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10 Steps to Bidding Less and Winning More as a Subcontractor

This is the single most valuable collection of bidding strategy advice on LinkedIn. If you want to learn more about how Clay wins 55.5% of bids, start here.

About the Contributor

Clay Young

Clay Young is the Owner of Falcon Electrical Contractors. He wins 55.5% of bids with his Bid Less, Win More strategy.

Business Outcomes

This is an edited version of a post written by Clay Young, which originally appeared on his LinkedIn profile.

1. Understand What Type of Work Your Workforce Excels at – Link to Original Post

There are several factors to consider, listed below in no particular order:

What is the current skill level of your workforce?

What tasks is your workforce comfortable handling?

Identify projects where the work “flowed,” indicating your team understood the methodology to install the system, making it almost second nature.

What types of jobs and scopes of work does your team get excited about?

Do you have a “subject matter expert” in your company for this particular work (e.g., data centers, mission-critical, medical, high-rise construction, aviation, etc.)?

Compare the actual production rates of your workforce to market standards (NECA, SMCNA, etc.). Are they consistently outperforming these rates? Make sure to adjust standard rates for your specific city and market.

Has your company identified a more productive approach that consistently produces a better result or product for this type of work?

Has your company developed a new tool or piece of equipment that allows you to be more productive and outperform competitors without compromising quality?

Is your company “sought after” by GCs for a specific type of work, or do you consistently get asked to perform this type of work due to your past performance?

2. Understand What Types of Projects Your Company Historically Profits From the Most – Link to Original Post

This is the second step in my “Bid Less, Win More” process and is crucial for successfully pursuing the RIGHT job. A vast majority of construction salespeople have no idea which projects their company is most successful at.

Why?

Financial data is often treated as “sacred” and kept within the “ivory tower.” This is a problematic practice and a common reason why salespeople remain uninformed. Consequently, they rely on hearing about a particular job’s “success” from someone on the project, even if it was a financial disaster. This happens because there’s no feedback loop between operations, the closeout team, and sales.

This issue also stems from the “perks” associated with “good relationships” with a GC. Having a “good or great relationship” with a GC doesn’t necessarily guarantee a great job. This scenario occurs frequently: a GC and a salesperson go on a bucket list trip, the subcontractor gets “the next job in the pipeline,” and they celebrate it with the Get Work team. However, they might be celebrating a losing project, making it difficult to recover.

The best approach is to obtain the facts!

A transparent financial department is a strong and ACCOUNTABLE one. I understand that some may disagree with this, but I can cite Kiewit, one of the world’s top GCs, as an example. Kiewit is very transparent financially with its employees – yes, all 35,000 of them. Kiewit is one of the financially strongest construction companies in the world. When the entire team understands the financial stakes, they can operate and make decisions with that in mind.

Show me a deceptive financial department, and I will show you numerous disgruntled employees not doing their best work, and project managers being asked to make unethical business decisions.

Once you have the information, focus on PROFIT (not OH and PROFIT) and divide it by a common metric, such as square footage, man-hours, or units (if multifamily, etc.). These metrics will enable you to examine factual data to guide your pursuit of the right jobs.

Consider other metrics (e.g., total direct man-hours divided by staff man-hours, the profit your staff generates on a job per year) that can be incredibly helpful in making these decisions.

As your data reveals what is most profitable, pay attention to the following:

  • Market Type
  • New Build or Remodel
  • Who the General Contractor was (You’ll be surprised by the trends you find)
  • City/Town
  • Job Size (Bid amount, man-hours, etc. – these would involve multiple metrics)

These types of questions can be included in your Opportunity Grading Scale, a tool used later in this process that we will explore in detail.

3. Find GCs Who Share Your Values and Appreciate Your Subcontractor Expertise – Link to Original Post

This is the third step in my “Bid Less, Win More” process, and it’s a significant one.

How do you find GCs who value the same things your company does, and why is it crucial?

Many companies (both GCs and subs) claim to place value on specific characteristics, but their actions often suggest otherwise. It’s a challenging task to identify alignment, but I’ve found success by taking the following steps:

Define your company’s values and priorities before seeking alignment with others. The more defined your values are, the easier it is to identify like-minded partners.

Why is this crucial? It minimizes the cost of pursuing opportunities. It prevents you from offering “freecon” (preconstruction without compensation) or, worse, winning a job only to discover mid-project that the GC doesn’t share your values. They may have said all the right things during the courtship, but their actions reveal a different story, costing you significant money.

If your values don’t align, consider it a blessing and move on. There are companies out there that will share your values – those are the ones you should seek. Don’t waste your time and money pursuing projects with companies that don’t align with your values.

Talk to their employees. Do they express enthusiasm and energy about their company and the values they uphold?

Talk to distributors and other subs who have done business with them. What is their reputation in the marketplace and industry?

Consult with architects and engineers. Are they strong proponents of this GC? Do they recommend them to clients? Would they engage their services for a new office if needed?

If you need to evaluate whether the GC aligns with your values by actually working with them, strategically pursue a smaller-sized project. This approach minimizes your exposure while allowing you to fully assess the company. We follow this practice with all new GCs, whether our values align or not, as a recommended best practice to reduce risks associated with working for a new company.

Determine if the GC is “subcontractor-friendly.” Are they empathetic to your cash flow needs, do they understand and consider the impact of their actions and decisions as a GC on your work as a sub? Do they seek and value your input before implementing a new policy or rule? Will they support you in disputed change orders with the owner, or do they take your interests into account at all?

How quickly do they pay after receiving an invoice? As part of my system, we rank GCs and classify them into “Tiers” – A, B, & C. These GCs are ranked based on questions 2-6 above, the type of work they do, if it aligns with our company’s most profitable work, and lastly No 7 – do they pay quickly. In determining rank, this question carries significant weight because everyone knows that cash is king. Cash flow can make or break a sub, regardless of size. Good cash flow can mitigate numerous issues, but it can also wipe out all the “good” if payments are slow.

4. Focus on the GCs You Want to Work With – Link to Original Post

Out of the pool of GCs you’ve evaluated, concentrate on the ones that traditionally require the skills and expertise your company excels at, and where your company generates the most profit. Zero in on these GCs!

Now that you’ve identified what your craftsmen excel at building, which market types and projects yield the most profit, and you’ve ranked your GCs based on key metrics, the fourth step of “Bid Less, Win More” shifts the focus to the GCs’ pipeline and their typical work.

Certain GCs should start to emerge as clear frontrunners. These are the ones you want to engage in meetings, but what does this look like? It’s more than a simple introduction, which is all that’s usually required of you and your sales team.

Every meeting should be intentional, with a clear goal for the entire team. What are you initially trying to achieve with the introductory meeting?

Find out the following:

What markets are they looking at for the next 2 years? Just because their website lists a market doesn’t necessarily mean they are focusing on it in the short term. They go where the demand is.

What is their organizational structure like? Who are the decision-makers for selecting subs? Sometimes it’s made by the preconstruction team, while other companies narrow it down to 2-3 options and let the project manager make the final decision. Knowing this is important, as your approach changes based on the decision-making process. What precon teams value may differ from what PMs value.

What is their revenue goal for the year? If you know they have plans for $100M that year and the market you are targeting (your specialty) constitutes 20% of their goal, you can tailor your approach and projects to align with their objectives. Alternatively, if you find out that you share values but they aren’t focusing on the type of work you want to target this year, it provides insights into what your pipeline may look like based on your A Tier contractors. For these projects, determine which are primary targets, and assess whether you can meet your annual goals through them alone.

What are the GCs’ needs?

Find out who their preferred sub is, then visit that sub and learn from their experiences. What has worked for them with this GC?

Identify tentative project timelines that match your criteria. This helps you understand manpower requirements.

Offer value to the GC. How? You can provide a check price for other types of projects that aren’t your specialty but are areas you’d like to gain more expertise in. By observing other approaches, you may uncover valuable insights that can prepare you for future markets.

Don’t hesitate to decline opportunities that arise in conversation. “No, that isn’t our area of expertise. While we aim to enter that sector, our field lacks experience in that area, so we wouldn’t be a good fit.”

5. Find 2 More GCs Just Like Them – Link to Original Post

The fifth step in the “Bid Less, Win More” process might appear straightforward, but what I’ve found is that many subs become fixated on the first GC they find. They become so excited about the new relationship that they slack off in pursuing the next two.

After identifying markets where you excel, hopefully, a few key markets have emerged. Your top three GCs should be diversified across these markets. If the recent pandemic has taught us anything, it’s that certain markets can shut down while others thrive. Plan your diversification strategy intentionally – public versus private, federal versus municipalities, etc.

I aim to have my bonded work for each year cover my annual overhead. Once I’ve secured those projects, I feel as if I’ve “pandemic-proofed” my business. True pandemic-proofing occurs when your company begins to invest in passive income assets that cover your overhead.

These top three GCs should receive your VIP treatment. I call it the “Four Touches plan,” and you should create a strategy for that company and their counterparts in your company. You should intentionally “touch” these contacts four times a month. This can involve your sales team taking them to lunch with a clear goal of collecting information about a particular job. It could be your finance department engaging with their finance team to build a stronger relationship. Project managers should connect with their counterparts, and owners should connect with their counterparts. While owner-to-owner interactions are less frequent, they play a significant role in cementing relationships. Each team member will return with different but valuable information. Once a month, we have a “Downloads” Meeting where we discuss the information collected by that team for that GC. This information feeds into our strategic capture plans.

6. Identify Your Target Jobs in Your Niche – Link to Original Post

Identify only those jobs where you excel, and inform your GCs that these are your target jobs.

For me, this involves an annual meeting in November with the GCs’ “Get Work” team to understand the projects they are considering for the coming year, their revenue goals, any emerging trends they’re observing, targeted jobs, and more.

It’s an excellent opportunity to share your goals with them. This way, they understand what you’re trying to achieve. A genuine trade partner will seek to help you reach your objectives. That doesn’t mean they’ll hand you all the jobs, but they will genuinely consider and actively try to get you on jobs that align with your goals.

Let your GCs share their upcoming year in pursuits. Once they’ve all been presented, go through the list and decide which ones are a good fit, which ones aren’t, and what you can offer for the projects that need further evaluation. Those that “fit” should be added to your target list, while the others can go to your B-list – a list of potential “filler” projects that you can draw from if other projects get delayed or fall through. Continue pursuing these projects, but when they are close to bidding, inform your GC whether you can actually perform the work or not and, if not, offer them a “check price.” A “check price” is not a haphazard figure; it’s a detailed, transparent estimate where all questions are answered, and reasonable answers are provided to educate your GC on your perspective. Highlight any risks you see associated with your scope and bring value to the conversation.

Don’t go into this meeting unprepared. Arrive knowing which project managers and superintendents are available to work on potential jobs based on current construction schedules. If the GC favors a specific superintendent or project manager, you can offer their services for a particular job, provided they will be available. Don’t engage in bait-and-switch tactics; be truthful and fair. Too many subs place PMs and supers on a job for the sake of winning a sale but have no intention of actually assigning them to the project. This practice is unfair and unprofessional.

Now that you have a list of jobs and GCs that seem to align with your values and goals, the real work begins.

Emerging markets – this is a significant insight into where your company should focus. This alone can put your company ahead of 90% of your competitors. Use these meetings to plan for 2-5 years in the future; don’t get stuck focusing solely on the year ahead.

Vendor Partners – hold meetings with them now that you know your target jobs. Inquire about their yearly goals with your company. Be a partner and see if you can meet or exceed their goals. They will appreciate your investment as a partner and work with you to strategize, collaborate with their engineers (if your company lacks an engineering department), and bring them to the table for reviews. Identify opportunities for value engineering and continue to check in and work as a team throughout the project’s completion.

More to come on what to do with the information you have gathered….

7. Create Strategic Capture Plans for Target Jobs – Link to Original Post

Create strategic capture plans for these specific jobs. These plans should encompass selling the work at every level. It’s essential to recognize that in my industry, operations is the most significant salesperson, regardless of what any salesperson may tell you.

This step is often overlooked because it takes time to develop, execute, and engage. Many salespeople in my industry claim they “don’t have the time,” but those who understand the plan and work the plan consistently achieve their goals, and more, 100% of the time.

This strategy is holistic, involving alignment with GCs’ needs, distribution, product selection, subcontractor partnerships, and collecting the right data early and often. This data should be disseminated to the team so that everyone can work together to achieve success.

What constitutes the right data?

All data is valuable, but the key is in how it is interpreted and filtered. It takes an experienced individual to do this accurately and confidently.

What do I mean?

An experienced individual listens intently and pays as much attention to what was not said as to what was said.

I will post what we use for strategic planning in the comments.

Good luck! There are very few things more satisfying than seeing a plan come together with a win.

8. Use Your Check Price to Add Value for Target Customers – Link to Original Post

Offer value on other projects by bidding on key projects the GC has targeted, but bid on them knowing that you’re providing a “check price” and let your GC know. This is your value to the GC. You don’t want that job because it’s not your most profitable type of work, so don’t be upset if you don’t win it. Your purpose is not to win it but to be as transparent as possible with the GC. Let them know the pitfalls of the design, where most of the costs arise, potential risks, and more.

This is the eighth step in my “Bid Less, Win More” series.

Bringing value to your GC pre-bid isn’t hard, but it requires intention and the same hard work you’d put in if you were going after the project for a win. However, this time you’re taking it a step further by building your estimate to share. Share the man-hours, the “winning strategy” as you see it, opportunities for value engineering, better ways to build the “mouse trap,” and identify the risks you see.

This act alone also builds trust with the GC. How often do GCs receive lump sum figures or vaguely detailed estimates with minimal communication from subcontractors about the scope? A lot! Therefore, share your insights, the scopes that could be easily missed, questions you would ask other subs based on your estimating experience.

These “check price” estimates, as subs often call them, are better described as “second estimates” for the GC to validate what they are seeing from a cost, scope, materials, labor, equipment, and risk perspective. When done correctly, they are immensely valuable to the GC.

Do you know what else they represent to the subcontractor? A significant knowledge exchange, another opportunity to strengthen your relationship, and a chance to solidify your company as the one the GC wants to bid on their projects. This is because they know your number will be well-vetted, and your estimate will be thorough. This equates to your value!

These second estimates pay substantial dividends when you bid on the target jobs you have identified for your company. The previous exchange of information should give you great insights into how the GC assesses projects, scopes, bids, and more. Use this information to your advantage when striving for a win!

9. Align Your Trade and Vendor Partners to Target Jobs – Link to Original Post

Align your trade and vendor partners for your target jobs. These are the jobs you’ve had deeper discussions about, and you’re finding the “winning mousetrap” together by optimizing design, strategic purchasing, and better constructability plans. Involving your operations team in this process allows them time to strategize and plan, ensuring 100% buy-in from day one.

This is the ninth step in my “Bid Less, Win More” process.

What does it mean to align your subs and vendors? If you bid to all 15 distributors in an effort to “get the lowest number,” you don’t have a strategic partner. We work with only three distributors due to the product lines they carry. This approach allows us to be more open, strategic in our approach, and communicate with them as members of our team rather than simply sending out requests for quotations (RFQs), not speaking with them until the bid day, and then making them deal with any oversights because we technically provided them with a link to the entire set.

We like to approach them at the beginning of each year after sitting down with our A Tier GCs and identifying our target list. We share our list early to get them thinking, involved, and working with us to develop the best approach. This gives them more time to strategize, dissect the design, and collaborate with their manufacturers to come up with a winning solution. It’s also an opportunity to gauge your annual sales with this vendor, potentially allowing you to incorporate tier pricing into your bid early, based on what the year holds for your company.

This is an excellent time to involve your operations team in the process. Having them at the table this early enables you to understand any nuances and construction approaches they may identify. They may also offer unique insights into the site, especially if they’ve worked there before or visited it previously. These sessions are crucial for building the winning mousetrap and securing the targeted job.

10. Deliver What You Sold and Constantly Communicate – Link to Original Post

Deliver what you promised and maintain constant communication.

The tenth step in the “Bid Less, Win More” process may seem simple, but delivering on what you sold requires the effort of your entire team at every level, regardless of their position.

How can you make this happen?

A project Kickoff Meeting is an excellent way to start and set expectations for everyone, from assistant project managers to the accounting department and owners. A rallying cry or project slogan is another valuable tool to keep the team focused and motivated.

This should be communicated daily—through every email, every meeting, and every conversation.

Are you ready to unlock more working capital for your business?

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