Do not panic!
First and foremost – don’t panic! This can feel like the end of the road for inexperienced builders, but in fact it is just the beginning, so don’t lose hope. Our team of Project Managers in Spain, are here to guide you through the tendering and bidding process, evaluate offers, squeeze down prices and make recommendations for how you can bring the project in on budget.
Let’s have a look how we do it..
Step 1 – Produce cost estimates in the planning stage
While these are just estimates, they help clients to see whether their design and vision is affordable and attainable given their budget. They are based on years of experience, and while some will be higher, others lower, than the estimate, it gives you a guide during the design phase, to keep clients and architects in touch with reality.
Step 2 – Put the project out for tender
The tendering process to select a construction company, or suppliers, is a vital step to ensuring you have the right people involved in your project and that you are not paying over the odds. Your project managers, alongside your architect, will compile a shortlist of 3-6 possible constructors. These will be made up of reputable construction professionals, who we feel would be able to deliver the project and any constructors the clients would like to be considered.
We contact them in advance to check availability and interest in the project. If they are interested and have capacity to deliver in the timeframe our clients require, we invite them to tender. They will be supplied with the technical documentation and execution project and asked to produce a detailed quote for the project, within a certain timeframe.
Step 3 – Review and scrutinise the bids
Once all the bids are in, our team goes through them with a fine-tooth comb, comparing line items against costs from previous projects, and our estimates. We check them against the brief and against the budget and question any items, or sections that seem high. We also compare them against each other and query anything that doesn’t line up between them. At this stage, we go back to the companies with our doubts, questions and any errors or particularly high quotes and ask them to review and prepare a revised bid.
Step 4 – Whittle down the candidates
When revised bids have been received, we will review them and eliminate the highest bid, and any where the bids do not fit with the clients’ requirements. This will often leave us with 2 or 3 which are still in the running.
Step 5 – Negotiate
Next, it’s time to start negotiating and pushing down profit margins, and questioning figures, or elements that do not stack up against industry standards or our suppliers.
Having several companies still in the race, helps bring prices down, as we’re able to compare and apply pressure to reduce the costs. This process allows us to see how hungry the company is to take on the project and typically reduces the costs by 10-15%.
Step 6 – Support clients to make tough decisions to bring it in on budget
Once we have brought down the costs as far as possible, we discuss our findings and final figures with the clients and make recommendations on which company we believe would be best placed to complete the project.
At this point, if the costs are still too high, we work with the client to see if there are any elements which we could lose, or where lower quality options can be used. We will also involve the architect if the cost is still significantly over, to discuss possible design changes which could make the project affordable, or if there are any elements that can be prepared for, but completed at a later stage, to enable to project to go ahead.
Step 7 – Protect clients through a watertight contract
Once we’ve helped our clients to make the difficult decisions needed to bring this in on budget, we put any alterations back to the preferred constructor, for them to reflect in their quote. Once we have a quote that everyone is happy with, it’s time to sign on the dotted line and start moving forward with the project. But don’t go rushing in and sign whatever the company offers you!
It’s vital that the contract represents your best interests and protects you, rather than covers the backs of the company and leaves you powerless. We’ve seen some dreadful contracts in our time and have developed our own contracts to ensure our clients have the maximum protection possible.
This is also the time to implement a fixed-price contract, to avoid any nasty surprises, and put in place deadlines and milestones for the constructors to hit, along with penalties for late finishing. This is vital to ensure that the project is completed on time and on budget. Find out more about the importance of a good contract during development
This process takes time, but ensures that you have the right people in place to complete your project and there’s no fear of being ripped off, or not having the full picture of what the final project will cost.