Bid Triangulation: Better Bidding for Better Projects

Systemized bidding lays the groundwork for a project delivered on time and on budget — but true discipline collects multiple quotes to maximize efficiencies and minimize risk.

Collecting three bids, triangulated for comparison, generates insights that one or two bids can’t provide. When organized and analyzed through digital bidding software, three or more quality bids reveal market price ranges, validate scope coverage, and draw balanced pictures of bidders’ estimates and qualifications.

This article explores six key advantages of three-bid triangulation, plus how to leverage the power of bidding software to keep the process on track and extract maximum value.

6 Reasons to Triangulate with Bids

Bidders come in different types, from reputable and conscientious to busy and inattentive. Some overprice their products or services, while others underprice just to get the job.

Three bids unlock the power to achieve cost savings, derisk, and meet timelines — all while building top-flight teams committed to delivering value and quality.

Triangulation puts them all in context for comparisons that overlay the full range of bid characteristics onto project goals and scope.

Making the effort to collect at least three quality bids can yield these six advantages.

1. Established Market Range

In bid collection, one bid is a data point. Two bids allow comparison. Three bids show market pricing trends, for alignment with project cost goals.

When at least two bids in the triangle are similar, a reasonable market rate begins to materialize.

Those bids that exceed or fall short of market trends bear closer scrutiny because a bid package filled with too many overcharged quotes risks losing the job, and a package loaded with low bids creates the danger of underscoping.

2. Scope Coverage

Every bidder reads bid documents differently. Lining up three bids for comparison reveals the gaps and assumptions that can corrode or pad their baseline numbers.

RFI-worthy revelations emerge from the disparities in elements that are absent from or included in each bid. Comparisons are leveled up, in apples-to-apples style, as the issuer invites each bidder to clarify its reasoning and intentions.

3. Insights Into Bidder Approaches

Insights into a bidder’s methodologies, materials, means, and methods build understanding into their approach to the job. More bids open doors to vendors who, instead of taking drawings at face value, present the highest-quality, lowest-cost options.

Soliciting multiple bids increases the likelihood of responses from bidders calling out a risk or an unexpected outcome. Their proposed alternatives offer value engineering options and design refinements for presentation to owners and design teams.

4. Derisked Award Decisions

When a mismatched bid appears in a three-bid structure, that outlier — either high or low — is immediately identifiable.

The red flags raised by the bid’s incongruities bear further scrutiny. Targeted questioning can avert the risks caused by potential issues such as missing pieces or lowball pricing.

5. Better Negotiations

The quotes sent in by bidders don’t have to be the last word, especially when multiple options reduce dependence on a single bidder.

Three or more bids empower the issuer to negotiate from a position of strength, seeking more favorable terms in line with project goals and the other bidders’ quotes.

6. Auditability and Fairness

Gathering multiple bids demonstrates due diligence, especially for public projects where scrutiny is high and contracting requirements are strict.

Three bids help scrub away any whiff of favoritism, corruption, or single-sourcing. Unintentional improprieties can be avoided, and thorough documentation justifies the final choices.

Stay updated on what’s happening in construction.

Subscribe to Blueprint, Procore’s free construction newsletter, to get content from industry experts delivered straight to your inbox.

Subscribe

Leveraging Digital Bidding Platforms for More Success

More bids don’t have to mean more work — not when they’re supported by digital bidding platforms.

Today’s bid management software offers advantages over spreadsheet-based processes that streamline analysis and instill confidence in the final awards.

Bid forms standardize scopes, enabling those apples-to-apples comparisons. Through digital forms, the bid’s various sectors can be separated out for analysis.

Instead of simply comparing the baseline quotes, the issuer can weigh the elements according to their importance. Where are the bidder’s peaks and valleys in costing? Maybe a high number in a less-important element doesn’t weigh highly enough to count out that bidder from consideration.

Software simplifies bid tracking, with up-to-the-minute updates showing how many bidders have responded and who has declined.

With bidding software, all internal team members can review consistently packaged and presented data. Collaboration is easier, and notes can be captured for future reference. Internal teams build confidence in their joint conclusions, and project owners get the transparency and due diligence they demand.

Finally, automatic data population and dynamic updating minimize risk. As numbers fly around, software prevents human errors and time lags that can skew the final decision.

3 Bids: Building a Foundation of Confidence

When systemized and streamlined through digital bidding software, three-bid triangulation creates a feedback loop from vendors to subcontractors to GCs to owners. All stakeholders operate from shared information and data sets. The questions to ask become readily apparent, and the conclusions are transparent and auditable.

Bringing more players into bidding relieves work by minimizing risk and by injecting the process with new layers of assurance. A three-bid policy, enacted with strategic SOPs, launches jobs on a basis of best costs, lowest risk, and universal commitment to a project completed at the highest possible quality.

Written by