Effective practices in tender management are an important part of successful project delivery, a leader in construction bid management technology says.
In a recent interview with Sourceable, Dustin DeVan, Industry Strategist and Evangelist at design and construction software company Autodesk, said effective management of tender processes was important for builders, subcontractors and project owners.
Prior to Autodesk, DeVan was founder and chief executive of preconstruction software platform BuildingConnected, which was purchased by Autodesk for USD275 million in 2018 and which is currently preparing to launch in Australia and New Zealand.
According to DeVan, a challenge for head contractors involves making sure that subcontractors whom they select have the financial capacity to deliver on the project.
“I’m having a lot of conversations with insurance companies and owners,” De van said.
“They want to know if their project is going to be delayed because there is a potential likelihood that the subcontractor defaults. This is especially compounded when you think about the economics and the cashflow if their projects are going to be delayed because someone was overexposed.”
According to DeVan, mistakes in tendering are common in several areas.
First, there is a tendency for contractors to be selected entirely on a lowest cost basis without adequate consideration of their capacity to deliver on the job.
This can lead to costs and project delays where contractors find themselves overextended.
Instead, De Van says, contractors should be chosen according to their capacity to deliver as well as the value of their bid.
Another problem involves a failure to build out detailed scope sheets that clearly outline the specific items which contractors should include and exclude when submitting their bids.
This can lead to disputes at the end of the project over what can and cannot be considered to be variations.
When conducting tenders, meanwhile, Devan says it is important to cast a wide net to discover new skilled labour. This is important, he says, as trade partners that know they have guaranteed work because of existing, long-standing relationships with GCs can sometimes take the relationship for granted. This can see them cut corners in areas that don’t always leave owners feeling confident their project is being optimized for success.
On a related note, DeVan says it is important to offer a transparent for general contractors during the tender management process. This, he says, puts contractors more in the ‘driver seat’ and reduces long-term mistakes. The approach also keeps GCs from overexhausting subcontractors, he says.
For contractors and subcontractors, meanwhile, DeVan says it is important when bidding to have your team organised and their resumes ready.
He says a large part of winning work involves putting forward teams that have sufficient past experience on similar projects.
De Van’s comments come as Building Connected prepares to launch in Australia and New Zealand.
The platform is a bid management solution which connects project owners, head contractors and subcontractors in a network as well as provides tools to assist contractors and subcontractors to effectively manage tender processes.
According to DeVan, the platform’s network of builders will make it easier for contractors to invite subcontractors to bid for work and will avoid the need to update and maintain contact databases.
On the scoping issue referred to above, meanwhile, the platform enables contractors to create bid forms which clearly spell out line items upon which contractors are expected to bid.
Furthermore, he says the platform will offer a number of specific tools to help parties to effectively manage the tender process.
These include the provision of a single source of truth where tenders, awarded tenders, tender history and contact information and accessible from one place, the ability to discover suitable subcontractors through filtered and personalised search results and the provision of an easy means for subcontractors to submit bids before the due date.