In an age of commoditization, the value of a construction project or company can sometimes be viewed through a narrow lens: the lowest bid. While price is always an important factor for a construction project, a buyer should look at other differentiating factors of the competing firms. In most competitive bid situations, the buyer should view the highest and lowest bidder with added scrutiny. Did these two firms fall outside of the bell curve?
If they did, you must ask yourself why: Did they miss something, overestimate, or just “mail it in” without thoroughly reviewing the construction documents and specifications? In short, you must ask yourself, and them, if the firms did their due diligence to provide you an accurate bid number. If you have any reservations, focus your attention on the firms that fall within the center of the bell curve.
After examining the outliers, the remaining firms left are usually relatively so close on their bids (within a few percent), that they should, for all intents and purposes, be viewed as the same. Instead of just examining percentage points, a wise buyer will instead look for key differentiating factors that will add value either to their project itself or construction processes. Firms that focus on the three-legged stool of scope, schedule and budget usually provide a good start, but additional services can mean the difference between a good project and a great project. A few differentiators to consider are:
Improved project status reports. Sometimes firms go through the motions of producing the same status report on every project. The report may not meet the specific needs and requests of the customer. Consider firms that are doing something more substantial. For example, a firm that provides a dashboard report with red-yellow-green status lights for each key element caters to stakeholders who want updates in a quick glance. This kind of report can then go into the detail on project health items: schedule, budget, resource planning, issues, change orders, risks, etc.
Share the financials. Your selected firm should always keep you apprised of project financials on a weekly or monthly basis, whichever makes the most sense for you. They can make it part of the status report in dashboard format, detailed format, or—preferably—both. Having an open-book policy demonstrates a firm’s accountability. No firm should hide the budget status from you.
Complete transparency. In the age of real-time communication, news and information sharing, there is no reason not to be completely transparent. As the number one stakeholder, you need the latest information from your project team. Having a transparent firm on your team means that you can make an informed decision at any point based on the most up-to-date information.
Focus on safety. I think it's a given that most project managers will say safety is their number one priority on the job site. Your selected firm should provide you with a site safety plan that stresses adherence to OSHA’s Construction Focus Four Training. This program is meant to teach site supervisors, superintendents, foremen and workers how to recognize and mitigate the four leading construction site hazards, sometimes called the Fatal Four: Falls, Struck by Object, Electrocution, and Caught-In/Between. Having a written and well-communicated plan in place is the first and most important step in maintaining construction site safety.
Conduct lessons learned during the project. Lessons learned are important. We don't all do them, and those that do likely don't do them all the time. There can be several reasons why: Some project team members are off to another project after the current project is over, so they are hard to gather back together for this event. The client is busy with their full-time job and isn't interested in the post-mortem review being proposed. The project went poorly so they’re not pushing the lessons learned session very hard. The project went so smoothly that they don't think it's necessary. All these are excuses and prevent a valuable learning experience for both the client and the firm. To avoid this, several lessons learned sessions should be scheduled throughout the project. An effective method is to schedule them to coincide with major milestones or key deliverable dates. Your selected construction company should be in a state of continuous process improvement.
Make your meetings the best. Your selected firm shouldn’t just schedule meetings, they should be carefully planning them out. This includes sending attendees the notes, agenda, planned assignments and documented informational needs prior to the meeting. Doing so allows individuals to come prepared to share, contribute and be 100 percent accountable for the information they were assigned. As attendance and participation rise, you will stay on schedule and end on time. Also, they should follow up with post-meeting notes and ask for feedback within 24 hours to ensure everyone is on the same page.
Closely reviewing bids and carefully choosing a contractor can mean the difference between a good project and a great project. Always look for the differentiating factors when picking your partner. A good construction firm will follow the steps outlined above and you will both finish the project with great results and new ideas to use on the next job.