Construction Bidding Software Buyers Guide
Last updated: December 04, 2023
You cannot imagine a successful construction project without a strong bid management process. Very low bids will result in losses and reduce profitability, while very high bids may put your job at risk. This shows why your decision to bid on a project shouldn’t be taken lightly. Using a bid management software will help streamline and automate the manual process of creating and submitting bid proposals. General contractors can easily collect bids, distribute information, and track coverage within a unified interface.
When looking for a bid management system for your construction projects that will let you increase profit margins and improve bid management processes, you need to know exactly what to look for. This guide will present a framework, one that would help construction businesses align their bidding needs with the most appropriate service provider. We will walk you through the core benefits of bid management software as well as point out the essential features you should look for when purchasing these systems. The guide will begin with a brief overview of the construction bidding process and then delve into the key factors for choosing the most suitable vendor. Overall, it will help you make a more informed purchase decision.
What you'll find inside:
- What is construction bidding?
- Understanding construction bid management software
- Benefits of bid management software
- What type of buyer are you?
- Tips on how to identify your needs
- Common features of a bid management software
- Specific features to look for
- Cloud-based vs onsite
- Assessing the expenses
- Potential Challenges
- Popular bid management software
What is Construction Bidding?
Construction bidding is the multi-step process of submitting the tender to a potential customer as a proposal to manage or build a particular construction project. The bidding process is one of the most essential components of a construction project. General contractors and subcontractors submit proposals to complete tasks under a specific set of terms. Construction bidding also allows general contractors or project owners to send bid invitations to subcontractors. The construction bid invitation includes details, such as pre-qualification requirements, scope of project, completion deadlines, and penalties on non-completion.
Understanding Bid Management Software
Construction bid management software streamlines and automates the entire preconstruction process. These software systems perform tasks like creating, managing, and tracking bids. You can easily send invitations to bid, share project documents, track compliance, prequalify subcontractors, and compare proposals from start to finish. These technology-driven products house all the necessary bid and project documents in a digital format that is easy to review, share, and compare. Built-in collaboration capabilities enable you to communicate with all the stakeholders, from executives to the team members, in one place.
Benefits of Bid Management Software
The key benefits of bid management software include, but are not limited to:
- Increased productivity & efficiency
- Better accuracy
- Simplified bid management
- Strategic decision-making
- Lower IT costs
- Consistent estimates
- Prequalification of contractors
- Access to real-time data
- Document control
- Efficient bid coverage
- Interdepartmental collaboration
- Reduced the risk of duplicates
- Simplified stakeholder management
- Remote access
- Easier collaboration and sharing
What Type of Buyer are You?
Before you dive into the details of different bidding software construction companies, you'll want to understand what type of buyer you are.
General contractor: General contractors belong to the buyer category where the buyer is concerned with every aspect of the construction procurement and estimation process. Hese buyers work to get high-level pricing from subcontractors and then compare those bids. Typically, general contractors prefer using the basic solicitation management and tracking functionality included in the commercial estimating systems.
Project managers: Construction project manager is the buyer category where the buyer is primarily concerned to manage the project management tasks, such as document management, project scheduling, job cost estimation, and cost control. More often than not, these buyers prefer to opt for the construction bid software systems that are offered as part of a more generic construction project management solution.
Procurement buyer: This buyer category is trained specially for sophisticated functionality and procurement processes. The company they work for focuses intently on sophisticated functionality and prioritizes efficient procurement and cost control processes. Procurement buyers typically look for the best-of-breed bidding software construction companies and products.
Goal Setting: Areas You Want to Improve
Although there are some common problem areas for all construction companies, the reality is that every firm has its own set of challenges and problems that hinder growth. So, before you begin with the process of evaluating bid management software vendors, you should first and foremost understand why you will be using it. Set effective goals and figure out how you can utilize the bidding software in a way that will increase profit margins and help you win more bids. You can also create a list to check the requirements you want in your bid management system. After all, you don’t want to end up with a tool that doesn’t work for your problem areas.
Define Your Current Problems Before Seeking a Solution
To ensure successful software selection, you need to be certain of the shortcomings in your current processes and highlight the areas that need improvement. You should evaluate all your bid management tasks to see where they fall short. Discuss this with your project team who deals with these processes on a daily basis; they will quickly be able to tell what needs improvement. This will help you choose the best bidding system.
Vendor Shopping: Features to Look For
So, you’ve determined the bidding needs of your construction business? Now it’s time to find a service provider that perfectly aligns with your unique requirements. Keep a few product essentials in mind as you evaluate the shortlisted options. The right bid management software will offer all the tools you need to streamline your current bidding tasks while also promoting your subs’ adoption of technology. Conduct due diligence to make sure that you don’t sign up for a product that causes problems for your workflow or lacks any fundamental features of bid management software.
Construction bidding software systems come with a variety of different features, depending on the features you need from the software provider and type of your construction business. Make sure that the bid software you choose to implement for your construction business lets you track your bidding process through all phases before you lock yourself into a contract with the software company.
When considering bidding software construction companies for your projects, be sure it comes with the following features:
- Bid Discovery Tools
- Response Filtering
- Portfolio Tracking
- Submission Interface
- Automated Roll-Ups
- Outreach Tracking
- Document Management
- Subcontractor portal
Bid Discovery Tools: The best bidding system helps users identify bid targets with internal and external tools. It offers search tools to access subcontractor networks and find bid subcontractors. The subcontractor networks help users in finding bid invitees.
Response Filtering: This filtering tool is a must-have for removing the bids that don’t match the contractor’s required criteria, like union status and insurance coverage. Such functionalities prevent users from wasting time on checking bid submissions that don’t meet the criteria.
Portfolio Tracking: Portfolio tracking is one of the staples of a bid management software. It allows users to view their portfolios and upcoming bids. They can also develop understanding of the response rates and key indicators across bidding processes to allocate resources and generate the data.
Submission Interface: One of the best features of bid management software is the submission interface tool. The construction bidding software you choose should support submission portals that enable users to remove the extra step of gathering responses in a standard format.
Automated Roll-Ups: Automated roll-ups feature helps users in automating the roll-up calculation so that they can easily calculate vendor costs. This calculation is performed for a number of what-if situations and subcontractor combinations.
Outreach Tracking: Most bid management systems offer features that let users measure and track outreach efforts in order to find out which efforts to solicit bids are working and which ones are not. You can also get a free demo of bid management software to evaluate this feature in real-time.
Document Management: Construction bid management systems also let users record, store, and share document versions digitally. Since the bidding process requires you to generate different documents internally, keeping track of all those valuable and updated documents becomes absolutely necessary.
Subcontractor portal: This allows subcontractors to access information about project insurance, view upcoming projects, and more.
Assessing the Expenses
You have to consider various aspects before buying a construction bidding software. The first thing you need to look at is if your current construction project management system comes pre-equipped with construction estimating and bid management capabilities. If that’s not the case, then you should look for a system that is designed especially to meet the bidding needs of a construction business. The cost of purchasing such a software varies according to the following factors:
- Number of users supported
- Implementation processes
- Customer support
- Contract terms
The pricing for bid management software systems typically range between $30 and $250 per month per user. Some free tools and templates are also available, but most of the products that support advanced functionalities come at a cost.
Most of the issues that come with implementing new bid software center around adoption. Internal users may adopt the invitation to bid software, but getting suppliers to respond to the new model of submitting bids can be challenging. To avoid this problem, contractors should see if they have enough leverage with suppliers and subcontractors to mandate the use of the system. Properly implemented bid management systems can be your silver bullet for increasing profit margins and improving bidding processes. But contractors should check out software reviews, pricing, and demo before purchasing any software products.
The Top Bid Management Software
The following integrated construction bid management software systems have positioned themselves as market leaders:
- B2W Estimate
Choosing What's Best for Your Company
The bidding process is of pivotal importance for every contractor and construction business. This is something that requires accurate management as it can make or break your business. The best bid management software will help you improve the bid-to-win ratio and ensure that your processes for soliciting bids from subcontractors remain efficient. You should know what exactly you want from a software before you lock yourself up in a contract with the vendor. Or else you will end up paying for a Ferrari when all you needed was a basic wagon.