THE IMPORTANCE OF COST ESTIMATIONS
like superior project management , completion of projects on time and within budget , or special expertise . You can also adjust your bid based on current market conditions , such as material costs and economic trends .
Risk management must also be considered when bidding . Contractors should try to clearly define and deal with risks in the bid ; clients are attracted to bids that completely manage and mitigate risks rather than simply passing them on . Contingency planning should also be part of your bid — plan for unforeseen issues , but do not inflate the bid disproportionately , since this will result in making your bid less competitive .
And what about strategic pricing ? Come up with a markup strategy that covers your costs , including overhead and profit , while remaining competitive . You will need to take into account the project ’ s complexity , your capacity , and the client ’ s budget . Some contractors have adopted the strategy of bidding low to enter a new market or form a relationship with a key client .
Leveraging professional relationships and building and maintaining strong associations with clients , architects , other subcontractors , and suppliers may work to your advantage . This approach can lead to preferential treatment or insights into the client ’ s decision-making process .
Connect with the clients at the project planning phase if possible , since you may be able to influence the project scope and design in ways that play to your strengths .
Relationship-building aside , it ’ s always a good idea to present your bid in a clean , organized , and professional manner . During this process , you should be clear about costs and how they are developed ; clients appreciate bids that are direct and without hidden fees .
Accurate Cost Estimations The adage “ measure twice , cut once ” certainly applies to detailed quantity takeoff , and is an effective way to help with cost estimations . Contractors should conduct a thorough quantity takeoff to accurately measure and list all materials , labor , and equipment necessary . Digital tools can also improve accuracy and speed , but make sure that you doublecheck quantities to avoid errors that could lead to underestimating or overestimating costs .
Don ’ t forget to use up-to-date data for material costs , labor rates , and equipment prices ; update your cost databases to reflect current market conditions . It is also a good idea to secure multiple quotes from suppliers and other subcontractors to verify that you are getting the best prices .
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