The people over at Marketing Works have been working with the University of Reading on a piece of research to understand the true cost of submitting bids in the construction industry, updating the original work undertaken in 2003.
The research is wide-ranging and surveys costs across contractors, subcontractors and consultants, sectors, and project values.
This is a timely piece of research, particularly in light of the recent UK SBS fiasco. If bid costs represent significant overheads for organisations in the construction industry, how can this process be more streamlined and how can competitors make sure they are successful?
I spoke with Philip Collard recently on how things were looking, ahead of the December deadline and he shared with me some interesting findings at this stage. Philip has also shared these on his Twitter feed, so I’m not saying anything I shouldn’t!
Key findings at this stage include:
- 18% responses are from consultants.
- 9% responses came from sub-contractors.
- 33% responses came from main contractors.
- The average cost of a bid is approximately £45k, an increase of £15k from 2003.
- A significant proportion of the bid spend is now in pre-bid activities, suggesting more activities around understanding the client before developing bid solutions and responses.
- A Tier 1 contractor showed average bid costs being £200K+ for projects in £20-50 million bracket. Bidding costs equate to a significant chunk of overhead for businesses operating in this space.
The deadline to complete the survey is 5 December and input can be provided here: #bidcostsurvey2014. Results and analysis will be published in February 2015.
Follow the #bidcostsurvey2014 on Twitter to be part of the conversation.