Inside the war room on bid day

A “WAR ROOM” of a contractor on the day one large job or several small jobs are bid resembles a combination of a military headquarters, math professor’s office, psychological counselor’s office, gangster’s office and casino, all rolled into one. It’s both an exciting and scary place to be, especially when bidding on jobs that can make or break the company, when everyone there knows that the outcome at the end of the day determines whether crews get laid off or the doors stay open.

Proper management of the “war room” can mean the difference between costly mistakes being made or avoided. It is as every bit as crucial to future job profitability as generation of the perfect initial labor and materials estimates.

The process begins with creation of your bid team. The bulk of the bid team needs to be composed of estimators and project managers. It makes sense to have the senior and junior estimators who created the labor and material job takeoffs present to answer any questions senior management might have about how a bid was put together (as well as do the actual grunt work of polishing the last stages of the bid). The project managers who may be assigned these jobs should be there, especially if they have local knowledge of the architect, engineer, GC or the other suppliers.

If you don’t have a special room that’s used only on bid day, then make sure the bid-day-only fax is hooked up to the special bid-day-only fax line (if your estimators have a dedicated line to their department, this is the fax line that would normally be used). Have at least one extra toner cartridge and extra paper handy.

If you’re going to permit your other fax numbers to be used to receive bids from suppliers and subcontractors as well, make sure the front office knows this and hustles quotes back to the war room as soon as they come in. A separate phone is not necessary for each person, but you’ll usually need as many as four somewhere in the room, and at least one should be a speaker phone.

Keep your nonessential front office personnel and field guys who might wander in out of the area! God love ‘em, but on bid day, there are enough distractions.

Make sure the front office knows it’s bid day, and to hold all phone calls to management that are not directly connected to the bids.

If bidding more than one job, then make sure each job has a special, well-defined space in the room so quotes won’t accidentally get misplaced into the wrong stack. This special area for each job should include the estimator’s set of marked-up takeoff plans, the job specifications, the job folder for quotes that have come in early and copies of all specification addenda and correspondence to and from architects and engineers and subcontractors, and the “green sheet” for comparing quotes.

Everyone does an extended columnar “green sheet” for supplier and sub quotes a little differently, but at minimum the green sheet should have check-in columns for:

1. Base price;
2. Shipping, if any;
3. Tax, if any;
4. Special pricing terms and conditions, e.g., “price only good for 10 days after bid date”;
5. Addenda acknowledgement;
6. Exceptions taken to what’s called for in the specs; and
7. A catch-all fudge factor area to the far right where you can assign price adjustments to try to keep all suppliers’ quotes as close to mirroring each other as possible.

And silly as this may sound, but I swear I’ve seen it done otherwise, write everything down on the green sheet in pencil because you won’t have time in the heat of battle to use Wite-Out over ink.

If a bid has to be physically submitted to a certain person or place at a certain time that day, make sure all the minority solicitation forms, bid bonds, attestations of non-collusion and whatever other paperwork has to be with the actual bid form is done the day before. Make sure that all paperwork is ready to be given as a packet to your runner who will take the bid to the place of bid opening. Make sure your runner knows how to correctly write out words-for-numbers on the bid form; don’t assume he does just because you assume he writes personal checks!

Then it’s a matter of letting the process take place. Estimators analyze quotes for completeness and accuracy, project managers quickly double check over them and senior management begins haggling with suppliers even though everyone knows that the final prices for quotes have pretty much been pre-set.

As the moment approaches when the completed bid must be faxed or hand-delivered, have everyone step back for a second and ask himself, “Can we do this job for this price and still make what profit we’ve projected?”

Taking this single moment of individual and collective reflection might seem a little silly at first blush, but everyone present usually has years if not decades of trade experience. Most will instinctively know approximately where the final price should fall, and giving it one last “truth test” might save the company from making a huge mistake.

Kent Craig is a second-generation mechanical contractor and project manager with unlimited Master’s licenses in boilers, air conditioning, heating and plumbing. He may be reached by calling 919/851-3985, or via e-mail at [email protected].