Commercial Construction Bidding: An In-Depth Guide to Processes, Procedures, and Best Practices

Did you know that The Empire State Building was built using a construction bidding process? The Carret brothers and Eken are the general contractors who won the bid by claiming that they could build it in 18 months .

The concept of construction bidding has come a long way since then, but the main principle remains the same, which is, finding the best person for the job.

Now, it’s important to understand how commercial construction bidding works. Keep reading to uncover what it entails and the strategies behind successful construction bids.

How Does Commercial Bidding Work?

Imagine you want to build a castle, but you can’t build it yourself. You have to look for help from contractors or construction companies to help turn your dreams into reality, right? 

Commercial bidding, like construction bidding, is like a game where different businesses send their proposals (tenders) competing for projects or contracts. It’s a process with several phases where contractors compete to secure lucrative commercial construction projects in a highly competitive construction world.

Types of Construction Bids 

When a project owner or their representative is ready to receive bids from contractors for their upcoming project, they embark on a crucial step: preparing and releasing bid documents. These documents outline everything about the project from requirements, and specifications, to the bidding method. 

There are three types of construction bids: open, selective, and negotiated. 

Open bidding

Open bidding is the most competitive. It opens the door to every qualified contractor to submit bids. It’s mainly used for public or government projects.

Selective bidding

Selective or invite bidding allows the project owner to invite a select number of prequalified contractors based on expertise and experience.it’s typically used in private projects where the owner prefers to work with specific contractors or if the project is too complex that it requires specialized expertise.

Negotiated bidding

Here, the owner directly negotiates with a single contractor to determine the terms of the contract. A negotiated bid is generally considered anti-competitive, and it’s generally reserved for complex projects where the owner prefers to have a close collaboration with a contractor.    

What Are The 5 Phases Of The Construction Bidding Process?

Construction bidding process involves 5 key phases to ensure a fair and transparent selection of the perfect commercial contractor to bring a client’s vision to life.

Let’s explore each phase in detail:

1. Preparation of Bidding Documents

Bid preparation in construction is where the project owner lays all the groundwork for a competitive and successful bid. This phase involves the following:

Project Description 

• What do you need?
• What are your expectations?
• What does success look like for this project? 
• What do you need to see the project through to completion?

When you have the answers to these questions, you can come up with a detailed guide on what you want and hope to accomplish - including an outline of the scope of work, specifications, expectations, budget, and timelines.

Crafting Bidding Documents 

After having a clear understanding of the project description, the next step is to draft clear, concise, and legally compliant bidding documents. These documents can either be an Invitation for Bid ❲IFB❳, a Request for Quote ❲RFQ❳, or a Request for Proposal ❲RFP❳. They should outline the following:

• The project plan should be broken down into tasks and deliverables
• A plan to give contractors a clear understanding of what’s required
• Budget and cost estimates
• Terms and conditions of the contract
• Pre-qualification criteria plan
• Instructions on how to prepare and submit bids

2. Advertising and Solicitation of Bids

There are two ways to go about advertising bids: private and public. In private advertising, the project owner sends out bidding documents to a specific group of potential bidders. Public advertising, on the other hand, is done through various public channels, such as online platforms, industry publications, newspapers, and government websites. Each bidder would send over a commercial construction proposal to complete the project.

Try Downtobid

Struggling to find the right contractors for a project? Downtobid is a platform that connects project owners with the right contractors and simplifies the entire bidding process. It has the following features:

• AI automation: This feature helps to review bid packages, ensuring they’re complete and accurate. It also matches bid packages with the right contractors.
• Quick bid invitations: This feature turns designs and plans into bid invites within minutes.
• A centralized system: This keeps everything in one place, making it easy to manage documents and communicate.

How Downtobid Works

Ready to upgrade the bidding process? Here’s how Downtobid works:

Step 1: Upload your project

Click on this page to upload construction plans. Downtobid’s AI feature will then analyze all the documents and prepare everything for bidding. The plan should be sent straight to your inbox.

Step 2: Create an account

You’ll need to create an account to gain access to your personalized bidding dashboard.

After successfully logging in, you will be presented with a comprehensive list of all bid packages curated by the AI copilot. For each package, a succinct scope sheet is generated, which includes:

• A concise overview of the bid package
• Detailed instances of detected scope within the project plans.
• A curated selection of local, qualified subcontractors recommended for invitation.

If you're a General Contractor (GC) with a preferred roster of subcontractors, you have the option to extend invitations to them directly. Downtobid has an extensive network of vetted subcontractors.

Step 3: Send automated invites

Select qualified contractors from Downtobid’s network and send out personalized bid invites.

Our AI tool creates a recommended bidding timeline, to make sure your Invitations to Bid (ITBs) are sent at the best time.

These ITBs are tailored with personalized information and a broad overview of the project scope, enabling subcontractors to efficiently assess if a project aligns with their expertise, without the need to sift through extensive plans.

The system also automates any required follow-up communications, adjusting the schedule and frequency in accordance with the approaching proposal deadline.

3. Bid submission

Potential bidders/contractors review bid documents to determine if they have the skills, resources, and availability to take on the project. They then prepare their proposals, which typically include outlining their approach, pricing, and qualifications, after which they submit their bids before the specified deadline.

4. Bid evaluation 

This stage is like picking the best chef to cook your favorite meal. Project owners evaluate all the bids based on a predetermined criteria to see which contractor offers the right resources and skills and meets all their requirements.

5. Award of contract

Finally, project owners select a contractor who offers the best deal and awards the contract. Both teams work together to finalize the deal, which may sometimes include negotiating the terms of the contract.

Once finalized, work can begin according to plan.

The Keys to Success in Commercial Construction

Success in commercial construction may vary depending on various factors, such as the size and nature of the project and current market conditions. However, there are key areas that, when mastered, can increase your chances of thriving in this industry.

Effective Project Planning

Effective planning maximizes efficiency. It also helps in identifying potential challenges and putting measures in place to mitigate risks. 

Effective planning involves having a detailed project plan of the scope of work. For this to be achieved, strong project management is essential.

Expertise and Experience 

Expertise includes having an understanding of the industry, construction techniques, regulations, and project management. Experience, on the other hand, comes from having worked on similar projects, which can provide valuable insights.

These two skills should be considered when hiring the right team to work with as well. A skilled and experienced team is important for maintaining a high-quality workforce. This ensures that the project runs smoothly from initial phase to completion.

Communication and Collaboration 

Pulling off a successful project requires collaboration and teamwork among all the parties involved. Additionally, having open and clear communication channels among everyone is crucial as it fosters a great working relationship and ensures that everyone is on the same page. 

Commitment to Quality 

Cutting corners in this industry leads to substandard work. Therefore, it’s important to maintain quality throughout the process to save time and money.

What does this mean?

For project owners, this means not working with contractors just because they have the cheapest bid or choosing suppliers with low-quality construction materials.

For contractors, this means not cutting corners when it comes to labor, supplies, and other associated costs.

Furthermore, in commercial construction, there are industry rules and regulations. To stay on top of this, clients must meet or exceed industry standards, and regularly inspect and monitor activities to stay on top of things.

Use Technology

Technology plays a huge role in the success of a construction project. It enhances efficiency, collaboration, communication, and overall project management. Think about Building Information Modelling (BIM), construction management software, such as Downtobid, and other relevant technologies.

Where To Find Commercial Bidding Opportunities For Construction Projects

Looking for opportunities to find, discover, and bid on projects? There are various construction bidding sites or platforms that provide access to more projects, such as:

Dodge Construction Central

Dodge is widely used by construction professionals, including manufacturers and distributors, general contractors, subcontractors, architects, design gurus, and construction service providers. 

This platform delivers data, leads, and market intelligence. It also offers a comprehensive database of bidding opportunities for both public and private projects.

Construction Bid Source 

Construction Bid Source is one of the oldest construction bidding sites. It has been in service since 1992 and was originally known as Construction Bid Source Interactive (CBSi). 

This online trading publication provides contractors with leads on projects and bids. In addition, it provides DBE (Disadvantaged Business Enterprise) and Good Faith Effort support for bids and project-related needs. 

How Do Construction Bidding Websites Work?

Construction bidding websites act as an online marketplace where construction professionals network. Here’s how they work for both project owners and contractors.

For Project Owners 

They post project details and include eligibility criteria for contractors, submission deadlines, and how the selection process will be done.

• Receive and review bids.
• Award contract to the winning bidder.

For Contractors

Browse through the listed projects using search filters based on location, project size, type, and other relevant criteria.

• Get access to project documents to read through them as you prepare your bid.
• Submit the bid within the specified deadline
• Wait for the outcome - you can either win or lose.

How To Choose The Best Construction Bidding Website

Here are some key considerations you should keep in mind while choosing where to bid on the best construction website.

• Easy navigation: The website should be easy to navigate and use. Users should be able to find information quickly and efficiently.
• Portfolio display: Choose a website that showcases previous projects and accomplishments. This is for transparency purposes.
• Mobile-friendly: Ensure that the website is compatible with your smartphone or tablet.
• Clear call-to-action: Choose a website that encourages users to take the next action, e.g. “request a quote” or “get in touch.”
• Budget: Construction websites have different subscription plans - free plan, basic plan, and premium plan. It is, therefore, important to choose a website within your budget.
• Integration: Choose a website that syncs up with other tools and software.
• Support: Look for a website with responsive customer support to assist whenever you need support.
• Security: When choosing a website, aim for one with a “https” tag, a clear privacy policy, and a strong password requirement to ensure that your personal information is protected.

Time To Win More Construction Projects 

Now that you’re familiar with commercial construction bidding and how it works, it’s time to win more projects. Here are some tips to help you close more deals:

• Know the type of projects you want to work on.
• Have all your documents in place showcasing qualifications, experience, and expertise.
• Network and build relationships with other construction professionals.
• Market yourself. You can utilize digital marketing channels, such as construction bidding websites.
• Submit competitive bids.
• Deliver high-quality work.
• Stay informed with the latest trends, technologies, and regulations in the industry.

What Is A Bidding Strategy In Construction?

A bidding strategy is like a game plan that contractors use to compete for projects.

Here’s a breakdown of the main aspects of a bidding strategy:

• Understanding the project 
• Checking if they have the manpower, equipment, and subcontractor to get the job done.
• Knowing the numbers and capabilities of the other bidders.
• Accurately estimating how much the project will need.
• Setting a fair profit margin.
• Identifying risks and putting measures in place to mitigate those risks.
• Submitting winning bids.

Final thoughts 

Commercial construction is very dynamic, but with knowledge and the right tools, you can achieve success. Remember, the keys to success lie in effective planning, effective communication, and leveraging the right resources. 

Also, if you want to be exposed to more opportunities for construction projects, try joining construction bidding websites. They can open doors to many prospects in the construction industry.