How to Succeed at a Project Auction?

By Andhika Nurrizky Alfarobby | Published On: 7 November 2022
How to Succeed at a Project Auction?

Understanding about Project Tender has been discussed previously, and this article will discuss how to win a project auction. The project bidding process is an essential component of any construction project; bidders must estimate realistic costs, including profit margins, for the work to be profitable. So, before learning how to win a project, you must first understand what a project auction is, what needs to be considered, and how the project auction procedure works. 

What is a Project Auction?

Project auction, which emerges from PM, describes the process of submitting and approving bids between a construction company and its customers. The project bidding process gives a prospective customer a proposal to build or manage a structure.

To make a construction bid, accurate cost estimates must be used, and the lowest bid of all competing contractors must be submitted. The bidding process begins with an examination of the construction plan and the calculation of material quantities.


3 Things You Need to Pay Attention to Before Conducting Project Auctions

It is critical to understand the key components of a project auction. You should be aware of these elements whether you are a project owner or a contractor.

There are various types of project delivery and procurement methods, each with advantages and disadvantages, so you must determine which one is best for you. The following are the most commonly used construction bidding methods and contracts.

Determining Delivery 

Methods When starting a construction project, project owners, construction managers, and contractors are responsible for defining the responsibilities and risks.

  • Design Bid Build: This project delivery method includes a design phase in which a designer creates a construction document. These documents are then given to the contractor, who will estimate the project’s cost and make an offer to the project owner. After that, the project owner will evaluate the bids and choose a contractor.
  • Design-Build: An alternative to design-bid-build in which the contractor is responsible for both project design and construction.
  • Construction Manager in Danger: The construction manager is committed to providing a construction project with a guaranteed maximum price (GMP).

Choosing a Procurement Method

The following is a summary of the primary responsibilities of project owners and contractors under the two most common construction procurement methods.

  • General Contracting: A general contractor is hired by the project owner to build the construction project. Contractors perform construction work and may employ subcontractors to cover specific areas.
  • Construction Management: For each type of construction work, such as plumbing, electrical work, or masonry, the project owner hires several subcontractors. This requires a significant amount of effort from the owner and is recommended for larger construction firms.

Selecting a Contract Model

To create a legally binding agreement to execute a construction project, the project owner and contractor must agree on a contract model. Here are a few examples:

  • Contract for Cost and Fee: The contractor is required by this construction contract to report costs as they are incurred rather than deducting them from the budget. The project owner then pays the accumulated costs plus the fixed costs agreed upon with the contractor before the project’s implementation.
  • Contract with a Guaranteed Maximum Price: The contractor determines the maximum guaranteed price for the project owner in a Guaranteed Maximum Price Contract (GMP). Even if the cost exceeds the contractor’s construction estimate, the contractor must commit to this price.
  • Time and Material Contract: In a time and materials (t&m) contract, the project owner pays an hourly rate for labor, and the contractor purchases materials as needed. It is an excellent choice when the project’s scope is unknown and close supervision is required.


What is the Project Auction Procedure?

A construction project will begin an auction process, with the announcement made via the internet, newspapers, and fellow owners. A construction project’s bidding process consists of the following steps:

Keeping this in mind, following these steps during the project bidding process is best.

1. Request

When the owner submits a request for a quote for the project they want to implement, this is referred to as a Request for Proposal (RFP). This entails requesting bids from the company on all of the materials listed in the previous section.

2. Subcontracting

For some projects, the general contractor will solicit bids from subcontractors, though this can often be delayed until the contractor wins the bid.

3. Submission

There will be a deadline for proposals. The contractor submits the offer before or on the deadline after detailing the information requested by the customer.

4. Options

There is a time when the customer accepts all of the bids submitted. They will then select the bidder who best meets their requirements as the winning bidder.

5. Contract

Because of the specifics of the offer, it can be used as a legally binding contract by both parties once agreed upon. However, the customer and the bid winner will likely finalize the terms and conditions outlined in the offer and sign a valid contractual agreement.

6. Project Commencement

After that, the project will begin according to the agreed-upon schedule and bid price.


How to Win a Project Auction

Most businesses hold project auctions to expand their business or continue working with suppliers. However, there is competition in the process, and the most economically profitable will be chosen to collaborate with the seller or owner of the tender in a contract. Winning a project auction can be challenging, especially when there are so many business competitors in the same industry. How do you distinguish yourself and win the project without losing money?

Know the Competition

You can learn what your competitors are doing by observing and getting to know them. This can help you stay ahead of your competitors. Then, keep an eye on where the offer is installed.

Be Judicious With Your Bidding It’s

It’s not a good idea to bid on every job with a proposal. Take the time to craft the best proposal possible to ensure that it reflects what your organization is capable of accomplishing. Create a niche and look for jobs that will bring you to repeat business.

Build Relationships

Strong relationships are essential in business; seek to develop relationships with people who have the authority to hire your company. Identify the people who are responsible for creating new jobs and build trust with them.

Accentuate Your Strengths

Promote the characteristics of your company that make it a good fit for customers. Show the team and make it clear that you have the necessary experience to do the job correctly.

Take Your Time

Do your homework and explain how you will make the most of their investment. Talk to anyone you know who has previously worked for customers to get a sense of what they want.


That’s the review of what a project auction is and how to win. You’ll need tools to estimate costs, time, and other resources to get accurate estimates and competitive bids. Tomps is a project management application that provides tools for planning, scheduling, and tracking to ensure that bids are met during construction management. After your bid is accepted, you can begin planning your construction project using our Gantt Chart, project calendar, kanban board, and other tools.


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