When funding becomes available in the government's infrastructure budget, they will issue a multi-featured press release or announce a “call for bids.” Part of the process at the beginning of any project that requires quality work is the need for estimates or bids.
Thus, “Buyers” or “Customers” will make a call to action due to the resulting factors. Therefore, the target audience is small or large construction company entrepreneurs. As well as real estate investors who buy foreclosed homes with the goal of fixing them up and selling them for a profit.
3 types of RF
The main objective of the 3 types of documents that request information (i.e. budgets, proposals, bids,…) from companies and entrepreneurs are the results that can be achieved by each bidder. Here are the 3 most common documents.
- RFQ – Request for Qualifications
- RFI – Request for Information
- RFP – Request for Proposals
These are the most common requested documents in the construction industry and in projects financed by government bonds and other forms of money. In other words, they are designed to extract the qualifications of subcontractors, vendors and suppliers, work history, personnel, equipment, certifications, etc.
The most common is the Request for Proposals. Additionally, it may be an “open bid” or an “invitation only” offer from companies that are likely favored by the “Buyer” or “Customer”.
In fact, with this detail and the terms of the contract, you will know what their formatting involves and how to present them to the buyer. General contractors are the main bidders in the construction industry, but what is more common are subcontractors, vendors, and suppliers who want to win a bid “with these general contractors.”
Therefore, if you are a small business owner and feel more than qualified to perform the tasks required to complete a particular job, then a proposal should be created for your company.
What is an RFP in construction?
Therefore, requests are to get the best purchase or value. The most popular request is to obtain a “Request for Proposals” (RFPs) (also known as RFBs, request for proposals…). It is the final phase of documentation required for a pre-construction development meeting and/or project. Furthermore, it is the most profitable part of the bidding process for players in the construction industry.
For example, in the construction industry, there may be more than 100 maintenance and construction companies in a given region. They can all be considered general contractors with subcontractors working for them, but they are the “umbrella” company that will submit a proposal for a multi-million dollar construction renovation project in that region. The bidding process is the outline of the entire project.
It will show you exactly what is needed for the project, including all costs, materials and labor values. A good response to RFPs is to have all equipment, labor, shipping and material costs/estimates, and insurance. This is just to name a few elements of a good response to them. Other important elements are credentials, experience and knowledge to resolve the problem or issue that the customer has.
The Steps to a Successful RFP in Construction
Here are some easy steps to be successful in submitting a winning RFP.
1. The bidding company must “ultimately” know what it is currently working on and what it is capable of working on in future projects. When responding to an RFP, it is mandatory to attach a proven past performance page and a resources page at the beginning of the proposal. It is the outline of specific details.
- past job performance
- start/end dates
- list of subcontractors and contact information.
- bank references/references
- shipping prices/estimates or materials/labor
- type of equipment owned (or able to rent with company names)
- all necessary documentation (i.e. legal documents, certifications, authorizations, licenses, credentials, insurance/guarantees…).
2. Before submitting an RFP, bidding companies must visualize “what the winning proposal will look like” in general. The quality of work is excellent and almost all bidders will try the lowest bid including “quick turnaround, best quality and value”.
For those requesting bids, it helps to have everything organized according to the subject. For example, if technology is involved, the computers and equipment may be the work of a subcontractor, so the general contractor may have to submit a page dedicated to that section of the proposal.
They may have the type of equipment, software and other technological components that this part of the construction project may need. Hiring a subcontractor is what a general contractor needs if it is one of the line items in the RFP.
That's why it's important for an RFP to be detailed and organized so bidders know exactly what is needed. In general, the RFP can have deadlines, brands/manufacturers, specific types of work or tasks, and so on.
3. The INTRO is the simple part of the RFP because it contains the direct questions or problems that the company requesting a bid wants from the respondents.
In fact, what they want and need to be done to resolve or correct their needs and wants will be highlighted and detailed in the RFP specifications; or should be.
4. All requirements and criteria sections of the RFP typically show “how the winning proposal” will be selected. Naturally, it depends on the respondent's capabilities, experience, financial management and general presentation of their services and products. There are updates and specifications for these tenders.
5. Deadlines and time management are important in RFPs. Therefore, being upfront about the importance of the proposal's timeline or work schedule is critical to selection.
6. The RFP and its tasks or “punch list” will all be different in scope and work, as each job or work project is different. In general, electrical work, for example, may have similar technical aspects, but the components of the electrical project will be different on each job. Ideally, this is what makes the experts a 'newbie'.
The most common RFP characteristics
Once all proposals are received before the due date and with the final posting date stamped, they will be reviewed and narrowed down to a select few. Some respondents may be too general in an RFP; alternatively, they can also be very specific. Any of them can “waste” an entire chance for a company requesting bids to be selected.
Thus, a winning bid “achieves all the tasks or problems” that the company requesting the bid wants and needs, but at a reasonable cost and with best value in mind.
However, when a company writes a draft RFP, bidders may have the opportunity to review it. As a result, this is the perfect opportunity for questions/answers to be addressed.
Construction RFP Dos and Don’ts
The organization, requirements and stakeholders of each construction project are developed with dignity. In fact, each RFP should clarify in detail what it expects from bidders. Interviewees may have questions about specific details of the project. For example, do “floor materials” need to be from a specific region, brand, manufacturer… etc.?
“What about the types, styles and other materials used, such as grout? Do they also need to be from a certain region, brand or manufacturer?”
This is what will be seen in a detailed RFP. Now knowing when and how to ask the applicant is the trick. Here are the do's and don'ts of a typical RFP. Because of details like this, clarity is key, as is the dollar amount being estimated. It also provides a better understanding and insight into project needs.
What to do
Set expectations
When an RFP is unclear about its specifications or general requirements, confusion can turn into chaos. Let there be “no unclear expectations.” Additionally, an RFP will suggest a certain outline needed within the layout of the RFP itself. It also helps differentiate bidders.
Qualifications and estimates
When a good RFP is sent to the company requesting the bid, the scope of work must be clearly defined. Cost estimates and qualifications are mandatory; therefore, meetings are normally held for this. There are “hard and soft” costs in the bidding process. It is crucial that work does not exceed budgets in several sections of the RFP.
To schedule
Collaboration and communication will keep things on schedule. The entire team will be dignified because, during construction (and when you least expect it), something can go wrong. A pipe that was recently installed bursts, power goes out when the electrician leaves... and then it's up to the team to come together and help each other overcome these schedule blockers. This is when a team effort shines.
And with this optimal peak performance, it becomes the key to better scheduling performance. However, it is necessary to commit to everyone's collaboration schedules, along with good communication skills. Consequently, all subcontractors, suppliers, vendors, and employees need to be focused on the “scope and work” of their RFP proposals.
Either way, realistically setting goals and completion dates for everyone involved in the work is an ongoing team effort.
Flexibility
While the RFP becomes a focal point, it is also a negotiation between the buyer and seller. Flexibility with each other in terms, agreements, estimates, and other facets of the contractor's work is also important. In other words, agreeing on terms on both sides works more easily, allowing everyone to be successful before and after the contracted work is completed.
Never assume
As the old saying goes, “never assume.” When an RFP is released, never assume that interviewees' expectations will be met. They have to do it alone!
Ignore comments
It is a fact that, in a competitive bidding process, everyone is “on alert”. Valuable information and data may be retained by everyone involved in the bidding. Improving ties between each other will be determined by communication efforts with both sides of the RFP spectrum.
Unrealistic deadlines
Don't set an unrealistic deadline! To receive a quality RFP, deadlines must be defined according to the complexity of the RFP terms. Evaluating all the responses will take time, so it is easier when there is adequate time to get a better quality result.
What is a request for information (RFI) in Construction?
Consider that all documents have some type of gap or conflict that can be resolved in the RFI process. The need for other corrections within the RFI is best “addressed” months before work schedules are released to everyone involved.
An RFI is a formal document for requesting information on various topics. In most cases, subcontractors ask the general contractor for details of the subcontractors' work specifications (it's also one of the ways you can catch an error in the RFP).
The RFI is used by clients to collect specifications prior to the bidding process. Various companies and companies can apply for anyone. (This is also a way to find out how much bidders know.
Construction RFIs are often the most requested by small businesses, especially in the quality control department. The quality of the construction development process is due to these important documents.
RFQ or request for quotation
A Request for Quotation consists of written estimates or quotations regarding what services, work performance, and goods that will be part of the project will be bid for. They are detailed and have main features. In their entirety they must be presented with materials or samples of previous work with financial proof. The quote package should be detailed so that all items included receive attention. This is an essential part of the RFP.
Differences in the three documents
RFP, RFI and RFQs are complex documents for those who have never written any of them. Their differences are practical for the average business or company that wants to sell to the purchasing department of various agencies, local, state or federal government initiatives.
RFPs are the main “Request for…” in the contracting phase of a construction project. The objective is to hire experienced and qualified companies to work on specific jobs or projects. These jobs involve multiple tasks and skills to complete, so by technical proposals as a tool to search for the right companies, an RFP or Request for Proposal becomes the liaison tool for suppliers, business owners, government agencies and vendors.
RFQ is ideal for potential suppliers and vendors who want to be part of a contract that needs their products or supplies. For example, the potential supplier may be required to provide 100 vending machines at a local government-run air base. A quote to cover the full cost of services is required from the respondent when writing the RFP.
RFI is ideal for the questions and answers needed to resolve the question or problem stated in the RFP. For example, a question could be asked: “How long will these vending machines be needed or will they not be purchased but rented?”
Resolving “gaps, conflicts,…ambiguities”, as the bidding process develops, costs may change; That's why it's important to stay alert when RFIs are sent and responded to. This also works as a tool that benefits customers and sellers. Thus, each is ultimately used for the pre-construction phase of a project.
Finally, with these three main documents that are part of the contractor bidding process, it is wise to keep track of your competitors as well. You will learn from them just as they will learn from you. Good sportsmanship plays an important role in hiring and so everything runs smoothly from start to finish of project completion.
