Tuesday, January 13, 2015

2015 Schedule Impacting Bid Results

As we are preparing for 2015 Capital Projects, what are the recent trends in the industry that are affecting the bid results? Some have experienced the benefits of bidding projects that are scheduled for the second or third quarter in the first quarter or even in the fourth quarter the year before. However now that we are well into 2015, there are several factors that need to be considered when bidding for upcoming 2015 work. 

2015 Trends

So far 2015 has started with several conditions, although not seen to this effect in recent years; the conditions are not surprising with the situations leading up to 2015. Projects that have been pushed back and delayed years previously are now being slated for 2015 work. Based on the amount spent on construction over the past 3 years in the U.S., the average growth of construction projects was 7% more each year (Huesman, Holland, & Langley, 2015). There is more work in the market place and not enough man power to execute the projects. Contractors are even turning down the invitation to bid because their backlog is already full for the construction season. With less tier one contractors bidding, it becomes more of a challenge to receive the most competitive pricing for upcoming work.

Upcoming Projects

With capital projects slated for 2015, it is crucial the projects get bid out as soon as possible while still allowing time for the proper design and expectations to be factored in. Inviting more contractors that are qualified for the job will also be beneficial. Not only local contractors but also inviting regional contractors will yield a competitive price. Due to the amount of projects in the market place, inviting more contractors  then one might normally expect, with the expectation a few might decline the invitation, competitive prices are still obtainable.

During the bidding phase, one might also ask the contractors their schedule for performing the work. Having firm start dates and completion dates might be a contributing factor of inflated pricing. If possible, it would be better to work with the contractor on their current backlog and still meet milestones such as substantial completion before end of summer opposed to project start on a firm date. Their still may be a narrow window for the work to take place, but the more one is willing to work with the contractor during the bidding stage, the better the prices will be.

With the construction season rapidly approaching we wish you the best of luck for your 2015 Capital Projects.

Works Cited
Huesman, J., Holland, L., & Langley, T. (2015, January 02). Construction Spending.
Retrieved January 12, 2015, from United States Census Bureau: https://www.census.gov/construction/c30/prpdf.html