Design-Build vs. Chasing Bids

May 27, 2011

Q: I’m having a very difficult time getting our sales and design team to focus on design-build work vs. chasing bid projects. Is it practical to split these people into two separate groups? Have other members done this?

A: Yes and yes. It’s pretty common in larger NSCA integrator companies to see this method practiced. It generally works where you would separate the sales team into a new construction projects group and then have a negotiated/direct sales group. Now, this isn’t perfect, either, as conflicts do arise when the new construction teams forms relationships with an end-user or, in some cases, the negotiated team knows of a new addition being built. You need to clarify who handles these opportunities and perhaps offer a small stipend for sales directed to the other team. What keeps popping up is the challenge of when the compensation plans don’t match the companies goals. If it all pays the same, your sales people will likely chase low-margin bid work.

Related to this, I spoke to a member last week about his frustration when it takes them three weeks to deliver a design-build proposal because his staff spends all their time on takeoffs and estimating bid jobs. Due to low margins, they have several layers of authority and hand off between sales, estimating, design, project management and, finally, administration sign off. Even in this scenario, we need to have efficiencies where smaller projects can “bypass” the complete process that a $100,000+ project would have. Developing quick quotes from past projects, in many cases, allows you to qualify the customers quickly and get their commitment prior to engineering a complete system during the estimating phase. I know a lot of you will disagree with that, but I’m just being practical. Waiting three weeks on a proposal isn’t very practical. I would set a dollar figure on when to use the more expedient quick quote approach. We continue to see the cost of working up a bid on jobs you don’t get eating up valuable time and profits. Hope this helps. –CW

Member Access