The Value of Contractor Outreach Meetings: Finding new opportunities to increase bids and lower project costs
The construction industry is facing a serious problem with new projects. From a mass exodus of Baby Boomers retiring to more projects than we know what to do with, new business is causing headaches from runways to board rooms. At Connico, however, we have created some metaphorical ibuprofen to help ease the minds of project owners across the country.
The increasing number of retirement-age construction workers combined with an influx of funds available for projects is causing bids to stack up on one another and bidders to drop significantly. This lack of competition of bidders drives up project costs, and projects with only one bidder are occurring about 20 percent more than expected, requiring owners to explain construction economics to their boards and the FAA. So what is the best strategy to increase bids and decrease project costs long-term?
Our team and other industry players have found success contacting the local contracting community at the earliest opportunity possible to inform them of upcoming projects and generate interest in bids. We call these contractor outreach meetings, and we aim to hold them around the 60 percent design level so there is a good understanding of the scope, timeframe and phasing of the project.
During these meetings, all relevant project information is presented. Specifically, contractors are provided the major quantities of work, if available, an idea of the phasing required to complete the work, and any nuances that could affect a bidder in assessing what can be expected once the project begins. When planning these meetings, the local contractors that normally bid on the work are invited to attend. Ideally, these meetings are also advertised in local and industry publications to create greater exposure to the project.
Another reason to conduct outreach meetings is to inform the local Disadvantaged Business Enterprise/Small Business Enterprise (DBE/SBE) community about project opportunities so they can be positioned for a role on them. Often, there is a significant amount of time allotted to the potential prime contractors to network with subcontractors, including DBE/SBE subcontractors, so the prime contractors can begin building their project teams.
We also aim to provide attendees with any available information related to contracting with the owner that might be different or unique to the specific owner. When a project is bid, there is usually a minimum time frame to hold the pre-bid meeting, submit questions and prepare the bids. By including project information in the contractor outreach meeting, contractors have time to assess any element of risk that might affect how they bid the project. The more time given for risk assessment, the more risks can be mitigated and hopefully lower the cost of mitigating those risks.
While we can never guarantee to an owner that there will be more than one project bidder, we can help conduct contractor outreach meetings that create awareness of project opportunities and help generate multiple bids. Anything we can do to help solve this problem early is good for the owner and allows us to continue acting as a long-term, strategic partner to our clients.
Dave Hunley is Vice President and Chief Development Officer at Connico and can be reached at email@example.com. Lisa Heckendorn-Blake is a Senior Project Manager at Connico and can be reached at firstname.lastname@example.org.