Purchasing roles are evolving from traditional commodities procurement to also managing project-based sourcing of services, such as construction bidding and equipment sourcing for real estate, development and facilities maintenance efforts.

Within the last year, many of the world's biggest brands have followed this trend, including some of North America's largest big and small box retailers as well as the Nation's largest and most well known retail financial institutions. Sourcing departments for many other organizations have also met the challenge of adding construction bidding to their list of responsibilities, some more effectively than others.

"For many companies the cost to build and maintain properties is significant. The unique nature of construction and facilities procurement has led to emerging technologies that enable companies to address very important aspects of construction bid management," according to Accenture's Leslie Plunkett. "These systems typically include construction specific templates and bid sheets, automated document distribution, RFI collaboration, change order management and tracking, and instant bid reporting."

Sentiments of "project-based sourcing" are echoed by the Supply Chain & Project Management lead representing the World's Largest Commercial Real Estate Services Firm:

"Our bid system ensures that, among many other benefits our firm and our clients have complete transparency and quick access to everyone involved in the construction bidding and equipment sourcing process. We report measurable overall cost savings and cost avoidance due to more detailed analysis and bid leveling functionality. This innovative platform has given our bid team efficiencies and control never before possible."

In addition to the core competencies of the leading project-based sourcing platform described above, the Head of Procurement for the same firm commented recently:

"Our bid management system is friendlier, and provides higher quality solutions and analysis reporting than Oracle, SAP or Ariba!"

CPBid Technologies entered the market in 2001 with their web-based platform specifically designed for project-based sourcing. Now, almost ten years later the company offers the TotalBid suite of construction cost control products, lead by its flagship product "Bid Automation." Blake Burns, President and CEO agrees that product sourcing is very different than construction, but that customers should take the time to make the right decision:

"If you are currently using an ERP or sourcing system there are inherent limitations to using it for project-based sourcing particularly construction bidding. Although you will likely gain efficiencies over the conventional bid process - characterized by phone, fax and spreadsheet analysis - sourcing systems don't always deliver what is expected, or what is really needed to select the lowest responsive and responsible contractor. Construction templates, architectural plans distribution, RFI collaboration, immediate bid analysis and interactive bid leveling are key components where ERP and sourcing systems typically fall short."

The Nation's Leading Financial Institution Construction and Development lead states: "TotalBid has been great for our latest round of Project Audits. We demonstrated the process and your product as a best practice that has helped to insure consistency in construction bidding, leveling and awarding. Your product has helped our overall transition back to competitive bidding (from negotiated contracts). The savings have far exceeded our expectations. I suspect we would have enjoyed some of the savings without TotalBid, but your product got us there faster and with more uniformity than we would have gotten in a traditional way. As you have seen, we have expanded the use of TotalBid to more types of projects and now our partners have started using it for procuring AE services."

In addition to understanding the cost avoidance benefits of a project-based sourcing system and an ROI analysis to include the tangible and intangible benefits of a proven, systematic process, it should also be evaluated to determine if the system models a familiar, well established business procedure. In essence, does the system model the conventional construction bidding process or is it a more straight-lined model of procurement work flow?

Construction equipment and services procurement is very different from commodities sourcing, so different in fact that each process requires their own technologies to get the most efficient and effective approach and outcome to the problem.

Leadership takes notice when benefits transfer straight to the bottom line. As the Supply Chain Management lead for a Multinational Construction Management states:

"TotalBid is very effective in how it helps us with cost avoidance. A typical project prior to the use of TotalBid would be $200k. After using TotalBid the cost of a similar job comes in at $185k, providing a consistent process with consistent results."

How does your sourcing system stack up? Schedule a live web demo to make your own decision on how well your sourcing system meets the unique requirements inherent to construction bidding. Contact us today.

TotalBid is a suite of construction cost control products. Ask your TotalBid representative for a features comparison chart that highlights the primary differences between typical sourcing systems and TotalBid.