How to Come Back from Winning as the Lowest Bidder
Date Posted: February 27, 2025
Posted In: Discussion,
From Construction Business Owner: If you’ve never had the opportunity to be in the “war room” on bid day, you owe it to yourself to observe the action in person.
Picture a large conference room with about eight to 10 separate phone stations and monitors, all tracking different disciplines of a project. These stations are manned with what look to be the latest home-shopping channel operators (bid coordinators and/or estimators) frantically plugging in last-minute numbers.
Then, like a great telethon or lottery, the final numbers are displayed on a huge video monitor in the front of the room. The bid captain or lead estimator gathers the final numbers and adjusts the bid to be submitted to the owner before the designated bid time—not unlike the chaotic scene on the trading floor of Wall Street when the latest initial public offering (IPO) hits and the buying frenzy begins.
Once the submission time is closed, the bids are opened and announced in public. War room associates wait for the call to hear the results. The call comes in from the bid runner downtown and the message comes back, “We won! We were the low bidder!” The announcement prompts high fives and cheers from the whole team except for two people—the estimator and the owner of the company.
How Low Can You Go?
Why aren’t the estimator and owner reveling in the excitement of winning another project? After all, the team may have been working on the project for weeks or even months. It’s because they’re looking for the answer to one critical question: How low were we?
The answer to this question puts knots in their stomachs because if the win is based on their company’s low bid and it’s significantly lower than the bids of their peers, they may have left margin and profits on the table. Worse yet, they may have missed a critical component that could add out-of-pocket expenses.