Surety Bond Professionals is a family owned and operated bonding agency with over 30 years of experience. With access to a broad range of surety markets, our expert agents are ready to assist with all of your construction bond needs.
The Procurement Process
In the business world, organizations typically refer to the process through which they acquire goods and services or “purchasing.” Government agencies refer to the process through which they obtain what they need, from aircraft to paper clips, as “procurement.” Selecting a contractor to carry out a government-funded construction process falls into the procurement category.
Government procurement at the federal level is carried out according to well-defined procedures and is highly regulated to ensure that it is fair for all parties while minimizing the risk to the government. The same is generally true of the process used to hire contractors to execute state-funded and municipal-funded public works projects.
New contractors need to thoroughly understand the process to be used for a particular project before preparing and submitting a bid. All of the time, effort, and money that goes into preparing a bid is wasted if the contractor is disqualified for not following the correct procedures or providing all the necessary information.
How Technology Has Changed Government Procurement for Construction
In the past, contractors who wanted to work on government-funded construction projects subscribed to federal publications that advertised upcoming construction projects and got themselves onto mailing lists to receive hard copy RFPs. A lot of paper was sent back and forth to communicate specific project requirements, ask and answer questions, send and receive bid packages, evaluate bids, negotiate contracts, and so on. A lot of time and effort went into the process on the part of federal procurement personnel and construction contractors.
Technology has had a big impact on government procurement. E-bidding is now the norm, with RFPs being posted online and bids being submitted electronically. This makes RFPs accessible to a wider range of potential bidders and streamlines the bidding process for both government agencies and contractors.
Contractors no longer need to search through dozens or even hundreds of RFP postings to find the ones they may want to bid on. Instead, they sign up to receive alerts via email when RFPs matching their capabilities and search criteria are posted. And instead of fielding phone calls and emails from individual contractors or contacting all bidders when there is an update to an RFP, clarification of bid requirements, or change to the submission deadline, the relevant information is made available to all through the e-bidding platform.
Technology also makes the process of reviewing bids submitted by contractors. For example, e-bidding algorithms can weed out bids that fail to meet certain requirements and therefore are considered non-responsive. This winnowing eliminates the need for procurement personnel to review every bid submitted, which cuts down the time and other resources needed for bid package review and evaluation.
Moving forward, machine learning and artificial intelligence will continue improving the bidding process, benefiting government agencies and contractors. For example, bidding on some projects is limited to contractors who hold certain certifications. AI could be used to track contractors’ certification status and notify the companies when they need to renew a certification. AI tools could also aid in evaluating cost estimates, and detecting errors or unreasonable assumptions.
Technology Improves Bid Preparation
Construction software can give a contractor an advantage over competitors who have not made an investment in such technology. Using software tools for bidding helps ensure the accuracy of cost, time, and other resource estimates. Depending on the particular software package(s) implemented, contractors improve their ability to:
- Choose the right projects to bid on based on an analysis of the risks involved
- Make sure all calculations are included when determining how much to bid
- Accurately estimate all project costs and overhead
- Ensure that all necessary documents are submitted as part of their bid packages
- Track their progress through the bid preparation process so as not to miss deadlines
Construction software offers great benefits to contractors beyond the bidding stage. It typically includes scheduling and project management features that keep a project on track, ensure billing accuracy, and help manage relationships with subcontractors and suppliers.
It may also serve as a centralized repository for documents, engineering drawings, and photographs that can be crucial evidence in the event of a contract dispute. Such information can be very helpful in demonstrating a contractor’s qualifications when applying for construction surety bonds (such as bid bonds, performance bonds, or payment bonds) or increasing the company’s bonding capacity.
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