Electrical Estimating Methods, 4th Edition

CHAPTER 10 Bidding Strategies

It is a fairly common goal among contractors to achieve the highest return for every project dollar—or in simpler terms maximize the profit on every project. Often, this can be done by employing a bidding strategy to obtain work. A bidding strategy is roughly defined as a game plan for obtaining work to bid and ultimately perform. Bidding strategies will vary from contractor to contractor, market to market and range from highly analytical mathematical formulas to the less tangible criteria such as the “gut feel.”

A true bidding strategy can be defined as the skillful application of a wide range of techniques and considerations, timed correctly, to achieve the predetermined objective of securing work that has been competitively bid. This chapter will review some of the considerations the author feels has merit.

THE BUSINESS PLAN

There are few policies more critical to a successful electrical contractor, or any contractor, than how they bid on their projects. A contractor's profitability and even longevity revolves to a large degree on their ability to understand the details of a project, its inherent risk, and to estimate costs that anticipate both. Gross or prolonged misinterpretations of the complexity and risk of a project can lead to financial losses and ultimately business failures.

Bidding strategies are the execution of business development efforts that are carefully focused and consistent. A sound bidding strategy is the result of a carefully ...