In this episode, we discuss three strategies you can use to win in new construction building automation bids.
Click here to download or listen to this episode now.
Resources mentioned in this episode
Training Video
Transcript
Phil Zito 0:01
This is the smart buildings Academy podcast with Phil Zito episode 309. Hey folks, Phil Zito here and welcome to episode 309 of the smart buildings Academy podcast. And in this episode, we are going to be discussing three killer strategies for bidding new construction work. Now, when we talk about bidding new construction work, this is kind of following a logical progression, right? So in our previous two episodes, we talked about ideas to get more work. We talked about the review as scope estimate process and how that works. And now we're looking at okay, we are in the new construction side where bidding new construction work. How can we go about bidding new construction work in a way that makes us more competitive? Because for those of you who don't know, what happens in new construction work, typically, especially if it's planned inspection. And just to give you like a brief segue here, right? When it comes to bidding new construction work, you got a couple models, you've got plan and spec, which is literally the plans and the specs, right, the mechanical plans, MEP plans, and the specifications. And you're going to bid exactly those, then you have design bid, right? So you're going to design you're gonna, you're gonna come on help design the project, and then you're going to bid it and then you have design bid build. And then you have like p3, and you have IPD, and all sorts of other models. For you all we're going to be focusing on plan and spec work today. And we're going to talk through some strategies, some of these strategies are going to be dependent on you getting ahead of the plan and spec work. Others are going to be you know, hey, we're reacting to plan and spec work. So I'm going to talk about the one where you're reacting to plan and spec work, because that's the situation you're going to find yourself in most commonly. And then we will look at the rest of things. Okay. So you're responding to a bid request, right? You find about find out about a bid request somehow. And you're responding to it, what is a strategy that you can implement other than below, or playoff relationships, because I mean, those are the two primary strategies right be lower than the other people are bidding, right. And the reason you want to do that is because the GC will have mechanicals bed. And then they will pick a mechanical typically by price. And then the mechanicals underneath them will pick controls contractors, typically by price, right? That's how plan and spec work. Plan a suite projects work. Now, if we are wanting to win typical strategies below, right, so you're going to be low, you're going to be lower, then everyone else. And typically how you do that is you have a relationship with the mechanicals, you get last look at, hey, you know, you're a little high.
Phil Zito 3:15
They they and this is this is skirting
Phil Zito 3:20
the lines of legality, to be totally honest. But I would be lying to you. If I told you this doesn't happen. I'm not advocating for it right, follow your labor laws follow the laws and requirements of the contract. But I'm also telling you, this is the reality of what happens, which is depending on the relationships, they're not going to be like, you know, ABC is 10,000, you're 11. So you need to get below 10. But there'll be like you're a little high, you should go sharpen your pencil, right? And that guidance will tell you, hey, lower the price a little. Now, that's all well and good. And the other strategy, right? So you've got the the below strategy. And then the other strategy is going to be like just having favors or getting flat spec, things like that. What I'm going to tell you though, a lot of that is you're reacting to the or you're being proactive to the bed, what I'm going to focus in right here is truly understanding the scopes and alternates. So there's two situations you can find yourself in, you can find yourself in a bid scenario where you are not an approved vendor. Okay? And oftentimes, newer sales people will go and they'll say, Okay, I'm not an approved vendor, not on the bid list. I'm just going to pass now that in some cases that may be good. And this is where you've got to, you know, start learning the engineers, and the architects and the mechanicals and the GCS and the owners and kind of how they approach this right. So once you under Stan this stuff, then you're able to go and say, Alright, I know this engineer says that it's flat spec x, or this owner says that it's flat spec X. But I know they often will accept alternates. Even if it's not in the spec, in which case, you can submit what's called an alternate. So you can go and say, Hey, I know your flat SPECT, ABC controls, but would you accept alternate, and this is a simple letter you send and once you get approval for that alternate, then you can bed, I would say there's a good chunk of new construction work out there right now that you are technically not qualified to bid, that you can go and bid if you approach it from an alternate perspective. Additionally, sometimes you'll see stuff that's really stupid, you'll go into a spec, and it'll require for to 20 or four to 20 milliamp sensors for everything, redundancy for everything, this, this, this and this, and you add it all up, and it's expensive. And you can do alternate design, you can suggest an alternate design, like, Hey, I know you're requiring, you know, advanced application controllers for every single system. But maybe using application specific controllers would be useful, or maybe using programmatic protocol interfacing thermostats, right, would be useful because of the type of building. And in which case, if you get approval for that you're lowering your overall cost. So this is where understanding the scope and then suggesting alternatives comes into play. This is a simple strategy. But it's a strategy nonetheless, that a lot of people do not approach. Now we're going to move to a more proactive rather than a reactive strategy. So the proactive strategy that we're going to look at here is called spesification. Influence. And this begins before the project is ever picked up by an engineer. And this requires a little investment and effort on your part, but it pays off. So how you do this is through things like luncheon learns things like educational sessions, etc. You can go and teach the engineers that you encounter most on projects. And what will happen by doing this is as you start to educate, you will start to form relationships. One, they will start to tell you kind of what projects they have coming down the pipe, so you can get ahead of them. And you can reach out to mechanicals, you can reach out to the engineers, the architects, the owners, etc, to do influence. But additionally, as you start to understand their challenges, like here's three big challenges I would focus on right now for engineers, cybersecurity, it enabled controls, and naming schemas for data data analytics. Obviously, there's
Phil Zito 8:13
IQ, you should be hammering that with everyone. There's energy, and that's really specific to your region where you're at, you know, West Coast, East Coast, cares more. Midwest, not so much. Okay, so when we back up, though, as we we pick those three things, right, that folks are most interested in, you know, when they're like, Okay, I really don't understand IP controls, I really don't understand cybersecurity, I really don't understand how to implement haystack or naming standards, you can go and do a training session on this and cast what follows that training session, some boilerplate spec guidance. And this is kind of a death by 1000 cuts scenario where over time, because if you give them the engineers, a boilerplate spec, and you know, a lot of the OEMs tried this, you know, 510 years ago, I saw it a lot where they would write up an entire guide spec, and the engineers wouldn't use the guide spec. But if you get very specific, it's quite easy to start putting little pieces of your company specific guide spec into place. Now, what would this look like in practice what this would look like in practices? Let's say you have a naming schema, right? And you've developed automation tools to implement metadata and naming schemas as part of your project. Well, it's quite easy now to build a spec snippet that requires your metadata and naming standards. And by doing that you've already automated this So you've now created a competitive cost scenario where your cost of implementing metadata your cost of implementing tagging, etc, is going to be lowered. Now, this requires coordination with your ops team. But at this time, you're going in implementing that the same with IP controls. Let's say some of your primary competitors can't implement ring architecture or they have a product that upon power loss, the IP controls network fails, and you've got a product where the IP network stays up on power loss, well, then that becomes a spec snippet that you can put in that will automatically either disqualify or will add cost to your competitors. So that's another scenario. But this all requires you kind of getting ahead and going in and positioning things right. So that's number two, for a strategy for bidding new construction work. Now the third strategy, so we've went from immediately reactive to kind of proactive, and now we're going to very proactive, and this is going to be something that we're going to talk about in future episodes, and it's capital planning. So this is getting ahead. And this is, and these kind of tie into one another, right? So the ad alternates are competitive strategies to make the spec favorable to you, the spec influence with the engineer is going to make the spec even more flavor favorable to you. And it's also what's the Lunch and Learns are going to give you awareness of projects coming down the pipe. Now, this brings you into capital planning and capital planning is understanding an owners capital plan, this is typically a five to 10 year capital plan of how they are going to invest capital budgets into the improvement and expansion of their campuses, I'm gonna take a sip of water real quick, I'm still getting used to Arizona.
Phil Zito 12:01
Alright, so as you go, and you become aware of these projects and capital plans that are coming down the pipe, what you can do is, and this is really cool about public universities, government organizations, etc, is oftentimes they have a very clear defined capital planning project. So you know exactly what to do. Now, the really, really cool thing is, and I'll talk about this, in a future episode is called my circle approach, which is you draw a circle around a Metroplex of maybe about 20 miles, and then outside of that 20 mile corridor, your competitors are going to start to drop off, they'll start to service people outside of that 20 mile 1520 mile corridor, less and less. And so those become prime targets when you're first trying to establish a beachhead. But also those folks outside that corridor, they're typically going to have less funding, and thus less defined capital planning. They're gonna have less defined structures. And if you have a clear process for capital planning that you can bring in, then you're able to assist them with that. And guess what if you are doing capital planning, and I'll tell you where to be careful here in just a second, but if you're doing capital planning, that is a strategy to help you avoid the bidding and new construction work. From the get go, you get into a more design bid, design bid build scenario, where you're actually becoming an advisor, and you become their go to and you see this, if you go on LinkedIn, you see a lot of people who are talking about the consultative engagements their companies are doing, how they're becoming more owner focused, they're advising owners and becoming more of an owner partner. So we're going to continue to see that I firmly believe as technology becomes more IP based, as it gets more involved. And it is very much used to MSPs managed service provider relationships. And we're gonna see a lot more service provider relationships and advisor consulting relationships from the BAS industry. Now, I mentioned there's a risk with us the risk is that with some government work, and some public sector work, if you become the advisor on capital plans in the designer, you are not able to execute the work. So be cognizant of that. I saw that with when we were working on DFW airport, Dallas Fort Worth Airport, where if you were the main integrator, who was tying all of the terminals together, you weren't able to bid the terminal work. So you had to pick am I going to be the higher layer integration infrastructure, or am I going to be doing the terminal work? Now from an integration infrastructure perspective? that has a lot of upfront benefit, but down the road potentially could have less service benefit. Because if you're the one who does the terminal work, you can also typically follow up with doing the service work for that terminal as well. I'm gonna take another sip of water real quick. So these are things you need to consider as you start to do more public work. Now, with smaller organizations, this is not usually the case, you can do advisement. And you can do the implementation as well. Now the really cool thing about this with advisement and implementation is that it will often shift from a new construction scenario to a actual owner direct scenario, which means increased margins, less competitors, and you tend to have more creative control of the actual implementation. So there you have it, folks, these are three strategies to help you with bidding new construction work. I hope these helped, I hope you're able to implement these across 2022 and see results from them. I'd love for you to leave your comments and let us know you know things like Mitch is saying in the chat coffee and doughnuts, you know, that never hurts or steak dinners as well. But definitely go and let us know in the comments what you find to be successful strategies for bidding new construction work and let us know content we can be bringing to you that you would find beneficial I love doing this new format it's it's really fun. And as always, you can find everything we discuss at podcast that smart buildings academy.com Ford slash 309. Once again, that's podcasts that smart buildings academy.com Ford slash 309. This will be available on the interwebs within the next 30 to 45 minutes.
Phil Zito 17:01
Thanks a ton for being here and I look forward to seeing you next Monday, Wednesday and Friday at 8:30am Mountain Standard Time. Thanks a ton for being here. And you all have an awesome day and weekend. Take care
