July 12th, 2016 Estimating Best Practices Estimating and Bidding Checklist: Five Best Practices Do you regularly lose out on desirable projects because you’ve been underbid? Do you frequently submit the lowest bid among your competitors – only to run into cost overruns once the work gets underway? Here are five best practices to bear in mind as you review your estimating and bidding practices: Bid realistically. Never force a bid – instead, prepare your estimates based on realistic cost and profit projections, not “what the market will bear.” Resist the temptation to come up with a target and then ratchet down your cost estimates to meet it. Independently check all specifications, plans and drawings. You want to make sure everyone is on the same page. If the project owner comes back with revised drawings after you’ve already started the estimating process, be sure your estimators capture all the revised data. Track bid spreads. If you were significantly underbid by a competitor, you’ll want to know why. It can be even more important to track the spreads on the contracts you win. Greatly underbidding your competitors can be a warning sign that you overlooked something important. The sooner you figure out why, the sooner you’ll be able to find a solution. Involve project management personnel in the estimating process. Ideally, the project manager who will be running the job should be involved from the outset. This helps ensure the project manager clearly understands what was promised to the client. An experienced project manager can also provide valuable insights to the estimators. Regularly evaluate past performance. A complete post-project review gives estimators specific information they can use on future bids, rather than relying on general industry standards that may not be achievable in your company. For more information on Sansiveri’s Construction and Related Services Group and how we can assist your company, please contact Jason M. DaPonte, CPA, CIT, CCIFP at 401-331-0500.