The real estate procurement process - from vendor management to bid leveling to spend tracking - can be a bear. Complexity often occurs for good reason, whether it’s due to an increase in project sizes or an appreciation for the benefits accrued from competitively bidding your projects.
If you’re a contender to medal in the bid leveling Olympics or have the enviable ability to memorize every contractor’s mobile number, we salute you. But at some point, your team will bring in a new Project Manager who will need time to master the ins and outs of your company’s process.
There are a few standard procedures you can implement to set them up for success from the start. The good news is that these measures benefit everyone involved, including veteran PMs, by creating a consistent, scalable process.
Create a library of bid leveling templates for your most common type of projects
From a distance, bid leveling spreadsheets take basically the same format. The devil, as they say, is in the details. Avoid discrepancies from the start by templatizing the formats most commonly used by your team. Consider the following as you prepare the format:
• How granular should the line items be? Even if your company doesn’t have a hard and fast rule (most companies don’t), you probably have a sense of the sufficient level of detail you want for your core project types.
• Does your company use CSI codes or internal accounting codes? If so, keep a copy of the master list in the same file library.
• Is there a preferred unit of measurement for some items? For example, if an embankment is needed, one approach might be to quote specific items be paid for by the hour, such as a roller for compacting, and water to aid compaction to be paid for by the gallon. Another approach could be to set up the bid item as "Embankment, Compacted," which would be paid by the cubic yard. Be clear about which method works best for your reporting.
Make the Best and Final Offers from past projects readily available for reference points
Documenting the evolution from a vendor’s first offer to their Best and Final Offer (BAFO) is a good policy for the entire team, and it’s enormously informative for new Project Managers.
First, knowing the Best and Final Offers for past projects will give your new PM some idea of where a comparable project will end up. If the interim revisions are also documented and available, he or she may be able to identify line items that caused confusion in the past and will need more detailed specifications this time around.
Second, reviewing historical bids might reveal your vendors’ bidding patterns. If Contractor XYZ usually starts 10% above the Best and Final Offer, the new Project Manager can negotiate confidently, even if he’s never met that contractor before.
Provide quick access to your company’s approved vendor list
Your project is going to go nowhere fast if your new Project Manager can’t figure out whom to invite to bid. The same goes for veteran PMs who transfer to a new region or Property Managers who move to a different building.
To really maximize efficiency and quickly identify the most suitable candidates, your centralized vendor management tool should include the following items for each vendor:
• Contact details, including when and how the primary point of contact prefers to be reached.
• A company overview with a high-level project history, average project size, number of employees on the payroll and a client list.
• Summary of past projects completed for your company.
• Internal feedback on vendor performance.
Make it easy to bring others into the conversation to field questions
Your new Project Manager will refer to a colleague or an external consultant at some point in the process to clarify elements of the project scope or answer technical questions. If discussions between the PM and the vendors happen over email, it will be hard for the new participant to access the information.
Use a tool that will centralize all of the project-related communication so everyone on the team can access the chat history. This will also give you an opportunity to ‘listen in’ and get a good sense of the new Project Manager’s working style, strengths and opportunities for coaching.