and has been prepared by the bid writer.
STAGE 6 - POST SUBMISSION
Once the tender has been submitted, there are invariably clarifications and the final two contractors might be asked to present their bid to the client's team, so they are comfortable that they are entering into contract with someone they can work with.
The contract will be signed and works commence.
If you are a losing party it is worth asking for feedback and if it's a public sector project rules apply about giving the losing parties time to challenge the result.
Regardless of whether it's a public of private client a review of the submitted tender should be undertaken.
STAGE 7 - NEW MARKETING COLLATERAL
Assuming that the project is secured, then a well managed project not only provides another case study to demonstrate experience but there will be opportunities to capture information to put into the quality section of future bids. Compiling case studies and social media information about the project can be outsourced to marketing and PR freelancers, with experience of working with construction businesses.
More importantly, relationships should be developed with all other parties as they can become advocates for you to get on the tender list of future schemes.
Are you interested in becoming a profitable contractor? Looking to get the answer to the crucial question 'How do profitable contractors mark-up tenders'? Then request the method today.
"Submitting a public sector bid exposed us to completing the quality section for the first time. Peter identified resources to cover the new elements of this type of contact and we scored highly on quality with his guidance."