Stewarding Taxpayer Dollars: Are You Doing Best You Can?

How Online Bidding and CMS use can bring overlooked savings

One of the most often asked questions of us when it comes to our products and adoption of technology in the construction industry is, “How do I know how much I’m saving?” Sometimes, it comes in the form of, “How do I know if this is the right move? Is it working? How do I sell this to management?” These are all important questions that cut right to the crux of technology adoption in just about every market. At the end of the day, whether you are a business out to make a profit, or an agency managing tax dollar-fueled budgets, the end game is still the same; just how much bang are you getting for your buck?

It’s important to pause and reflect on this question since its answer is almost universally the decision point on whether to adopt or not. And the construction industry is fundamentally built upon the premise of accounting for every dollar spent, be it for funding tracking or for calculation of profit. Regardless of which side of the table you sit on, the stewardship of money is priority number one. Quantifying it, however, can be daunting. The default approach of manpower, labor, and equipment is a good starting point. But what about all the other costs seen and unseen? The costs that seem unquantifiable, yet with the right tools, can become quantifiable?

Let’s look at online bidding; a technology that owes its last round of adoption to the pandemic and the shuttering of many purchasing departments during COVID. Sure, we all understand what the term “online bidding” or “digital bidding” encompasses. Prime contractors answer solicitations by any of several methods of submitting bids: scanned page .pdf’s, digital forms and spreadsheets, even more advanced systems like Bid Express® which allow for contractors to simply enter amounts, digitally sign attesting to their amounts, upload bond and insurance paperwork into a digital lockbox which opens at a predetermined time. But what effect does using a digital platform like Bid Express have on the dollars? Well, for starters, digital bidding has made it easier for respondent contractors to view and respond to bids. Digital advertising has allowed for the casting of a wider net overall. Given that you have more touchpoints, and therefore more prospective bidders, over time contractors have had to sharpen their focus (and pencils) as to the true value of the job in order to remain competitive.

Furthermore, utilizing a system with a series of box and form inputs with checking for conformance, like Bid Express, severely limits and nearly eliminates incomplete bidding. Incomplete bids waste valuable time and resources sorting through what’s missing, raises the potential for protested bids, and therefore the cost for rebidding. Each of these last four situations has a cost; a human capital cost in terms of time, and time that equates to dollars. Those costs over time add up. Finally, utilizing systems like Bid Express and a CMS system like Appia®, where bids can be both analyzed pre-award for token prices, unbalanced bids, and other schemes typically seen by contractors to gain a competitive advantage become clear allowing agencies and owners to make better, more informed decisions about who the true responsive and responsible bidder is, reducing the chances of taking the wrong low bid, only to suffer extended costs through a variety of low bid schemes during construction for making up what wasn’t in the bid.

Now, pivoting to use of a CMS like Appia, there are also hidden cost savings that aren’t thought of, beside the undisputed streamlining and efficiency of the management and execution of the contract. Take for example, a consultant performing construction engineering and inspection on a project for an owner agency. Said owner agency receives an invoice for the inspection services and has a question regarding overtime on the project by inspection staff. Turning to Appia, the consultant is able to quickly answer questions about the reason for overtime based on field conditions and questions of the owner regarding the appropriateness of the additional costs. The owner, satisfied with the answer, processes the invoice without issue the same day. What could have turned into a more exhaustive search for paper records, including a trip to the site and questioning of the staff, has turned into a thirty minute task which has allowed the invoice to be approved for payment, thus potentially saving a delay that would otherwise extend the consultants Days Sales Outstanding (DSO). That reduction, while small like the example in bidding above, when taken into account in the aggregate accounts for significant reduction in interest on money outstanding to the consultant, and thereby reduces overhead costs incurred by the owner agency.

And yet, these are just two examples of how use of digital technology for bidding and project management can have positive effects that are unforeseen or unintended in the case of business and management of the limited resource in the construction industry known as funding. Proper stewardship of the public’s money begins with good planning and ends with excellent project management. There are fewer, more impactful technology solutions which, in the aggregate, affect the periphery of the industry more than digital bidding and digital project management with products like Bid Express and Appia. So go ahead. Make the move. Try technology out. And worry about the adoption costs less. The proof is in the pudding.