Unfair Advantage

Posted on January 4, 2012 by FMI Staff | 0 comments

Unfair Advantage by Mike Clancy

Contractors need every trick in the book to find and win the work they need to keep their company productively employed. Many contractors find themselves needing to bid significantly more work to get less work than was typically the case, while their estimating departments are smaller than ever. It simply is not a recipe for success.

Half of the estimating department’s time and effort is simply wasted. It is working hard but does not have the systems, information and support needed to be positioned to win projects. We accept that low hit rates are an everyday reality of the marketplace. Nothing could be further from the truth. There is no honor in being second on a bid. It may feel better than being No. 7 out of 8, but you have still invested significant time and effort in a wasted effort to win work.

It is possible to make money on public/hard bid work, and you can make money on projects that have 8-10 competitors. We see contractors every day bid at rates their competitors cannot match and still make money at the end of the job. What is the secret to winning work?

  • Know your real costs
  • Make smart decisions on the work to pursue
  • Know much more than your competitors

By applying these three steps, you will increase cost certainty, lower your cost of winning work and drive up your hit rates.

Read more at:

http://www.fminet.com/media/pdf/quarterly/2011_4_unfair_adv.pdf


This post was posted in Consulting and was tagged with construction industry blog, A/E/C blog, FMI Corporation, Business development, FMI Estimating Advantage Model, Construction Estimating

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