The construction RFP guide: How to build winning proposals
The construction RFP guide: How to build winning proposals
For construction firms, receiving a request for proposal (RFP) represents an opportunity to win new business. However, due to the level of detail and number of people involved, responding to a construction RFP is costly and complicated.
This post will explore common RFx documents used in construction projects and RFP trends. In addition, I’ll cover simple tips to create a successful RFP process. Finally, I’ll offer examples, templates and completed proposal examples.
There are a few different types of documents within the construction firm selection process. Generally, there are two RFx documents that come up most frequently. They are the request for qualifications (RFQ) and requests for proposals (RFP). While they sound similar, both of these documents serve a different purpose within the process. To be sure, understanding the difference will save you time and effort.
Request for qualifications
A construction RFQ is a formal document asking for details about a firms’ experience, previous projects and credentials. Consequently, the results of the RFQ may help the client narrow down the list of vendors that will receive the invitation to bid.
Most construction projects will require an RFQ of some kind. In order to make the process easier, the American Institute of Architects developed a standardized form. They call their version of the RFP a Contractor’s Qualifications Statement. Here’s an example of that type of construction RFQ.
Request for proposal
A construction request for proposal (RFP) is the next step in the project. The RFP provides all the details the firm will need to create a bid. It defines project scope, background, deliverables and more. Typically, questions in the RFP either ask about experience or technical requirements.
Some construction RFPs are issued as open bids, so any firm can respond. This is common with government construction projects. In other cases, the RFP may only be issued to a select group of construction companies. This is called an invitation only RFP. Then, when a firm is selected, the winning construction proposal often serves as a guide for the contract.
3 construction RFP trends to pay attention to
1. Partnerships over price
For most companies, construction projects represent a huge investment. While the project may seem like no big deal to you, it’s certainly very important to the client. For the procurement team creating the RFP, the stakes are high. They’re out of their comfort zone and feeling a lot of pressure ensure the vendor they pick can deliver a successful result.
With that in mind, the client is looking to work with someone they can trust. For many, finding a partner that understands their needs is more important than getting the very lowest price. Every client wants a construction firm that seems as invested in success as they are. Don’t get me wrong, there’s no doubt that pricing is still a deciding factor, it’s certainly not the only one.
2. Diversity and sustainability
More and more, companies are prioritizing partnerships with organizations who hold similar values. This trend started in general strategic sourcing but has gained momentum. In the last few years, it’s become fairly common to see questions about social responsibility included in an RFP for a construction project. If your firm hasn’t already, it may be time to create and formalize proposal content that speaks to your company’s diversity and sustainability.
3. Digital lead sources
Not only is the content of the RFP changing, but how construction firms acquire new business is changing as well. In the past, word-of-mouth referrals and reputation were the most prevalent source of new business. But now, digital marketing practices are resulting in an influx of new RFP opportunities.
Construction companies are adapting quickly. The Construction Marketing Association’s (CMA) 2020 marketing outlook survey confirms the digital trend. Indeed, more than 70 percent of construction marketing teams planned to increase their focus on social media marketing and content marketing in 2020. A robust digital presence delivers value by improving client education, building the firm’s reputation and expanding their reach.
Simple tips to build winning construction proposals
Optimize your go/no-go discussions
A winning construction proposal takes time. So how do you decide which RFPs to respond to? Afterall, no one wants to spend hours writing content for an RFP that’s a lost cause. Sometimes improving your win rate is as easy as being more selective and deliberate.
Spend a little time with the data from your past projects. Explore your previous successful proposals as well as lost opportunities to identify trends. For example, if you often win retail new build projects in up-and-coming suburbs, you know you’ve got a good shot. Alternatively, if you’ve never been selected for a commercial real estate project in a certain zip code, RFPs from that area might not be a good use of your time. Every go-no-go discussion will weigh a lot of factors, but careful consideration is key.
Additional go/no-go considerations:
What is the overall value of the project?
Are we a good fit for the client’s needs?
Will this project impact our current client commitments?
Do we have all the available resources for prompt delivery?
Does this client have future projects we could win?
Has the firm partnered with the client on previous successful projects?
Include an awesome cover letter
A well-crafted, memorable RFP cover letter can make your proposal stand out from the stack. This seemingly small touch serves as a warm and friendly introduction to your firm. In the age of efficiency it helps humanize your business during the evaluation phase, which is often a boring and robotic process.
Your construction proposal cover letter should include:
Addressees —Include the evaluator(s) names
Greeting and introduction — Be genuine, avoid “thank you for the opportunity”
Summary of RFP needs — Focus on the client’s project, not your firm
Your qualifications and differentiators — Share a success story from a previous client
Thank you and closing — Define next steps with a call to action, finish with an actual signature
Establish a clear process
There are a lot of moving pieces in your construction company. Depending on your size (and the size of the RFP), you may need up to a dozen people to complete your response. So, between your marketing team, subject matter experts, subcontractors and consultants, getting your construction proposal team aligned is going to be a challenge. Afterall, many of the people you need to complete the response are traveling regularly, working in the field and generally a little hard to pin down.
This is where a well-defined process and proposal management strategy can save a ton of time. I find using a RACI matrix really helpful for organizing proposal projects. A RACI matrix brings clarity to the process. It breaks down the process into chronological steps. Then, it identifies which person or people will be responsible, accountable, consulted and informed for the steps.
Receive and review RFP
Contribute proposal content
Compile and customize content
Because everyone agrees to their specific roles and responsibilities before the project begins, there’s much less confusion. As the project goes on, the RACI matrix becomes an easy reference point for who is doing what and when. It also helps to focus each team member on their work without getting distracted by other parts of the project.
Create highly-customized proposal content
While creating a repeatable process with reusable content is key to efficiency, customization is crucial to winning. Certainly, every proposal will contain some of the same general information. So, there’s a lot of value in creating a knowledge library to work from. However, it’s important to remember that your proposal content repository is the foundation you build from, not the finished product. But, before you jump into tailoring the proposal to the client, you have to really dig into and understand their needs. Heather Ledbetter, marketing manager at JE Dunn, explains saying:
“One of my team’s biggest challenges with responding to RFPs is figuring out what the client truly wants and needs from us and then finding innovative, creative and memorable ways of presenting our information in the most concise and understandable way. Also understanding what actually differentiates us from our competitors for that specific client and project, and showing how those strengths align with the client’s goals.”
Your content is what sets you apart from your competitors. In fact, when surveyed, 30 percent of CMA members reported that content was the most important winning factor in proposals. So it’s worth it to invest some extra time in understanding the client’s needs and making sure your content addresses them.
Leverage RFP software, tools and resources
Despite the challenges, creating your next proposal could be much easier. There are a lot of great RFP management solutions, tools and resources available. These tools can help improve your process with insights, automation and advice.
Construction Productivity blog While not all of their content relates directly to the RFP process, this blog from PlanGrid includes many insights about construction project management and collaboration.
Construction RFP databases There are several databases for industry RFPs including FindRFP, the RFP Database and Construction Monitor. The services are subscription-based, but offer a consolidated list of open RFPs.
Construction RFP examples and templates
To help prepare your next construction RFP response, consider how you would write a compelling proposal for these projects. Each RFP example below offers a different set of requirements, presented in a different style.
In some cases, the organization issuing the RFP may include a response template. The template may be for the entire response, or just one portion of it. Generally, it makes the evaluation process easier for the RFP issuer. Templates like these mean your written answers need to be even more straightforward, customized and compelling.
Kiewit proposal for Maryland Department of Transportation When responding to an RFP from the Maryland Department of Transportation, Kiewit has customized their construction RFP response to include iconic Maryland imagery. For example, the footer of several pages features Maryland’s state bird, the Baltimore oriole. The firm’s attention to detail as well as clear graphics and well written answers make this a great construction proposal example.
The value of building a better construction RFP response
When it comes to responding to RFPs, improving the efficiency of your team as well as the quality of your proposal leads to positive outcomes all around. We hope that with knowledge of trends, a solid process and inspiration from others, you’ll be well on your way to winning.