Winning construction bids is the lifeblood of any subcontractor in commercial construction. With increasing competition and tight profit margins, it’s more important than ever to have a strategic approach to bidding that maximizes your chances of success.
This article outlines key strategies and tips to help you win more construction bids this year. We’ll cover critical factors like how to find quality leads, manage risk and leverage technology to work smarter, not harder.
Whether you’re a seasoned subcontractor looking to improve your bid win rate or just starting out, this guide will provide actionable steps you can take today to win more bids for your business this year. Let’s get started.
7 Ways to Win More Construction Bids in 2024
To boost your bid win rate in 2024, focus on these 7 key strategies:
- Find quality leads
The first strategy for winning more bids is focusing your efforts on quality leads.
It’s tempting to want to bid on every project that comes along, but this scattershot approach rarely leads to success. Instead, be selective and only bid on projects that are a good fit for your company’s skills, capacity and geographic range.
- First, do your research on the general contractors (GCs) and developers that routinely put out projects in your specialty area. Get to know their bidding processes and requirements so you can tailor your bid packages specifically for them.
- Next, spend time nurturing relationships with those most likely to award you work. When a relevant project does come up, you’ll have all the details you need to put together a compelling bid.
- Platforms like The Blue Book can help you find quality leads by providing highly targeted project listings with key information like budget size, bid due dates and scope details.
Focusing on quality leads reduces wasted time and helps you concentrate your efforts on bids you have the highest chance of winning.
- Find the right projects
The second key strategy is identifying the right projects to bid on.
Bidding may feel like a numbers game, but it’s critical to only bid on projects your company can execute well. Doing a poor job is far worse than not winning a bid—your reputation is everything, after all.
Vet potential projects thoroughly to ensure your skills, capacity and resources are a good match. Be realistic about your bandwidth so you don’t overextend yourself across too many projects.
We recommend developing a standardized process for quickly assessing if a project meets your criteria, including profit margins, contract terms, project timelines and level of risk or liability. If the math doesn’t make sense or the project scope changes significantly, don’t be afraid to drop out of a bid rather than sacrifice quality or take on unnecessary risk.
With experience, you’ll get better at qualifying leads and identifying the right project opportunities worth bidding on. Don’t dilute your efforts by chasing every lead—be selective and play to your strengths.
- Review profitability
The third strategy is taking a hard look at your profitability on bids to find areas for improvement.
Regularly review your budgeting and forecasting process to ensure you are bidding competitively but profitably. Ask yourself the following questions:
- Am I basing quotes on accurate, up-to-date cost data?
- Do I include all job costs (labor, admin, equipment, etc.) in my estimates?
- Does my pricing model account for risk factors and contingencies?
- Are my overhead costs distributed appropriately across projects?
Aim to find the right balance. Underquoting can signal a lack of experience, which can be a red flag to some GCs while overquoting isn’t a good look either.
Benchmark your competitors to determine what GCs will bear. If your quotes are routinely substantially higher or lower than competitors, it might be time to recalibrate your estimating process. Build contingencies into your quotes but don’t pad excessively.
Investing time into sharpening your budgeting will pay dividends in winning bids without eroding your profits.
- Identify and manage risks
The fourth key strategy is proactively identifying and managing project risks when putting together your bid.
Construction projects inevitably involve uncertainties that can impact costs and profitability. But failing to properly plan for these risks can make you look bad—not to mention cost you time and money.
Be aware of common risks like:
- Permitting delays
- Defective plans or specifications
- Poor site conditions or access issues
- Schedule delays from weather or labor shortages
- Cost escalations for materials
In your bid proposal, demonstrate your experience and capabilities when it comes to managing risk. Here are some ideas to get you started:
- Include a specific section or appendix outlining your risk management approach. This will show the GC that you’ve seriously considered potential risks.
- For each major risk identified, describe your mitigation tactics. For example, for the risk of permitting delays, you could have contingency plans for resequencing work tasks.
- Provide projected cost and schedule impacts for quantified risks. This helps justify any risk-related contingencies built into your pricing.
- Emphasize your proven experience successfully managing risks on past projects similar in size and scope. Refer to specific examples if possible.
Most importantly, be willing to walk away from excessively risky projects that don’t make fiscal sense despite pressure to win the bid.
- Consider material costs
The fifth key bidding strategy is accurately accounting for materials costs in your estimates and budgets.
Materials like lumber, concrete, steel and finishings often represent a major portion of total project costs. With the potential for significant cost fluctuations, you need a plan for estimating and managing these expenses.
For specialty subcontractors, focus on costs for your niche, like electrical, plumbing or HVAC equipment. As you prepare your bid, thoroughly research current market rates for needed materials using resources like industry journals, supplier quotes and commodity pricing indexes. Identify materials with high price volatility that may require contingencies.
For large material purchases, explore options like bulk discounts, supplier contracts or early commitment to lock in pricing.
In your bid, demonstrate how you will monitor market price movements during the project and adjust purchasing decisions accordingly. Providing detailed explanations of your material cost assumptions and management strategies gives the GC confidence you have a handle on controlling expenses.
With strong materials cost planning, you can submit accurate bids without padding estimates unnecessarily due to market uncertainties.
- Understand your bid-hit ratio
The sixth key strategy is tracking and optimizing your bid-hit ratio.
Your bid-hit ratio is the number of bids won divided by the total number of bids submitted for a given period. To calculate, simply divide your total wins by your total bids for the month or year.
- For example, if you submitted 20 bids and won five projects, your bid-hit ratio is 25% (5/20).
A low ratio (less than 20–25%) often indicates room to improve your qualifying and bidding approach. Review your wins and losses to identify patterns in project types, clients or value ranges where your hit rate excels or falls short. Look for ways to refine your focus toward projects and clients where you have historically higher bid-hit ratios.
- For example, you may choose to pursue more healthcare facility projects if you won 80% of those bids last year.
Avoid spreading yourself too thin across different markets where you struggle to compete. While it takes volume to win bids, submitting proposals unlikely to win won’t improve your ratio.
Analyzing your bid-hit ratio over time can reveal when and where your bid strategy is working. Equipped with this valuable data, you can concentrate resources on quality bids with better odds of success.
- Follow up
The final key bidding strategy is consistent, professional follow-up.
Following up post-bid to check on the decision status shows you are eager for the GC’s business. However, when done wrong, too frequent nagging can make you seem desperate rather than politely interested.
The most effective follow-up frames your inquiry in an effort to proactively schedule crews and material orders months in advance to provide excellent service if awarded the project.
Ask if they need any additional information to support choosing your company. Offer to make yourself available to the contractor to discuss your bid in more detail. Resist the temptation to directly ask if you got the job, but make it clear you are ready to mobilize and start planning the moment they give you the green light.
This kind of courteous inquiry demonstrates responsibility and maturity while demonstrating your commitment to the contractor’s needs. You’ll be able to hit the ground running if you win the bid while strengthening relationships even if you lose.
Use Resources to Keep Your Bids & Contacts Organized
In today’s digital age, subcontractors need to leverage all available resources to work smarter, not harder.
The right platform works cross-functionally, allowing you to:
- Increase your business exposure by showcasing your experience and expertise
- Build relationships with decision-makers and trades in your geographic location
- Efficiently identify and qualify the right opportunities among a variety of projects
- Save time organizing deadlines and following up on submissions
A tool that centralizes all these capabilities lets you focus your efforts on high-quality projects, strategically submit your best proposals, and ultimately win more bids with less wasted effort and money.
Win More Construction Bids with The Blue Book
Implementing these proven bidding strategies sets you on the path to winning more construction projects this year.
However, executing these tactics requires a platform to bridge the gap between the bidding process and finding the right projects, people, firms and products. This is where The Blue Book comes in.
The Blue Book is the largest directory of project decision-makers, subcontractors and other service providers in the commercial construction industry. With a nationwide network of over 1 million commercial construction businesses across all specialties and trades, we make it easy to find qualified partners and advertise your company, services and projects to win more bids and keep your business thriving.
When you combine smart bidding practices with Blue Book’s capabilities, you gain the tools and technology needed to get more quality leads, refine your focus, and ultimately win more bids in 2024.
Let The Blue Book take your business to the next level of success. Join today.