In this video, award-winning architect and builder David Pollard offers ways to reframe the negative thoughts customers can have about renovating. By better understanding your market and your customer needs, you can manage your customers’ expectations and face down these common renovation stigmas: 

1. The project will cost more than expected 

2. The project will take longer than expected 

3. Emotions get in the way of smart decisions 

4. The renovation cost is out of line with the property’s value 

5. The renovation cost is unfairly priced 

6. My renovation project will just make me miserable 

Renovators like you can combat each of these by clearly communicating your project’s purpose, scope, pricing and scheduling. 

To learn more about how you can use software to quickly create project estimates and schedules, why not book a demo with a friendly Buildxact team member? Imagine how much easier your customer conversations will be when you have all the material pricing and labor clearly listed.

For more details, check out Buildxact pricing, or begin working right away with a 14-day trial that is free to use.

David Pollard is co-founder of LivCo, a U.S. renovation company based in Illinois that has won multiple industry awards and recognitions since its founding in 2012. 

The post Break through customer renovation fears  appeared first on Buildxact AU.

Builders often struggle establishing this winning reputation because traditional estimating demands so much time. Understandably, builders don’t want to be pinned down by paperwork. They itch to be on the job site managing their teams and solving the daily problems that go with every build.

Successful builders have learned a trick for getting more time on the job site while also writing the estimates that grow their business.

These builders use estimate templates to simplify the preconstruction phase of their projects, leaving time to work directly with their home construction project teams. Having some free nights to spend with family and friends rather than writing estimates doesn’t hurt either. 

It’s easy to get started with free templates. You’ll find abundant samples on the internet that you can download and use to write estimates. But it pays to be careful. Using confusing spreadsheets or online documents can lead to trouble down the road.

More on that to come, but first let’s review some of the basics:

The benefit of estimate templates

Whether just starting out or well-established, builders need a thorough, accurate estimate. Estimate too low, and you lose money on a project. Estimate too high, and you may not win enough jobs to generate the cash flow you need to carry your construction company forward. After all, you’re in this to make money, right? 

Making money means more than covering your expenses. It means adding some extra income to give you a fair profit. Good builders know customers will pay for their expertise, and a detailed estimate explains the entire build package to the homeowner. 

The construction estimate covers all your labor and material expenses, overhead, permits and profit margin while delivering an on-time custom home project to the customer. Accurate estimates include all the tasks required to complete the job, from site prep to site cleanup, and give the homeowner power to make informed decisions on financing their project before you turn the first shovel of dirt. 

Finally, a clear estimate prevents misunderstandings down the road as the frame goes up and your subcontractors shift to different subtasks of the build, such as electrical, plumbing and HVAC systems. Builders with complete estimates often have to deal with less change orders.

Estimate efficiency

Now that you’ve reviewed the benefits of estimating, let’s turn to how you can do it quickly. To estimate quickly, builders like you use templates to save time.

Templates prevent you from starting from scratch when working similar projects. Whether it be single or two-story houses, or specific renovating or home extension projects, you jump start the estimation process using saved templates of your most successful jobs. 

Templates can list tasks and pre-price materials to avoid repetitive data entry that wastes time and leaves you open to making needless errors. More sophisticated templates, typically offered in construction estimation software, allow you to also pre-populate custom quote letters and generate basic construction project schedules to give your client a solid idea of a project’s length. With today’s labor shortages, having an estimate of cost and length of time is critical information.

Different types of construction estimate templates 

Estimate templates can take many forms. Builders swear by anything and everything, from notebooks scribbled with pencil, all the way to the latest cloud-based software. As mentioned previously, it’s good to be aware of the pros and cons. So let’s review. 

The tried and true ways of estimating a construction project

Obviously writing an estimate on paper is the basic way to get the job done. It’s especially tempting for experienced builders who, after years of working, have all the figures in their head. Sure, it may seem faster to just write estimates down from memory, but there are hidden hassles. 

First, you have to make a copy of your customer estimate for your own records, and then you have to file that in your office so you can find it later. And even if you find it months from now to use as a template for a new job with similar specifications, you then have to rewrite and update that estimate. Do you really have time to work so inefficiently?

Today, you have too many better options to notebooks and pencils that require less time and are more accurate.

The trouble with some free construction estimate templates

Spreadsheets and word documents offer a second way to use free construction estimate templates. No doubt you’ve seen these on the internet. Typically, they offer a free download with some basic instructions. 

Yes, these are better than writing things on paper. But You should keep in mind that free offers for estimate templates are typically just a way to rope you into a sales conversation about another, fee-based tool for construction projects. Free downloads typically require you to enter contact information and answer some questions that prequalify you to speak to a sales person so they can upsell you to another product.

Even when you put off the sales pitch and stick to the free products, there are hazards to using these spreadsheets and document tables. Typically, there are formulas hidden behind the rows of numbers that you enter. As a home construction business owner, you really need to understand what those formulas are calculating. You have to be sure what others have built for you is right for your business, and that can be time-consuming.

Also, a free construction estimate template is often isolated from other parts of your work. For instance, you have to perform material takeoffs as an entirely separate process and then copy the material counts into your spreadsheet. That leaves you open to make costly errors that can cut into your profit margin.

The same holds true for material prices. You have to take time to look up pricing from your supplier and then copy those figures into your spreadsheet or table. When you think about it, it could take days of emails and phone calls just to get those material prices. That’s just added delay and frustration.

Software offers a better construction estimate template

In today’s world of fast-moving labor and material prices, construction management software offers your best option for a construction estimate template.

Yes, there is a recurring cost if you subscribe, typically paid monthly. But the best software comes with a no-obligation trial period and ongoing subscriber support and service.

And unlike with free downloads, you know exactly what you are using because it’s explained in clear language and graphical interfaces that show you how labor and material costs are calculated.

Cloud-based software also allows you to either use standard templates that are ready-to-use once you login, or you can create your own estimate templates based on your favorite jobs. All of it is stored in one central place that you can access from anywhere that has an internet connection.

Because the best software is easy-to-use, builders can rely on it no matter how detailed the estimate or the type of estimate they want to show the customer.

Multifunction software offers more than cost estimation

But software does more than offer templates. It connects those estimates to digital takeoff tools and supplier catalogs that help you accurately estimate and quote customers 5x faster than with notebooks, pencils and confusing spreadsheets.

Takeoff software that’s included in the same monthly price calculates material counts from digital plans. No more hunting for plans on a crowded desk that you rarely have time to organize. With a simple point-and-click, material counts load directly into your estimate, which eliminates the manual errors that occur when copying figures by hand. And the best software also includes options for supplier catalogs and prices that ensure you are working with the latest information.

Learn more how software meets your estimate template needs

Today, builders like you are using modern software as their go-to source for estimate templates. Buildxact offers an all-in-one platform for takeoffs, estimates, quoting and job management.

Learn more about Buildxact pricing, or begin working today with a friendly Buildxact team member. Book a demo or start working with templates right away with a 14-day trial that is free to use.

The post Custom home builders earn homeowner trust with estimating templates appeared first on Buildxact AU.

The foundation of a successful home construction project lies with a detailed construction quote and resulting contract. Clarifying, via a quote to the homeowner, the project scope, specifications, costs and timeline reduces payment delays and unfortunate disagreements. The use of a building quote template leads to a higher level of customer service without becoming a time-waster for builder.

Properly defining the scope, specifications and costs requires a detailed itemization of labor costs and material charges. Custom home builders struggle finding the time to do this administrative work. This work competes with the need to be on the job site. However, smart builders have found an answer to producing the written document that the prospective client expects. They use construction management software and an associated building quote template to quote more work and win more contracts.

Moreover, it’s important to remember to charge a fair price for bidding for quoting a job. With this in mind, many builders can easily cover the cost of cloud-based construction management software. In the best cases, the software, for one monthly charge, offers a full suite of management tools. This set of tools goes beyond just offering a building quote template to include project scheduling, documentation and invoicing. So, the upfront investment benefits the entire project – from quote, contract agreement and signature to final invoice. 

Advantages of a building quote template

A powerful feature of modern, cloud-based construction management software is the ability to create home building quoting templates. These templates offer a detailed breakdown that you can use over and over again. Using easy-to-use software, you can create a building quote template for all the different home construction projects you perform.

The templates keep you consistent and organized so you miss nothing when ordering materials and scheduling labor. Creating the specifications and costs that make up your quotes becomes a simple task. Also, using top-rated software, you can customize your quotes. For example, you can offer detailed terms and conditions that best suit your prospective client and your project types.

The best software also comes with preinstalled templates. These allow you to create and customize job checklists, allowing you to add and remove material and labor items as needed. The software also includes the ability to adjust for markup and other contingencies, such as material price increases.

What to include in your building quotation process

A building quote needs to be comprehensive and complete to help you avoid the time-consuming and stressful documentation of change orders. As a builder, consider the following items:

Preconstruction costs

Preconstruction costs are fees and charges that occur before construction begins. You will want to clarify in your terms and conditions if the homeowner must pay these costs before construction begins. Preconstruction covers surveys, building permits, site preparation, utility installs and business fees, among other items. Not surprisingly, these can add up to a significant amount of money. So, it’s best you detail them in an easy-to-follow professional quote that properly informs your homeowner.

Labor and material costs

By performing a material takeoff, you arrive at the proper counts of supplies. To save significant time, you will want to use construction management software that includes digital takeoff tools. Digital tools make these calculations much quicker and more accurate than using traditional pen and paper. Digital tools also allow you to perform a material quantity takeoff by unit cost, linear length, surface area, cubic volume or weight. When software does the calculations, you greatly reduce errors, saving you time and increasing your professionalism.

Of course your quote is not complete if it only contains a material estimate. You need to also include the costs paid to your subcontractors and work crews, who are typically organized by the phases of your project (site work, foundation, framing, landscape, etc.). The best construction management software allows you to break out these costs in separate line items. The software also lets you include overhead costs associated with maintaining your payroll. You decide how detailed your quote breaks out this information for the homeowner.

Advantages of using software quote templates

The best construction management software directly flows the individual costs calculated from your material takeoff, labor estimates and markup into a building quote template. You can customize the quote template with preloaded product and material sample images as well as your business logo and letterhead.

Templates cut down on the administrative time you spend to build professionally looking quotes. Once built, you can send quotes to potential clients by email or traditional mail. It’s the kind of detail that makes your customer service an important competitive advantage in today’s ever-changing construction market.

How to find the best construction quote template software

Recently, Buildxact software ranked among the best construction management software as reported by both Gartner Digital Markets and Forbes magazine. In the case of Forbes, Buildxact topped the list. Editors considered Buildxact’s multiple quoting and job management features, affordable pricing and excellent customer reviews. 

Interested in seeing for yourself how Buildxact quoting templates can improve your business? Register here for a 14-day free trial or book a demo to see how Buildxact can help your business grow.

The post The building quote template offers builders a better way to serve homeowners appeared first on Buildxact AU.

For any business, there is a need for branding. Branding gives customers a visual understanding of the company’s reputation. It helps a customer decide if they should do business with that company or not.

Branding gives your company an instant recall to your customer’s memory and makes it recognizable. For this reason, it is important for businesses to invest in their brand identity and maintain a consistent presence across all platforms.  

A strong brand equates to more customers, which means more profit. It also adds a level of trustworthiness to your brand, which in turn creates customer loyalty. 

What branding story can a home builder tell? 

Building a home is a personal one. Homeowners are building a story of their lives and builders are experiencing this story along with them. Telling this story becomes part of a home builder’s mission to make the homeowners’ dreams come true.  

Branding is everything that a customer thinks about your business. It ranges from what they see, hear, or even feel about your brand. Summing all of those thoughts and opinions will decide whether customers will choose your brand over others. 

In his book Shoe Dog, Nike creator Phil Knight said, “How can I leave my mark on the world, I thought, unless I get out there first and see it?”. This quote can also be used to reflect the role of branding for your business.  

You can only leave your mark if your customers can see your brand out there. 

The important elements of your branding story 

• Brand name and logo – The most visual and recognizable aspects of your brand. Customers must make an instant connection to your business when they think of home building or renovation works.
• Design or theme – The feel of your brand must resonate with your customers. From building family homes to constructing elaborate frameworks, your brand’s design must reflect your building expertise. 
• Your works – The most important part of your branding is to display the final product. Customers make that connection with your brand when they see samples of your projects. 
• Your relationship with customers – Usually understated but a crucial part of your brand. Strong relationships built with your customers will attract new customers. 

A good story can be a valuable part of branding for a builder. You can talk about your origins and how you got started in the business. The challenges that you faced and how you overcame them. You should also talk about the projects  that you have worked on. This builds a certain connection between your brand and what your customers want to achieve in building their homes. 

How branding helps builders 

• Creating awareness – The more recognizable and stronger your brand recall are, the more business you will be expecting from potential customers.   
• Differentiating from your competition – Undoubtedly a significant part of getting more customers is your brand positioning compared to your competitors. You want customers to immediately identify your brand to your projects.  
• Customer recognition and loyalty – With strong branding, the level of recognition and loyalty will increase business leads. The more people talk about your brand, the more customers will come through. 

What to do next 

• Create a strong brand story and logo to resonate with your target audience 
• Increase your branding presence online – Find more customers online because everyone is on their mobile. Read how to do this here. 
• Build a marketing strategy using various methods to boost brand awareness. Find out more here with our handy eBook.  

The post Branding for home builders and why it is important appeared first on Buildxact AU.

What is bid leveling?

Bid leveling is a process that helps ensure that all bidders are bidding on the same package of work for a construction project. It allows customers to make a direct comparison of bids. Leveling often involves the owner asking questions and requesting clarifications of a proposal, and even revising the proposal to help the owner match what others are including.

Project managers or estimators often use a leveling form or bid tabulation template to assess multiple bids for the same scope of work. The leveling sheet lists the major components of the project, such as the scope of work shown in the drawings and specifications. Estimators go through each builder’s bid and mark the form accordingly to show whether a component was included in their prices.

If a component is missing from a bid, the estimator then contacts them to get the required pricing. The form, also known as a bid tabulation template, provides a visual representation of the scope of work in each contractor’s bid, making it easier to select the contractor with the most comprehensive, best bid.

The bid leveling process is often done by a general contractor when assessing subcontractor bids and by a project owner when choosing a general contractor.

After the bidding process is done, the lowest actual bidder is determined. Sometimes the apparent high bidder actually turns out to be the lowest bidder after the bid leveling process. This may be because an initial low bidder missed or excluded a portion of the work.

How to level a construction bid

The process for leveling construction bids includes ensuring that project requirements are met, identifying similarities and differences between bids, checking materials, and ensuring that the correct plans are being used to create the best bid.

1. Review project requirements

The first step in the bid leveling process is to review the general project requirements and ensure that all bids meet them. Project requirements may include bonding, contractor licensing, or the ability to provide services for public works projects.

Also for better comparison, the process should ensure that the scope of work for the project has been correctly identified by the contractors. For example, if a project requires precast concrete and a contractor only bid on reinforced concrete, the bid does not meet the requirements for that project and should be disregarded or the contractor should be given a chance to include that work in their bid. Make a list on a bid tabulation form of the components of the project for each trade so you can confirm whether each component is included in the bids you received.

2. Identify similarities and differences

Next, you’ll compare bids for similar scopes of work. Look at the detailed work description on each contractors bid, if there is one, to determine if the contractor has correctly identified the work to be performed. Specifically, look at their inclusions and exclusions for clues in identifying the scope they are bidding on. For example, two concrete subcontractors bid on a building foundation. One includes rebar and installation, while the other excludes rebar. This difference should be noted.

After noting the differences between bids, contact the bidders and ask them to clarify or revise their proposal to meet the project requirements and/or help you compare pricing. In the example above you could ask the contractor who included rebar to exclude it or ask the one who excluded it to provide a price for including it. The goal is to get the same work covered by each bid.

3. Optimize the materials list

Check all bids to ensure that the required materials, permits, or other charges are included in the price. Sometimes subcontractors make pricing assumptions when the project specifications aren’t clear or complete. For example, a flooring contractor may include an allowance for carpet. An allowance is a price set for budgeting purposes. If the actual product selected goes over the amount of the allowance, the customer is responsible for paying the difference. Compare pricing assumptions between contractors to ensure that everyone is using the same metric. This is especially important during inflationary periods when material prices frequently change.

4. Ensure the correct plans are used

Finally, you’ll want to compare bids to ensure that everyone bid using the latest plans and addenda. If a contractor noted that they are basing their price off a previous revision, or they aren’t recognizing a bid addendum, contact the contractor and ask them to revise the price to include the latest information.

Benefits of bid leveling

Bid leveling allows customers and general contractors to ensure that they are making an equal comparison of pricing for similar work. No two contractors bid the same project the same way. So, in order to make a judgment on which is the better price, the bids must be leveled. When contractors bid the same work, selecting the low bidder is easier.

By providing a thorough review of all bids, bid leveling improves bid accuracy. When a contractor or customer compares bids from multiple builders, the diligence often catches errors or omissions in the bid. The subcontractor or contractor then has the opportunity to revise the bid accordingly. This helps ensure that the customer is getting the right price for the work.

Projects that use bid leveling can see overall cost savings of 8-10%.

Summary

Bid leveling helps project owners and general contractors choose the best builders and pricing for their project. It ensures that bids are representing the same scope of work and money is not wasted on builders working off incomplete specifications. To level a bid, review the project requirements, identify similarities and differences, check materials, and ensure that the correct plans are being used. From there the customer or contractor can make the best choice for their project.

Buildxact can help contractors and subcontractors improve the accuracy of their bids while also offering online tools for construction management. Register here for a 14-day trial or book a demo to see how Buildxact can help your company.

The post How bid leveling helps nail the best builder for the project appeared first on Buildxact AU.

The wise homeowner does not select a builder on price alone; however, it’s critical that you always submit competitive, complete bids if you are to win the amount of work required to grow your business. To do this, you must have accurate estimates of labor costs and material costs‑especially during the current economy’s upwardly spiraling prices and tough construction labor market.

Importance of construction cost estimation

As you know, many businesses offer estimating to custom home builders. Hiring someone to do your estimates may save time, but it only adds to the overhead you must cover before you can earn a profit. That’s why many builders, like you, turn to online software solutions to do their own estimates. They know it’s a great way to stay on top of all their construction costs and have greatest control of their project. 

The estimate must consider many parts, such as material, construction labor and equipment costs, and all of these are critical if you are to arrive at a fair quote that generates a reasonable profit for your business.

Estimates detail accurate construction labor costs

Estimates do more for you than just help you track profitability. The information you gather during the estimating process influences many of the business decisions you’ll make. For example, construction labor prices and the associated hourly wage will influence who and how many you employ, and material prices will direct what suppliers you use.

For instance, you may find that buying from a single supplier makes more sense than using two or three, or you may find that hiring more experienced construction labor actually saves time in the long run on both direct and indirect costs.

Estimates encourage construction business planning and organization

Once you’ve decided the budget for labor costs and material costs, you must also consider scheduling. Knowing which crews are available and when will drive a lot of decisions that must be made about the timing of a project and when the associated materials for each stage of the build must be at the proposed job site. It also helps you think about any time that should be built in for labor cost sick days, bad weather and other unforeseen events that can delay a project. These decisions need to be made well-ahead of time to ensure the homeowner approves of the timeline and that material availability is sufficient to accommodate all construction projects you have under way.

As you schedule out jobs, you may begin to wonder about the budget estimate for your total labor costs and if you have set it up properly when comparing to your construction company’s financial goals and the threat of losing money on jobs. Below are some basics to keep in mind as you work through your construction costs and labor rates.

What are construction labor costs?

Your construction company pays labor costs, generally put, for work crews to complete the specific tasks of a home build. Work and the associated hourly rates are typically divided into major stages of construction (site work, foundation, framing, exterior finishes, major system rough-ins, interior finishes, landscape, etc.). Each of these have tasks that require many subtasks to be completed by crew members made up of framers, carpenters, plumbers and other skilled labor. You will have an hourly rate or crew’s hourly rate for each.

It’s important that labor costs also cover the indirect overhead or “labor burden” of carrying employees on a payroll. The employee’s labor burden includes federal and state payroll taxes, medical insurance, time off, worker’s compensation and other items not directly related to a home build.

Different methods for construction labor cost calculation

The Square Foot Method

The Square Foot Method is used typically in the earliest stage of a project to determine the rough lump sum cost of construction and how long the build would take. At this point, the owner typically wants to know if he or she should even continue planning their home build based on how much financing is available, and you are usually prospecting for new business with the idea that an initial estimate on labor cost and material cost is subject to further adjustment. The method is done by calculating a general cost per square foot and then multiplying that amount by the total square footage of the project.

Using this method, you should base the cost on historical data from your experience on previous builds or from researching locally available information. Most likely the only documents you would be working from at this early stage are initial sketches of a floor plan and drawings of a site plan. Because of this, exact dimensions are unlikely at this point. You will calculate labor cost, but it’s likely not necessary to detail the unit cost as this stage.

The Unit Pricing Method

Unit pricing is more detailed and includes separate costing for the material and the labor needed to do the build. As a general rule, you are looking at the base rate for labor, which is typically expressed as a cost per hour for the entire crew needed to complete a specific task, and then multiplying that by the total hours needed to complete that task. The crew can be made up of individuals of different experience earning a different hourly wage. The idea is to add all team member wages together to have the unit price per hour for that crew. You then add separate line items for materials. You then repeat the process for all tasks needed to complete the home build. And be sure not to forget indirect costs such as city permits and inspections.

At this stage you might be working from architectural plans with accurate scale and dimensions, but these plans may not be complete. If plans are available, estimation software can help with unit pricing because it can perform a digital takeoff, which is much faster and more accurate than using a pen and paper to do your own calculations. It also acts as a checklist to help you ensure you miss nothing.

The best software allows you to save your estimates so that you can reuse them for future projects that are similar in size and scope. The best software gives you the ability to easily add and remove materials and other items. That’s important because as this early stage, you don’t want to get locked into something the homeowner may change.

The final construction labor cost

The final estimate is generated from the actual plans used to build the project, also referred to as the construction plans. Your local building authorities approve this set of plans, which is important because from this you will finalize your materials and labor cost budget. In your final estimate you will include much greater detail and will include estimates from any subcontractors you plan to use. Here, you should fully consider the total labor cost, which includes labor burden costs mentioned previously, like payroll taxes.

It’s important that your final estimate include markup to ensure your profit margin. The best software gives you options as to how to present this to the customer. Some builders prefer to show markup for each line item of material or labor. Some builders choose to spread these indirect costs over the entire estimate. The best software gives you the flexibility to present either way. Also, the best software gives you the ability to track subcontractor labor and markup costs using internal work orders that can compare actual costs to your initial estimate.

How construction management software can help

Increasingly, home builders like you are organizing their businesses to deal with the challenges of estimating material and labor cost using cloud-based software, and the best software covers both the cost estimating and the generating of schedules for their work teams. Because these work teams can vary widely in purpose and number, the best software saves you time because you can visually see when different jobs are being completed and lets you prioritize and sequentially order work and the associated labor costs using the drag-and-drop of a computer mouse. 

Buildxact software offers labor cost and material cost estimating features as well as simple scheduling to help you calculate labor costs and keep these costs in line with homeowner expectations. Book a demo or sign up for a 14-day free trial today.

The post How to consider labor estimate costs for construction appeared first on Buildxact AU.

The process starts with an invitation to tender (ITT) a construction project [may also be called a request for proposal (RFP), invitation to bid (ITB), or request for qualifications (RFQ)]. The tender document includes all the information needed to provide pricing on the proposed scope of work. Based on the tender documents, contractors provide pricing to the owner. The owner or other parties involved reviews the tenders and selects the best one that fits their needs.

There are several types of tender processes that may be used to select a contractor: open, selective, negotiated, serial, framework, single-stage, and two-stage tendering.

Open tendering

During an open tendering process, anyone may submit a tender in response to the owner’s invitation. The opportunity is advertised where contractors can see it, and all interested contractors are invited to submit a bid. Some invitations, for example, those that involve large projects, may require that contractors are prequalified before submitting an open tender.

Open tendering is the most competitive tender option, allowing anyone who is interested in an opportunity to bid on it. It allows new and emerging contractors the opportunity to win work, and encourages competition.

Selective tendering

Selective tendering involves the owner choosing a short list of contractors to invite to the tender. In this case, only those invited may submit a tender offer. This type of tender works best with specialty or complex projects, where the owner wants to limit the response to only that particular class of construction companies they deem suitable for the work. An unknown contractor is not going to participate as they might in an open tendering procedure.

Selective tendering reduces what can be wasted effort from seeing proposals from too many contractors and helps ensure only the competent contractors participate. However, it excludes new and small companies who may be competent contractors, and reduces the overall number of competitive bids.

Negotiated tendering

In negotiated tendering only one supplier or contractor is selected to submit a tender, and the owner negotiates with that supplier or contractor to reach an agreement. This version is used for highly specialized contracts or the extension of an existing contract. This tendering process significantly reduces the cost, as there is only one proposal to review.

However, it discourages competition among contractors, which can lead to higher prices and a more challenging negotiation process.

Serial tendering

In a serial tendering opportunity, a particular contractor provides a set of typical values for a set scope of work over a series of similar projects.

The owner can select from the list of work to determine exactly what will be performed under the contract. Contractor prices may be lower with the expectation of ongoing work, less need for future tenders, and the establishment of a long term business relationship.

Framework tendering

Framework tendering involves the selection of a contractor for on-call work over a period of time. The contractor provides a schedule of rates and a breakdown of resources and overhead charges. This type of tender reduces costs and allows owners to get a quick response to repairs, since the contract is already signed and completed.

Single stage and two-stage tendering

In a single stage tender, the tender documents are fully designed before an invitation is sent out. One contract is awarded for the entire project.

In a two-stage tendering, the initial design hasn’t been completed yet. A contractor is selected to take part in two distinct stages.

They may propose their initial fee for design or may be chosen because of their qualifications. Once the design documents are complete, another tender is submitted for the construction of the project, and a contract is drawn up for that portion of the work.

The tender process

Most construction tendering in the engineering and construction industry goes through this process: invitation, clarification, submission, settlement, and contract execution.

Invitation to tender

The owner provides tender offers with information to potential suppliers and contractors on the work to be performed. These tender request documents may include:

·        Letter of invitation to tender

·        Preliminary information (including pre-construction information and site waste management plan)

·        Form of contract, contract conditions andamendments

·        Employer’s information requirements if BIM is being used

·        Tender pricing document (or contract sum analysis on design and build projects)

·        Drawing schedule

·        Design drawings, and perhaps an existing building information model

·        Specifications

Clarification

Prospective tenderers submit questions and clarifications to the tender notice to help them understand the work. Responses are sent to all prospective bidders and changes may be made to the tender documentation. The bid deadline may be extended to give bidders time to review the information and get the necessary pricing.

Submission

Contractors submit competitive bids to the owner with pricing and information about how each contractor will complete the work. Documents submitted with the tender may include:

·        Tender return slip, with details of the contract, including information such as return address and tender checklist

·        Completed tender pricing document (or contract sum analysis on design and build projects)

·        Schedules of rates

·        An initial construction phase plan

·        Design proposals or method statements that have been requested

·        Procedures to be adopted, such as procurement procedures and cost management procedures

·        Demonstration of capability, for example design capability, systems used, etc.

·        BIM execution plan – if building information modeling is being used

·        Key project personnel, which may require submission of CVs or resumes

·        Management organization

·        Plant and labor resources and availability

·        Prior experience

·        References

Variant bids

Contractors may submit alternatives or noncompliant proposals as an option for the owner. These options are usually less expensive than that proposed in the tender documents. Variant bids are usually provided only if requested and accompanied by a compliant proposal.

Qualified tenders

The contractor may submit a proposal with specific reservations or limited liabilities if they cannot or will not provide the services specified in the proposal documents.

Settlement

After reviewing the submitted tenders, the owner selects the preferred tenderer to enter into negotiations with by making a formal offer. Through this process, the tender documents and proposal may be revised to meet the conditions of the agreement.

Contract execution

The final contract is prepared, reviewed by both parties, and signed.

How to win more construction work through construction management software

In most tendering opportunities in the construction industry, suppliers and contractors are competing based on experience and price. Anything contractors can do to reduce their project costs will make their bids more competitive. Construction management software keeps teams updated with the latest construction documents and information they need to keep the job moving, helping to prevent mistakes and costly rework.

Software can also significantly improve your response time because material takeoffs become simple and easy to perform. This also boots the accuracy of your competitive tender. Instead of relying on legacy solutions, it’s time to modernize your estimating process so you can bid more projects and get more work. Buildxact helps contractors just like yours get more work every day.

Ready to see for yourself?

Give Buildxact a try with a 14-day free trial, or have one of our team take you through what Buildxact can do for your business with a one-on-one demo.

The post What is tendering in construction appeared first on Buildxact AU.

First impressions can be make or break for winning the job, so make it count with detailed and professional quotes with Buildxact. You’ll be able to quote 5x faster using Buildxact’s quote builder. Send a beautiful branded and detailed quote, helping you stand out amongst the rest. Add colours and images of selections, show allowances, terms and conditions, and provide a final price all in one quality quote.

The post Create professional and detailed quotes 5x faster appeared first on Buildxact AU.

Here, we will discuss the steps in the cost estimating process and offer some strategies to help you win more tenders and bids, and greater project success.

What is construction estimating?

Basically put, a construction estimate is a cost analysis of a construction project. In reality, they are time-consuming, detailed and must consider the client’s vision, input from the design team, the availability of materials and labor, the environment and all the necessary budget requirements.

For accurate construction estimates cloud-based estimating software can save you time and make your business look more professional.

What is a construction tender?

A construction tender is an invitation to provide a formal submission, or proposal to bid on doing work on a construction project.

Types of construction tenders

There are a few types of tenders when it comes to construction projects. They include:

• Open tender – these allow anyone to submit a proposal;
• Negotiated tender – this is when a client approaches you alone;
• Selective tender – here, multiple companies are selected to offer a proposal.

An open tender, usually used for Government projects, is advertised and if you are interested in the job, then you can pick up a tender package. With other types of tenders, the packages are often presented to you.

What’s included in a tender package?

The people or agencies that have a building project they want to be constructed will put together a tender package and make it available to the construction companies they want to submit a building proposal.

A tender package will include:

• An invitation to submit;
• A form of tender;
• All preliminary documents and information;
• Pre-construction and site management data;
• The contract and conditions;
• Tender pricing;
• The specifications document;
• Information on the client/company;
• The project’s drawings and specs;
• And, a tender return slip.

This is how you begin to familiarize yourself with the project. From the information in the tender package, you will start to build your proposal or bid.

Responding to a tender request

You should take every tender request seriously and consider it an honor to participate. So, make sure you enter your response within the timeframe the tender package outlines.

Even if you don’t think you are suited to complete the project, you should respond to the client. You can explain why you are not suited, this way you leave the door open with them in case any future projects come up that are suitable to your business model. People don’t like being ignored, but they appreciate honesty.

Make your correspondence professional, timely, clear and concise.

Awarding tenders

The client may not necessarily accept the lowest bid when they award the tender. Instead, they are most likely to award it based on experience, professionalism, abilities, quality and price. If your offer is too low, they may wonder how you can provide quality work. You need to ensure your construction cost estimate is accurate and you cover all your costs as well as your intended profit.

Who should be responsible for construction estimating in a construction project?

Depending on the size of the construction business the responsibility to perform a construction estimate could belong to dedicated cost estimators, the project manager, or the business owner. In a small remodeling business, it is often the builder themselves who is responsible for performing them – taking up a lot of their valuable time.

Advantages of getting in front of your customers quickly

The quicker you can build a relationship with your prospective clients the better. Not only can you build a rapport, but you can show your professionalism and market your business.

10 vital steps in the construction estimating process

To win tenders that are profitable for you, you must ensure you produce an accurate cost estimate. If your estimate neglects to include any of the following 10 steps, then you could be losing your business money and clients.

1. Choosing the right work to bid on

Before you even start putting much time and effort into your project bid, you need to ensure the job is feasible. Are the client’s expectations attainable? Can you handle the scope of work? Is the timeframe achievable?

You may be able to answer many of these questions through your experience; otherwise, you could use an available historical construction database along with good cloud-based estimating software.

Once you have decided the project is suitable to bid on, then it’s time to move onto the next steps:

2. Reviewing construction specifications

In the tender package, you will find the construction specifications (specs). This document should explain the grade of materials to be used, the kind of installation methods, where the cost responsibilities lay, and it should outline anything else that may affect construction costs.

It should also inform you of any qualifications your team will need, the payment terms, the bonding capacity – surety for the project and the insurance requirements.

3. Reviewing construction drawings

Next, you need to read the technical details from the architectural drawings to get a thorough understanding of the build and the scope of work. This means making a 3D picture of the project in your mind, showing you the elevations and work heights, etc. You should compare the drawings with the specs to clarify any discrepancies between the two.

4. Performing a construction takeoff

From the construction drawings, you must detail every product and material required for project completion. Then from the quantity takeoff you identify the unit costs of the items, and you calculate the overall cost of the project’s materials. A profitable project depends on an accurate estimate.

5. The construction estimate

Now that you have your accurate quantity takeoff, you can add it to your construction estimate. You will also need to include:

• A realistic project timeline – don’t forget to consider any public holidays that may fall during build-time;
• Labor cost- how many workers will be needed and the labor hours? How much will be unskilled labor and how much will be done by tradies or a general contractor?
• Subcontractor costs;
• Other direct costs like equipment, transport, storage and fuel;
• A contingency fund.

Making a mistake when preparing your estimate can be costly; so be sure to check and double-check all your information and calculations.

6. Determining overhead and profit

Whether you call them soft costs, indirect costs or overhead costs, don’t forget to add them into you overall figure. Examples of these include the cost of your office lease, effort needed for estimates, book-keeping costs, sales and marketing.

Now, it’s time to think about your profit margins. Without a healthy profit margin your business won’t succeed. If you have added this to an accurate cost estimation, your profits won’t suffer.

7. Building your construction proposal

Your proposal must be professional-looking and created in a timely manner. It must be detailed, concise and accurate. Try to use similar language as the specs document and the construction drawings. Use it to showcase you and your business – tell the client why you are the right person to lead the job.

8. Construction contract basics

A contract should accompany the other construction documents in your proposal. Some common construction contract types include:

• Fixed-price contract – you assume the risk, but you can make a higher profit;
• Cost-plus contract – the client/owner assumes the risks and you receive an agreed percentage above the project costs;
• Time and materials contract – usually used for smaller projects, where the owner pays for the materials and an hourly labor rate.

The contract is your safeguard, if issues or disagreements arise, you should refer to your contract for resolution; so be sure to make it clear and concise.

9. Handling change orders

Another important safeguard is the change order document. If changes need to be made after the construction has begun, a change order must be created. Verbal agreements can change; so get them in writing.

10. Construction estimating software

The most vital tip we can give you to make more profits, save time and for accuracy, is that we recommend you use estimating and construction management software.

Why you should use estimating software during the construction estimating process

If you want to produce a bid estimate that wins, then it has to be quick, professional, accurate, clear and concise. You could spend a lot of time printing paper plans, measuring items depicted in them and then making manual calculations. Or you can save a lot of time by using estimating software.

Some of the advantages to using software:

• It can digitally read drawings, eliminating the chance of missing items;
• A preliminary estimate can be made quickly, allowing you to pick the right projects to bid;
• The software can be your cost estimator. A quantity takeoff can be done 80% faster and with the uploaded material cost lists, accurate estimates are easy;
• Uploaded databases for equipment costs, material unit costs, your indirect costs and even your general contractor costs make accurate construction cost estimating quick;
• It will aid in project management by allowing project managers to set and maintain timelines;
• Cloud-based estimating software allows you to upload your construction documents where they can be accessed from anywhere that has internet access;
• The ability to handle all communication through the one app allows your project management team, workers and contractors to keep all communication together throughout the construction process. Where it can be easily referred to, if needed;
• It can also be part of your design team, making your documents, proposals and other communication professional and personalized;
• You can also integrate it with your accounting software to make invoicing simple.

Good quality software requires simple data entry to assist you. With less time and effort, you can use software to stand out from other competing contractors with a bid price that wins jobs and profits. So, try our 14-day free trial or book a demo and get back your spare time while growing your business and making money.

The post The construction estimating process, steps and strategies appeared first on Buildxact AU.

Here, we will look at why they are important, what they should include, and how to create a construction proposal that wins you bids.

What is a construction proposal?

A good construction proposal can be your showcase, your protection, a legal contract, and a great marketing and sales tool for your construction company.

It is much more detailed than a project bid and can help avoid conflict later on during the construction. Imagine if the project owner thought your part of the project was to include work you don’t perform–then you could easily refer to the construction proposal where you would show exactly what you have been contracted to do and where your obligations lie.

The construction proposal process will help you decide a project’s feasibility and whether the client’s expectations are realistic and achievable. If they aren’t, your proposal allows you to offer the client a realistic alternative that outlines exactly why your business proposal would work better.

Just by producing a good construction proposal, you can show proposed clients how well you know their construction project while also promoting your business, skills and reputation.

The construction proposal also includes task scheduling to monitor the build’s progress throughout the construction process. This ensures the job stays on track.

We recommend that you begin by looking at free construction proposal templates. Starting with a simple construction proposal template and then comparing that to a top-quality proposal template. Whatever construction proposal template you use, you must ensure that your proposals are presented in a professional way.

Key items to include in a construction proposal

Your construction proposal template should include:

•       The scope of work;
•       An estimate of the project cost;
•       The client’s information;
•       A payment schedule;
•       The start and finish dates;
•       What happens if there are hidden defects or unforeseeable conditions;
•       A work schedule;
•       What happens if there are any changes or extras needed during the build;
•       And, your warranty.

However, these are not the only things you need to consider. The construction proposal must be accurate, clear and easy-to-read with a good layout and personalized to your business. Importantly, it needs to be produced in a timely manner. There is no point in it if you complete it days after the clients have closed the bidding. 

Detailed Scope of Work

We recommend you spend a lot of time on this section, making it as detailed as possible, listing the services and tasks you provide. As mentioned, you don’t want to get stuck doing work you didn’t agree to because your scope of work wasn’t detailed enough.

Perhaps you are a contractor or renovator who specializes in cabinet making and carpentry, and suppose your client wants to have their kitchen and bathroom remodeled. You are happy to install the cabinets and cupboards, but you do not do tiling. Your construction proposal should detail the work you will do. If you use a sub-contractor to do the tiling, their information and estimated cost should be included. Making it clear who will be doing the tiling. 

Cost Estimate

Your cost estimate should also be very detailed, leaving nothing out. It needs to include all direct costs like labor (including sub-contractors), equipment, the quantity takeoff, which counts all the materials necessary to complete the build, plus an amount for allowances. You must also include all your indirect costs, like rent on your office and running costs.

Owner information

For it to be a legally binding contract, your construction proposal must include all the parties involved and your client’s details; spelled correctly with no mistakes, and they must sign it.

The construction proposal also details what their obligations and liabilities are, as well as any information or resources they are required to provide. Once again, the construction bid proposal is a safeguard for you and your clients.

Payment schedule

This section is very important for your company’s cash flow. It sets out the terms and conditions of payment. There may be local construction industry laws and regulations that may dictate some of the conditions, but this section can safeguard you against clients refusing to pay because they have a dispute. Here, you can layout whether the client makes payments as you reach milestones or that the client makes them on certain dates. Also, you can include when payments for extras or unforeseen issues are to be paid.

Start and finish dates

Adding the start and finish date of the proposed project is also very necessary because the costs that you establish often are based on the job going ahead at a certain time. If the dates alter, then it is quite possible that the price of materials and labor may change, too. You should also include the date the notice to go-ahead with the project was given to all the contractors.

You should also note when milestones are to be achieved and who is liable for delays, depending on the cause of the delay–more safeguarding for you and your clients.

Now, there are several mistakes that builders make when estimating and making a construction bid proposal: 

Hidden defects and unforeseeable conditions

Often forgotten is the need to define who is liable for the costs of hidden defects and unforeseeable conditions.

These hidden issues may range from something common like mold behind the walls, to something less common like underground boulders that weren’t expected. In these cases, there will be extra costs associated with the testing, handling, cleanup, containment, disposal or destruction of the unforeseen issue. 

By adding this section to your construction proposals, you can save yourself a lot of time, money and conflict.

Schedule

In the construction project schedule, you must include the amount of time it takes to get permits and approvals, the order of work, and the order of completion. When creating your project timeline don’t forget to consider possible delays from weather,  delivery services and other factors outside your direct control.

Changes and extras

At the time of writing your proposal, there won’t be any changes or extras to apply. So, this is where you detail what happens and who is liable for anything that may come up after the build starts.

Warranty

Another safeguard of a construction proposal is the warranty section. Here you detail what work you are liable to fix and under what circumstances, and it also details what you are not liable for– normal wear and tear, for example.

Tips for creating a winning bid

There are no construction proposal templates that can guarantee that your bid will be the winning one every time. However, when you write proposals that are clear, accurate, personalized, include all the details necessary, and showcase your business, then you are on your way to landing your next project. 

Don’t forget to follow up on your budget proposal or your marketing proposals to bring in more potential clients. Make proposal follow-up part of your sales process.

Give your proposals a personalized touch

The difference between a good construction proposal template and a great proposal is its professional design. It could be as simple as finding a free construction proposal template, adding your company logo, changing fonts to reflect your business style and adding a cover letter. 

Pay attention to what your clients need, make the review of your proposal easy and make sure the clients read clear instructions and information throughout the proposals you create.

Focus on the details

It is super important to focus on the details in construction proposals. Make sure your quantity takeoffs are accurate, that they include everything, even descriptions, pictures or graphs. Give your clients clear and understandable information that they can rely on.

Use a construction proposal template to make sure you don’t miss anything.

Ensure your data is accurate

Make sure everything you include is accurate, any mistakes can damage your reputation and lose you bids. Your client wants to trust you, but errors make them wary.

Example of a construction proposal

Why you should use estimating software during the proposal process

As we pointed out earlier, getting your proposals done in a timely manner is crucial to winning project bids. Using cloud-based estimating software will help you get the job done about 80% quicker than doing it by hand and when deadlines are present, speed is a must.

The specific project proposal can then be stored with the rest of the project’s documentation, where it can be accessed quickly and from anywhere that has an internet connection. You can also store your construction proposal templates online for easy access, ready for your next construction project proposal.

When you win more bids, complete projects on time and you remain within the budget, then your profits will increase, and making money while saving time is what it is all about.

Why not save time, build your reputation, your business and your profit with us? Book a demo of our Buildxact estimating and project management software or start your 14-day free trial today. Your next project and your potential client could be one proposal away.

The post How to do a construction proposal: examples and template appeared first on Buildxact AU.