How to communicate while competing for a project
Before any type of communication can begin, it is necessary to identify externally and internally limiting and non-limiting factors that will shape overall communication during the bidding process. Here are some of the most impactful ones:
• A Non-Disclosure Agreements (NDAs) is an external factor imposed by the client that limit your ability to communicate with potential bidders freely. Bidders can only communicate with you if they in turn sign NDAs with you. Overall communication becomes much slower and more work intensive.
• The communication and information transfer tools to be used are internally and externally limiting factors that dictate communication speed, work effort, information transfer and documentation / recording capabilities. The client may impose on you as the general contractor a tool to be used, and you as the general contractor most probably will impose a tool on your subcontractors (top down). Phone calls are the fastest way to get in touch, but the use of recordings is cumbersome, and the transfer of large data files not possible. E-mailing is very useful but has its limitations when it comes to communicating with hundreds of potential bidders and transferring large data files (bid documents) simultaneously. Communication platforms / hubs can help in this case substantially but often come with a price tag and / or yearly subscription.
• Project size and organization often dictate the number of communication nodes (points of communication), which should be kept internally as well as externally as low as possible. If multiple estimators are working on a single project, it benefits to designate at best a single person for exterior communication who then divulges the message internally and vice-versa.
Structuring your first calls with potential bidders
Structure your phone calls with your potential bidders properly to increase chances of getting bids for your projects. A structured phone call may go like this:
Step 1: Call the available phone number.
If you get connected: You will often be connected at this point to the receptionist. Be brief: “I am looking to buy [your item] for a commercial construction project. Is someone in sales available that can help me?“. In most cases the receptionists will connect you to somebody. Furthermore, they may help you in getting the right email or phone number you are looking for.
From time-to-time you will encounter receptionists that are not helpful or outright refuse to provide you with any information. Do not argue with them – it never works. Ever. Your task in this case is to be nice, to try to reason with that receptionist, and to find another way, if nothing else helps.
If you do not get connected: Leave a voice message. Be cordial and brief: “Good morning / afternoon / evening. My name is [your name], and I am looking to buy [your item] for a commercial construction project in [specific location]. Please give me a call back at [your phone number] at your earliest convenience. Thank you.” The two words a sales representative should hear are: I want to buy, and it is for construction. Do not provide any project details at this point – you don’t want to scare off anybody from the get-go. You will get phone calls back, but don’t count on it – You have to follow up regardless. Do mention a referral if there is one.
Tip I: Cellphone calls to be preferred over land lines. People are more available on their cell phones, it’s easier to save numbers, and I have even texted with bidders back and forth – something you cannot do on a land line.
Tip II: Best call times are usually between 8 am – 10:30 am. Thats when most are coming to work and would be sitting at their desks before their meetings start. You will hardly be getting anybody on the phone after 4 pm.
Step 2: Introducing yourself to a potential bidder.
Never start the call by asking questions, and interrogating. The potential bidder does not know you, and therefore has no reason to tell you anything, or trust you. You must open up the conversation properly – this is key! Introduce yourself first. Make sure to mention that you are a General Contractor (GC). Then move to describing the project highlights such as type [residential building, warehouse, etc.] and size [e.g., 200,000 sf] to give a general idea.
Step 3: Selling the job to the bidder.
You are under scrutiny the same way the potential bidder is under scrutiny by you. A bidder is looking for a clean and well managed project, with a fair chance of winning the bid, and making some profit. Therefore, you must make the project sound real and moving with speed. Furthermore, you as the GC must sound capable and committed to this project. The bidder will be interested in knowing these things:
- location of the project (and address).
- scope of work.
- construction start / groundbreaking date/ anticipated mobilization date.
- customer name (if not confidential).
- bid / budget submission deadline.
- wage type (union / non-union).
Tip III: Eliminate words of uncertainty and doubt. Bidders only work for confident GCs. Example I: “I believe construction will start by end of August.” Better: “Construction is scheduled to start 25th of August.” Example II: “I am looking to get bids back next week.” Better: “Bids are due next week Thursday at 2 pm EST”. Example III: “I am hoping to award next week Friday.” Better: “I will have completed a full scope review by Thursday, and then we are moving to award.“
Step 4: Answering the bidder’s questions.
After having provided a quick run-down, it’s now the bidders turn to ask questions. The following questions are the most often ones I encounter, and the responses I give:
• How many bidders am I competing against? “Currently, I cannot give you an exact answer. I have reached out to several potential bidders with the goal to be able to present three comparable numbers to the client.” It is counterproductive to share this information with bidders – with low numbers you are communicating you have no leverage, and high numbers turn bidders off.
• Is this your project? Best answer is “Yes, we have been awarded the project.” Or “We are highly committed in winning this bid as this project fits right into our wheelhouse. We do [this] type of construction / project on a daily basis.” Let the bidder feel your enthusiasm, experience and commitment to win, to place a bet on you!
• How many bidders are you competing against? Who are those bidders? “I cannot tell you as the client is keeping the names of the general contractors bidding the project confidential.” Never give out the number and the names of the general contractors you are competing against! You must understand, bidders seek to improve their chances of success (same as you); they will seek out your competition.
• How did you hear about us? Best answer is “We were recommended by [contact person] to get in touch with you. He deems your team to be capable, experienced, etc.” In case you do not have a recommendation from anyone: “We came across your company’s profile in / on [platform], and we deem your team to be capable of executing this project provided you are interested.”
• Do you know this client? Best answer is “Yes, we have completed several projects for this client in the past.” or “Yes, we have recently established a strong relationship with this client to build [this] type of facility, which is our strong suit.” Point out your strengths, not your weaknesses!
Step 5: Closing the call
Closing the call can look like this: “I really appreciate your time in looking into this project. Let me know if you have any further questions or comments; you have my contact details, right?” Provide him with your contact details once more if needed as he might not have noted anything down before. “Let me know if you need anything else, and I really look forward to your proposal. Have a good day!” Stay cordial, casual, be patient, be appreciative of someone’s time [keep in mind that in most cases that somebody is working for free], always keep the door open for more engagement.
Someone might have already decided not to bid. Again, stay cordial, casual, be appreciative of someone’s time and always keep the door open: “I totally understand, the same way this has to work for us this also has to work for you. I really appreciate your time in looking into this project. In case you do change your mind, please let me know! I am happy to walk you through the project again! [meaning, to describe you the project in detail once more].”
How to communicate when a project has been won
“Winning” means at a minimum receiving a letter of intent (LOI) from the client to proceed with you as the general contractor. Wording within that letter could be “Please use this letter as your notice to proceed (NTP) with shop drawings, submittals, mobilization and any initial work as required by [client], and to lock in your pricing immediately.” At that very moment you are locked in with pricing (pricing you provided) as per existing project documents (drawings, specs, etc.). If those documents change (due e.g., updates), then pricing can still change.
Your task is now to lock in pricing with your selected subcontractors. In a first step you need to make sure they are working with the project documents referred to in your LOI. Scope and schedule should be undoubtedly clear. Then it’s time for price negotiations, if any. The winning subcontractors receive your letters of intent. Keep in mind, during the time of your LOI and the moment you send out your own letters of intent you carry the risk of price fluctuations.
This is a competition until the last. Choose your words wisely to retain as much negotiation power / leverage as possible with your subcontractors. Keep them interested and engaged, avoid price skewing through sharing unnecessary comments and information, and try to answer promptly.
Substantial time might have passed between your first proposal submission and your LOI. Be mindful when requesting for updated numbers too frequently. Subcontractor Bid Exhaustion is a real thing, which has become more pronounced in recent years due to the constant price fluctuations, having to constantly reprice jobs. You will notice subcontractors missing deadlines more often, reducing communications, or losing interest quickly, etc.
How to communicate when a project is lost
Communicating in loss is equally as important as communicating in victory. Your primary objective is to maintain a good relationship with your bidders, and even further strengthen it for future projects. Once it is clear that a project has been lost for good inform your bidders right away. Bidders do appreciate clarity on the status of a project. You can choose to communicate through email:
“We have been given word that (our company name) has not been awarded the project. I wanted to extend a thank you to you for spending your time and effort in helping us provide a comprehensive proposal for this project. It has been a pleasure working with you and I will reach out if anything changes. Kind regards, (sender).”
Phone calls allow for more personal and detailed conversations but are in general also more time consuming. I found that bidders are usually most interested in knowing how competitive their proposal was in comparison to others, and who their direct competition has been on this project. Here is the chance to strengthen the relationship by providing some well appreciated feedback that can help your bidders land projects in the future. Decide beforehand how much information you are allowed and are willing to share. At all times, remain professional and courteous while providing useful feedback, never give false hopes or make any promises, never speak ill of any party or the outcome in general, never give a particular reason why the project was lost (unfortunately often the client will not even tell you). You want your bidders to keep working for you, so you must keep sounding enthusiastic, professional and foremost capable. Use this opportunity also to ask questions to your bidders you usually don’t have time for, and to learn from them.
While communicating keep in mind the following: your objective is to keep “hunting” for new projects. Hence you (as the preconstruction manager) will have to decide how much time is it worth to keep communicating (which is still a form of working) over a lost project, rather than moving to a new one.
Estimating-Mindset 