Construction Bidding Software

Soliciting bids from contractors and suppliers is a function as old as the commercial construction industry. Over time, many construction software systems have emerged to automate the bid solicitation process. Those responsible for the procurement function now have a choice of many best-of-breed bid management systems, as well as bid management modules offered within existing construction suites. We wrote this guide to help buyers understand their options.

Here’s what we’ll cover:

What is Bid Management Software?
What Type of Buyer Are You?

Benefits & Potential Issues

In most construction organizations, bid solicitation is a largely manual process that involves email, spreadsheets, faxes, and phone calls. There is little automation outside of Microsoft Outlook or similar personal productivity tools. Bid management software streamlines the bid solicitation process with tools for contact mangement, requesting proposals, purchasing, and contract management. 

A full-featured bid management system will typically include the following modules: contact management, prequalification, customer form builder, project calendar, RFI/RPF management, subcontactor portal, invitation to bid, online planroom, and a communication template library. These programs are available as both on-premises and software as a service (SaaS) solutions, although the general trends seems to be toward SaaS systems. 

What Type of Buyer Are You?

Before you dive into the details of various bid management systems, you will want to identify yourself with one of the buyer types we’ve detailed below. 

• Procurement buyer. This category of buyer is highly specialized in procurement processes and demands sophisticated functionality. Their firm prioritizes cost management and efficient procurement processes, and is therefore focused intently on sophisticated bid management functionality. These buyers will typically seek top best-of-breed systems. 
• Project manager. This type of buyer works at a firm where procurement is managed from within the project management function. These project managers are responsible for selecting suppliers and subcontractors and it therefore makes sense to use bid management modules offered within the firm’s project management system, rather than implement a separate bid management system. 
• General estimator. This buyer works in the estimating function at a firm that places procurement responsibility within the estimating department. The estimator is primarily focused on getting high-level pricing from subs, and then comparing those bids. As such, these buyers prefer to use the basic bid tracking and management functionality available within commercial estimating systems. 
• Integrated suite buyer. This type of buyer values integration of data and processes across the firm, even if it means forgoing some specialized procurement functionality. This buyer is more likely to make use of the procurement modules available within their accounting or enterprise resource planning system.   

The bid management vendor landscape is less complex than many other construction software markets. Best of breed products include eBid eXchange, SmartBidNet, and Pipeline Suite. Some project management software companies, such as Procore, Prolog, and HeadsUp, also offer feature-rich bid management applications that can be purchased on a standalone basis. Finally, construction estimating and accounting software suites will offer procurement functionality to varying degrees. 

Benefits & Potential Issues

Here are some of the benefits realized from successfully adopting modern top-rated bid management systems. 

• Improved efficiency. Traditional bidding processes are fraught with error and require substantial time and expense to execute. By automating the process, there can be a substantial reduction in errors, printing costs, and labor.  
• Better estimates and visibility. A more effective procurement processes will, in turn, provide a company with better data as they develop estimates for their own clients. Moreover, they will gain better visibility into project costs throughout the project by holding suppliers accountable to their bids.  
• Lower costs. Buyers who establish highly effective procurement processes can lower their costs substantially. By soliciting more bids and creating a more professional, competitive bidding process, buyers will lower their cost of materials and subcontractors. 

Perhaps the biggest challenge with bid management implementations is adoption. Even if internal users adopt the system, it can be difficult to get suppliers to respond to the new model of submitting their bids or RFP responses. Overcoming these issues may require mandating use of the system. Contractors should consider whether they have enough leverage with subcontractors and suppliers to make such a mandate. 

Have an opinion on this guide? Email the authors. We appreciate the feedback.