Construction bidding goes online

Peter
Peter Kovessy
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A couple of years ago, Stephane Gagnon would occasionally arrive at his office in the morning and find the fax machine working overtime.

Stephane Gagnon, Pomerleau

When the Ottawa-based chief estimator at general contracting firm Pomerleau needed to invite subcontractors to bid on a job, he’d often program the fax to send documents overnight. But even doing that, he says, was sometimes insufficient. The machine would often remain tied up the next day.

“It would clog our fax,” he continues, calling the old system “quite primitive.”

But for just over a year, Pomerleau has been one of a growing number of general contractors using software to digitally distribute construction documents and manage bids.

Mr. Gagnon says the company saves thousands of dollars and hours of work per job by avoiding costs associated with printing and sending drawings and other documents.

He adds it also has helped Pomerleau win “millions” of dollars in additional work, because subcontractors are more willing to submit bids using the new system. That makes it more likely Pomerleau will receive a low quote.

“We need their price to win the bid ... If one subcontractor is cheaper and forgets to send us his bid, we don’t get the job,” says Mr. Gagnon.

South of the border, 62 per cent of general contractors participated in web-based construction bidding, according to a 2008 survey by the Construction Financial Management Association. That’s up from 43 per cent in 2006.

Some of the main web-based software on the market include iSqFt.com, SmartBidNet.com and SmartProjectNews.com. Pomerleau uses SmartBidNet, designed by Texas-based JB Knowledge Technologies Inc.

Developer James Benham says the economic downturn has actually been good for business.

He says a few years ago, most general contractors had a steady stream of negotiated jobs, with a client selecting a construction firm and determining a price. When the economy tanked, property and building owners gained leverage with construction companies and moved toward hard bids, where firms must compete to offer the lowest price, says Mr. Benham.

This led general contractors to find ways of bidding on more jobs, soliciting more bids from subcontractors, as well as cutting costs.

“You’re bidding (on) more work with fewer people ... If you don’t bid more, you can’t win more (jobs),” he says.

Mr. Benham says the next evolution in online bid management technology is mobile software – his firm just rolled out an iPhone application – and prequalification modules that allow general contractors to quickly gather financial data and other information on subcontractors so a job can be bonded.

“(General contractors), more than any time in the last 30 years, are being forced to innovate on every level of their business,” says Mr. Benham.

Organizations: Pomerleau, Construction Financial Management Association, JB Knowledge Technologies

Geographic location: Ottawa

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