Construction Requests for Proposals (RFP) are used to make formal requisitions for specific projects or problems within the project.
The company that makes the request outlines the scope of work to be done. A vendor responds to the proposal, giving details of how they will execute the work and the cost of the project.
A well-defined construction RFP provides clear details for the scope of the project. It also creates flexibility for contractors to stand out from the competition. It clears the confusion from the construction process and saves both time and money.
Being successful in construction RFPs requires that you avoid the following mistakes.
1. Inaccurate Project Estimates
Project stakeholders are always eager to have a project started. However, if the schedules and budgets are faulty, the project is likely to experience an overrun from the very onset. The bidders always strive to outdo their rivals in the bidding process.
Wrongful expectations of the scope of work can lead to misleading estimates. Some vendors use a one-size-fits-all approach to estimate the range of the project. This, in most cases, exceeds the initial assessment by far.
It is crucial to conduct due diligence in the pre-construction planning phase, being as accurate as possible. Project deadlines and costs from stakeholders must take into account the necessary factors. Contractors, architects, and project owners should express pending issues about the project timelines and budget.
The correct estimates of a project can be captured in the RFP process. The pre-construction phase and design services account for approximately 15% of the budget. If the RFP process identifies potential issues before the project kicks off, the amount is nothing compared to the amount you will save.
The pre-construction phase is as important as the building phase because it forms the foundation of the project. A solid foundation provides the basis for adequate documentation. It also minimizes documentation and creates a reliable schedule.
All these factors reduce future expenses.
2. Project Design Errors
Even if you allocate enough time and resource estimates but the project design is erroneous, you will most likely encounter cost overruns in the project.
Deficiencies in the project design entail inaccurate or incomplete plans. They are a common source of pain for both designers and project owners and account for a huge percent of project disputes.
Deficiencies in the project plans in most cases lead to substandard work and sometimes can escalate into legal battles. It is possible to avoid these kinds of disagreements right from the design phase. Use of construction software can minimize the errors and ensure everyone agrees.
Changes occurring in the process of construction are easy to incorporate in a dynamic digital model. They are easier as opposed to redrawing on paper.
In the contract phase, contractors and project owners should agree on the specific scope of work. The documentation should indicate all references to the project specifications like:
- Design documents
- Risk allocation
- Warranties of the work
- The process of handling unforeseen issues
The stakeholders should not forget to define a dispute resolution process. Adding an extra level of security ensures that expectations are clear. Correct project designs will cushion the project from overruns resulting from corrective procedures.
3. Lack of Planning for Change Orders
Change orders occur when one of the stakeholders realizes that the design is not working according to expectations. It also happens when they understand the need to introduce new components that were not initially captured. New fixes, requirements, and specs will result in high costs and naturally inflate the budget.
Extra resources and workforce to complete the additional initiative will affect the initial costs. They have the same impact on the budget of the project as design errors.
It’s best to account for changes in the project in the contract phase. There should be a Change Order Provision added to the contract to specify the procedures, and the budget to be allocated when changes occur. If no contingency plans are made, contractors may increase their costs upfront in expectancy of changes.
Specific construction software may enable you to simulate different solutions for changes. It will also help you allocate an appropriate budget in the pre-construction phase. Having different scenarios as solutions to arising modifications makes adjusting to change more manageable.
You will conveniently find a new level of functionality while cutting down on costs.
Scope changes are necessary. Their proactive management ahead of time reduces the chances of misunderstanding cost overruns.
4. Errors in Administration
Having solid designs, accounting for project changes, and eliminating design errors is not enough. You need to have competent project administrators. If the team is not up to speed with the progress of the project, even insignificant errors can create catastrophic results.
If there are poor lines of communication between administrators, problems arising in one aspect may not be known until it is too late.
Many project owners and contractors believe that increasing the size of the administration team is the solution to bad management. The logic is that the larger the team, the more they can be keen on details. This might not be true because a large team may lead to collaboration failures and an increase in overheads.
A suggestion to deal with problems in the administration is to equip them with the necessary tools. For example, project management software can perform the role of multiple administrators. The team can view the project from various angles and keep up with many possibilities and outcomes at once.
It is easy to change concepts digitally and make comparisons side by side. Human errors in accounting, invoicing, and use of the software can minimize delivery monitoring. A software system reduces administrative errors and guarantees the accuracy of project documents.
Administrators gain full visibility and flexibility to keep logistics of the project running smoothly.
5. Lack of Evaluation of Equipment Requirements
When putting up a construction RFP, it is necessary for the contractor to ensure that all the equipment required for the work is available.
This may call for the purchasing or leasing of additional tools. Common mistakes that arise even when the contractor owns the equipment is assuming that it will be available during the project implementation.
Ensure that there will be no project coinciding with the project in question and which will require the use of the said equipment. Check to see that it is in excellent condition and operating at its peak. Equipment that is not fully functional can increase the time required to complete a task.
Having to rent or purchase equipment when it is unexpected will increase project costs and affect the project’s bottom line. The fuel costs associated with the use of the equipment should also be factored in.
6. Misunderstanding Material Requirements
The costs of supplies and building materials can vary from time to time and from one area to the other. If the project requires special materials, do not assume that the range of cost will be comparable to the conventional materials. The best approach would be to contact suppliers and get current costs of materials and delivery.
Get an explicit specification of the materials and supplies required so that your pricing and budgeting is for the correct materials. If you are not sure of the materials needed, always seek clarification from the project owner or architect.
Not seeking clarification might get you in trouble with the project owner or other stakeholders. You have to do due diligence to ensure that you have accurate and all pertinent information for the project. Be informed that there are cut-off dates set for questions.
Within the time-frame, you can ask questions and have them clarified.
Making assumptions will make you submit a construction RFP that does not meet the specifications. Calculation errors, for example, can overprice or underprice your bid. You can have someone look through your request to ensure that you have everything correct.
7. Overlooking Risks
Risk identification and management are among the most overlooked aspects in construction RFP. Every project has its fair share of risks. Once you identify them, you should analyze and evaluate them separately.
It is only by doing so that you can mitigate or manage the risk when it occurs. Consider what could happen to the project if the identified risk happens. A risk with low probability and low impact could be easy to mitigate.
A risk with high potential and high impact may not be effective to manage. The effect on the project could be detrimental to the profitability of the project. Proper identification and evaluation of project risks during the pre-construction phase prepares you for anything that could go wrong.
8. Unrealistic Deadlines
Quality RFPS should allow the allocation of plenty of time. Right from the crafting of proposals, to reviewing of the same, the stakeholders need a realistic amount of time to evaluate the responses.
The process can become problematic if both parties rush through the process. Deadlines that are too squeezed can tamper with quality. Deadlines that are too long can, on the other hand, cause the parties to relax then rush at the last minute.
Rushed bids will always be full of errors, especially if you do not have the time to proofread. You need enough time to evaluate subcontractor bids and understand the scope of work. Do not rely on the experience of other projects to put a proposal together without doing your due diligence.
Pulling off a successful bid is more than just filling a bid form and inserting some numbers. If you think you will not have the time required to come up with an error-free bid, be wise and wait until you have enough time on your hands.
9. Not Visiting the Site
Before submitting your RFP, you should have a good understanding of the existing site conditions. Knowing what to expect at the site will prevent problems from arising if you are awarded the contract. Take note of unique site conditions like limited accessibility.
Check to see if the location will give rise to additional costs on items like labor, transportation, and equipment.
In most cases, a pre-bid meeting is held at the construction site. Alternatively, a site visit follows the meeting. The meetings are necessary because they provide a platform for the team to answer questions relating to the project specifics.
If you do not attend a pre-bid meeting, you will miss out on essential clarifications, especially if the session is mandatory.
10. Fixing Cost Overruns in Projects
The systematic reduction of costs should be the priority in project planning. Take the time to evaluate the reasons for the cost overruns. Incorporate the right solutions to enhance your ability to carry out complex projects while maintaining excellent control.
Your planning efforts will always pay off if you use the assistance of construction productivity software. You will be more efficient, and overruns will be kept at a minimum while increasing your profits. Do not just take cost overruns when they come; always be ready with planning solutions.
Construction RFP: Final Thoughts
A well-written construction RFP will clear all confusion and will save the stakeholders both time and money. Planning at the pre-construction phase is crucial as it eliminates the chances for mistakes. Unfortunately, most of the errors that occur are easily overlooked by the project owners.
Project mistakes can lead to cost overruns, which eventually lead to the project being expensive than initially planned.
Cost overflows can lead to misunderstandings which can escalate into legal battles. If you want to avoid such a scenario, avoid making design errors, not planning for change orders, and having administration problems.
Other sources of project problems associated with the construction RFPs include poor site management and unrealistic deadlines. You can enhance the chances of being successful in the RFP process by clarifying cost qualifications and being flexible in your approach to planning.
Having the right team with the right qualifications is also a preliminary to being successful in the construction process. Once you have been awarded the contract, ensure that you maintain high quality to achieve success to the very end.
Do you have any question? Don’t hesitate to reach out to our team.