The Power of Bid Tabulations: Tools for Winning Highway Projects

TL;DR:

If you're involved in highway construction and bidding, you've come across bid tabulations, or bid tabs. But what exactly are they, and why should you care? Bid tabs are more than just a record of prices - they’re a roadmap to understanding your competition and making smarter, more strategic bids.

What Are Bid Tabs?

Owners provide contractors with a summary of estimated quantities for a project such as a highway. Contractors are responsible for providing a unit price for each bid item (e.g. tons of asphalt, cubic yards of grading, lump sum for mobilization) which is multiplied by the owner/engineer’s estimated quantity to equal the extended price. Add up all the extended prices and you get the contractor’s total bid price. In unit price public bidding, low bid wins. When the job is awarded, you get to see everyone’s unit prices (aka bid tabs) for each item on the project. This information, available after the job is awarded, is a goldmine for contractors looking to improve their strategy. Not only can you see where your competitors landed on pricing, but you can also begin to understand why.

Why You Should Be Looking at Bid Tabs

If you’re serious about winning more work, you should be studying bid tabs after every project. They give you insight into how your competitors think, how they price, and where they’re willing to take risks. If you're getting beaten badly on bids, bid tabs will show you why and how. By analyzing these documents, you can pinpoint areas where you consistently miss the mark - and adjust.

People Are Predictable: Recognizing Patterns

One of the most valuable lessons you’ll learn from bid tabs is that people, and companies, are predictable. Competitors often follow specific bidding strategies, and these strategies show up in their pricing patterns. Recognizing these patterns gives you an edge. Just like in the NFL, where offensive and defensive coordinators study every move of their competition each week, estimators must also know everything about their competitors. Bid tabs are part of your playbook.

Cost vs. Price: Understanding the Difference

Your cost is your cost, and your profit is your profit. Combined these two equal your price. Your cost is what you spend to get the job done and the price is what you charge based on the market. Don’t let competitor pricing sway you into underbidding or overbidding without understanding your true costs. Bid tabs help you see how the market behaves, but they shouldn’t make you lose sight of your actual cost structure.

Forecasting Competitor Bids: A Key Estimator Skill

Part of an estimator’s job is not just to estimate a project correctly but to predict how your competitors will price it too. This is where bid tabs become an indispensable tool. You can pull in historical pricing data from similar past projects and start generating adjusted predictions for every competitor. What do you see? What are they likely to see? By tracking your forecasts and comparing them with actual results, you can refine your approach and improve your predictions over time.

Study the past if you would divine the future - Confucius

Process: Using Bid Tabs to Make Smarter Decisions

When analyzing bid tabulations, you’re asking yourself several key questions:

• What does historical pricing tell me about where I can expect both my competition and myself to land on total bid price?

• What do I think my competitors' prices will be?

• How accurate have I been on past forecasts against these competitors?

• What does the data say? What does my gut say?

• What are the implications if I am wrong?

By pulling in similar past bids, you can generate informed predictions. Bid tabs provide a critical data point that, over time, helps you make better decisions. You can measure your accuracy and refine your process after every bid. This is a continuous improvement process. It applies to single bidder jobs too.

The ROI on Analyzing Bid Tabs

Say an estimator’s time is worth $100 per hour. If you handle 50 bids a year and spend two hours analyzing bid tabs per bid, you’ve invested $10,000 in that analysis. Now, imagine the estimator is bidding $50 million worth of work per year and winning $25 million of it. If analyzing bid tabs helps you increase your margins by just 2% on that $25 million, you’ve just made $500,000. On top of that, if you can win say an additional $5 million in projects at a 10% gross profit, you’re looking at an extra $500,000. All told, that’s a $1 million potential return on a $10,000 investment. Where else can you get that kind of return? The juice is worth the squeeze.

To The Haters

People have told me: “We don’t bid off tabs. We just bid our costs plus a reasonable profit”. The two are not mutually exclusive. You can estimate your costs accurately, get the profit you deserve, and use historical bid tab data as a reference point to prepare a sound bid. Not everything can be predicted. Sometimes people do crazy s$#@ on bid day. You may lose a close bid now and then. But if you use the scientific method to test your hypotheses and improve, over time you’ll win more. Plus it’s exciting to see how close you can get on your picks.

Back in the day, we had a competitor we used to outbid with ease for years. Then they were acquired by a larger, more sophisticated company that really understood the power of bid tabs and data. In just a few months, their approach completely shifted, and suddenly, they were beating us by narrow margins. They beat us by $7K on a $5 million job 8 miles from our plant. I was incensed. That shift in competition forced us to step up our game, pushing us to analyze bid tabs more closely and refine our costs, takeoffs, and pricing strategies. We had to start forecasting their moves just to stay competitive. It made us sharper - and it will do the same for you.

Conclusion: Use Bid Tabs to Win More Work

Bid tabulations are not just numbers on a page. They’re an invaluable tool that can help you understand the market, predict competitor behavior, and win more profitable bids. By studying them, recognizing patterns, and refining your approach, you will improve your odds of success. Whether you're aiming to win more work or simply get better returns on the jobs you do win, bid tabs are a data point you can’t afford to ignore.

Our Gift 🎁 To You:

For the first 3 contractors to reply to this newsletter, we’ll prepare for you a free, AI-driven pricing forecast of 1 DOT project you have bidding in the next month or two. First come, first serve 😎

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About the Author

Tristan Wilson is the CEO and Founder of Edgevanta. We make software that helps contractors win more work at the right price. He is a 4th Generation Contractor, construction enthusiast, ultra runner, and bidding nerd. He worked his way up the ladder at Allan Myers in the Mid-Atlantic and his family’s former business Barriere Construction before starting Edgevanta in Nashville, where the company is based. Reach out to him at [email protected]