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Buyer's Guide

by Eileen O'Loughlin,
Market Research Associate
Last Updated: February 17, 2017

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

Here’s what we’ll cover:

What Is Bid Management Software?
What Type of Buyer Are You?
Benefits and Potential Issues

What Is Bid Management Software?

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. This specialized technology streamlines the bidding process with tools for managing contact, requesting proposals, purchasing and managing and organizing contracts. 

A full-featured bid management system will typically include the following features:

Contact management Enables the tracking of all contacts and communications between organizations and contractors and suppliers.
Custom form builder Allows users to build custom bid forms.
Project calendar Enables the tracking of all of an organization's past, present and future projects.
Subcontractor portal Enables subcontractors to view upcoming projects, view information about project insurance and more.
Communication template library Allows users to customize emails and other forms of communication between the organization and contractors and suppliers.

Other features can include:

  • Prequalifications
  • Invitations for bidding
  • Online planroom 

Bidding programs for construction are available as both on-premises and 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 bidding oversight and productivity 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 control and efficient procurement processes, and is therefore focused intently on sophisticated functionality. These buyers will typically seek top best-of-breed construction bid management software systems. 

Project manager. This type of buyer works at a firm where procurement is managed from within the project managing function. These project managers are responsible for selecting suppliers and subcontractors and it therefore makes sense to use bidding technology modules offered within the firm’s project system, rather than implement a separate bidding manager 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 solicitation 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 bidding technology vendor landscape is less complex than many other construction 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 bidding applications that can be purchased on a standalone basis. Finally, construction estimating and accounting suites will offer procurement functionality to varying degrees. 

Benefits and Potential Issues

Here are some of the benefits realized from successfully adopting modern, top-rated construction technology solutions. The best bidding software construction companies can implement will yield all of the below benefits. 

Improved efficiency. Traditional bid-solicitation processes are fraught with error and require substantial time and expense to execute. By automating the process with project managing technology, there can be a substantial reduction in errors, printing costs and labor.  

Better estimates and visibility. Bid builder software can produce more effective procurement processes and in turn, provide a company with better data as they develop estimates for their clients. Moreover, they will gain better visibility into costs throughout the project by holding suppliers accountable to their bids.  

Lower costs. The best bidding system will establish highly effective procurement processes that lower costs substantially. By soliciting more bids and creating a more professional, competitive process, buyers will lower their cost of materials and subcontractors. 

Perhaps the biggest challenge with these kind of implementations is adoption. Even if internal users adopt the invitation to bid software, 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. Properly implemented, these solutions can be the best project bidding tool money can buy. But shoppers should checkout bid software reviews, demos and pricing before making any final decisions.

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