There are a lot of different ways of soliciting construction services.  Some are very formal while others are very lax.  Some require responses on elaborate bid forms and observe a strict communication protocol, while others consist of little more than a phone call and verbal description of the work.

You can probably guess that I prefer a more formal process.  After all, this blog is dedicated to sharing formal practices, but there are circumstances where even I have followed less formal procedures.

Often this is driven by schedule.  Sometimes we simply need to validate a budget.  Other times, we have no scope of work.  Regardless of why we might decide to use less formal procedures, the challenges we face by proceeding this way will be the same.

I think it is important to understand how these challenges affect us and to remain mindful of these when we decide to proceed in less formal ways.

Bid form

If you decide not to spend the time to create a bid form you could receive quotations that are difficult to compare.

In the construction industry, there is no standard way to present a quote, so while one bidder may provide you with a detailed quote, another may simply quote you one all-in number.  If you are not clear about how you want the quote presented, you may not be able to compare multiple quotes.

This makes it difficult to review each bid and limits our ability to negotiate.  It’s also difficult to validate whether each bidder addressed your scope completely.  Without a similar or consistent break-down of cost, you will be left with just the bottom line number to compare.

Scope of Services

Taking the time to document the scope of services ensures that you are clearly communicating how you want the work performed.  Note that this section refer to “scope of services”.  This is different than the “scope of work”.

The “scope of work” refers to what you want to build (more on that in a minute), the “scope of services” describes how you want the services performed.

If you don’t document the scope of services, the service providers will interpret this for themselves.  They might assume that they will perform their “typical” services, but bear in mind that there are no universal standards for this and the scope of services will vary widely from one company to another.

In the best case, the Service Provider will document the scope of services for you and tell you what they plan to do.  Keep in mind that without having documented the scope of services yourself, the scope will vary from one to the other, this will affect how they price the work and will certainly impact your experience with the project.

Scope of Work

Just as sometimes we might skip documenting the scope of services, we might also skip the step of documenting the scope of work.  Believe it or not, I have had circumstances where I had to release a solicitation without a written scope of work.

It should be obvious that without a documented scope of work, the service provider will have to interpret the scope based on whatever you verbally communicate.  This may lead them to make assumptions or perhaps even qualify their bids.

Keep in mind that despite our best efforts to communicate the same information and perhaps even use the same words each time you communicate the scope, the interpretation of your words will vary from one service provider to another.

Once again in the best cases, the service provider will document the scope back to you to ensure alignment, but if you have more than one quote, the interpretation of the scope can vary.  This could manifest in the form of a wide spread in your bids or a heavily qualified quotation.

Qualification Questionnaire

The most commonly overlooked formality is the development of a qualifications questionnaire.

Most of the informality that I see in procurement comes from a failure to deliberately solicit qualifying information.

Even if you don’t use a formal qualifications questionnaire or even if you fail to ask for a qualification statement, most service providers will present qualifications with their proposal.  This can take the form of case studies, statements about their scale, a history of the company, or a video describing the company.

It must be noted that all of these are forms of marketing that may or may not demonstrate the firms qualifications.  Even in rare examples when a service provider supplies you with meaningful qualification information, it is unlikely that this will occur consistently across all quotes.

Closing

It is rare for me to recommend going forward with an informal quotation, but there are certainly circumstances where it may be required.

If you must go down this path, be aware of how these shortcuts impact you.  If you move forward and decide to contract on the basis of an informal quote, carry some contingency for change orders.

What about you?  How often do you request quotes informally?  Have you had lots of change orders?  Tell me your stories.

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