We’re constantly saying, “Don’t undervalue yourself,” and “Don’t submit a cheap tender bid for the sake of it.” It’s a race to the bottom that even if you win, you end up losing out on hard-earned cash.
But what do you do when you submit a tender bid that’s over the client’s budget, but they still want to work with you? Read on to find five proven strategies to consider when your tender bid is too high.
1. Check if the client is serious.
First, determine if the client is committed to moving forward with you. Basically, call their bluff. You’re about to invest time and effort in revising your bid, so you need to know if they’re genuinely interested or just gathering information to share with another contractor.
You don’t want to end up giving them all this insight and information for them to choose someone else. So, have an honest conversation to see where they stand.
2. Offer your advice.
You’re the expert here; you have the knowledge to offer alternative materials or methods to help lower costs without sacrificing quality. Review the project and figure out if there are any areas where adjustments can be made. For example, is there a more affordable material that can be used to achieve the same standard? The client will appreciate your proactive approach.
3. Look for price compromise.
One of your biggest assets is your supply chain. Find out if there’s additional scope for reducing prices or products without compromising performance or quality. This could look like negotiating bulk rates or finding alternatives that meet project specifications without compromising on quality.
4. Focus on Major Build Elements
Look closely at the major components such as plumbing, heating, electrical systems, windows and doors, and insulation. If you can, provide expert opinions or recommendations on these systems by bringing in a trusted specialist to offer insights on the most cost-effective options that still meet the project’s needs.
5. Be Prepared to Negotiate
Be ready to negotiate. This might involve multiple discussions and revisions, so patience is key. Don’t forget you’ll need a commitment from the client that they’re genuinely interested in working with you. Establish clear communication and try to get a commitment that they’re going to work with you and not just pass you by after all that time and effort.
Conclusion
Instead of immediately dropping your bid or lowering costs, consider these strategies to figure out the client’s seriousness, leverage your expertise, engage your supply chain, focus on key build elements, and be ready to negotiate.
If you’re looking for support managing your tenders contact us today at Carroll Estimating to learn how our team of professional QS and Estimators can help you set up a successful site with a seamless process from tender bid to final account.