THE MATH
- If you refer to the Australian Method Of measurement you would note there is a list in the order of 60 trades and when you break down some selected trades in materials supply and then Labour. So this number can easily bell out to 80 trades. There are big and small projects so let’s say there is an average of 50 trades per project.
- The ideal situation is to achieve a cluster of 3 prices to each trade package. (it is harder than you think)
- Now to get a cluster of three prices lets to say we need to get 5 compliant quotes. (even harder)
- Let us say we have a 50% of these trades that tender (for various reasons).
- So we have 50 trades with about ten RFQ per trade and yes 500 subbies to keep track of.
Document ControL system Subbie List
Document control is usually by a proprietary document control system or it is via a number of free APPs that can share links to tender. Either method you need a subcontractor list. As I have indicated above – a subbie list can easily be over 500 names of subbies and suppliers.
Then on the D&C project, you will also have a list of consultants. Keeping up with addenda and tender notes during the tender process can become overwhelming unless your disciplines and systems aren’t rock-solid. The grind of document this part of tender in a stretch even for the most hardened estimator.
Most of the document control systems have the capability to import subcontractors lists. They can create groups where you can assign trades to a particular skill set or even a region. Once you have got the database set up the system, you also have the capability to create “preferred subcontractors lists” so if you have a negotiated tender you can quickly set up projects and sent out tender packages with ease. The systems normally have a contact name for each company as a standard feature so when you send out drawings and addenda the interface is normally personalized and automatic.
These systems do not come cheap and are normally not cheap – so do your research. Large companies have a larger outlay and by default have a large amount of tendering so in this situation a proprietary document control system is a standard and affordable overhead.
Even though you have this database within the document control software – I always suggest you do a backup and create an Excel list of every project.
APP links Subbie List
As I mentioned above the proprietary document control system does not come cheap. On the other hand, document transfer apps are normally Free. Some have really good feature and even if you do need to purchase apps, the outlay is very small.
But if you are a smaller organization or you have a complicated file system to manage – a document transfer app is the way to go. And many of these apps are very easy to use have a reasonable degree of security and with a little bit of thought, you can manage large and small projects. If you have the addenda tender process this can be challenging however if your strategy is partnered with phone calls and good communication.
You rely on and emails and your record keeping is via a subbie list that is manually adjusted and updated. When you send out the RFQ it is in the form of an email with a link. You can send multiple amounts of contacts using the BCC function in outlook however there is an inherent risk that one day you will many an error in your discipline and send out a list that all the competitors could see. This one error could destroy years or relationship building. So do your research.
Your lines of communication MUST be private. If you are tired and you click the wrong button the resultant backlash can be devastating to your tender and future tenders.
SUPPLY LIST STRATEGY
Here is a list of strategies to consider when tendering:
- As an estimator, you want to find a cluster of Subcontractor pricing. A cluster is a group of prices that Are preferably within 10% of each other.
- Then you also want to contact your competitor’s subcontractors so you can understand the market.
- You obviously want to keep you gun subbies away from your competitors.
- You also need to engage your own Contracts team to provide any smarts and about the project.
- Face to face with key subbies that you believe will give you an advantage.
- Your first driver is to get a least one quote in every trade.
- The second driver – is to get (3) quotes in a cluster.
- A phone calls to constantly poll how your subbies are tracking. Everyone needs to feel appreciated and you are asking these subbies to take a gamble on you.
- The “Barebones tender method” relies on your relationships to be able to pull at least one tender per trade. But without a cluster of trades, you carry a lot of risk and stress.
SUPPLY LIST AND YOUR CONTRACTS TEAM
To engage your contracts team is somewhat of a double-edged sword. You can learn little insights into there thought patterns (good & bad). But also extract information useful to the project. You will soon note that the supervisor will harp on about which subbie they what to use and design management issues. Design management issues like we should have designed detail in a different way or programmed some processes differently.
Now all these things are relevant in the correct forum but if you haven’t got a lot of time in a tender this conversation can be like quicksand. As a general rule, all estimator s should get out to the site, even better get your hands dirty.
So trying to keep your contract team happy with the subbie you get to tender – Often your contracts team will have very definite ideas about subcontractors but you still need to strive for the primary goal – a cluster of prices. It is often hard to keep your contracts teams opinions herd and do your job. But when it does – make a big deal about it whilst you can as more than often you cant. You must find a number that is the market. Apologies later when you have won the project and the site team has a job.
Supervisors often forget that we are a business overseeing and managing other businesses to build stuff. Staff on site are often are a heap of Alfa males that are only interested in their world on-site. Generally, they want to use their mate or a subcontractor that is easy for them to manage. This is perfectly reasonable however there is a financial aspect to every project and sometimes you have to procure a trade that needs more managing on-site or less reliable (a known quantity maybe).
Whatever is the reason – having a boys club mentality and using the same subbies is great in the short term but will be the kiss of death to the estimator trying to get other subbies to quote. Eventually, this boys club attitude will kill any business in a competitive environment.
I only have one rule in regards to subbies tendering – Those who tender to get the last swing at the job. If you get a situation where a subcontract knows that will get a second chance to tender if the bid is successful and won’t invest time in tendering – well this is the cardinal sin of any construction company.
In isolated areas – this guideline/rule can be hard, however, if a subbie thinks they have a monopoly in the project well it will eventually hurt everyone missing out on the tender against an out of town subbie that is willing to work and travel. regionally I always get a mix of local and out of town subbies – just to keep the competitive juice burning.
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Tender Process – Click Here