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The Rise of Automated Bidding Software

The Rise of Automated Bidding Software

By Bridget McCrea

They go by names like Trimble Accubid, BestBid, and TurboBid, and they all promise to do pretty much the same thing: streamline the bidding and estimating process for busy contractors that don’t have the time to round up pricing via phone or email every time they have to answer one of their own customers’ bids.

Aimed at the electrical and plumbing markets, for example, TurboBid is the “only estimating software program on the market that allows you to estimate all types of work such as new residential construction, commercial, industrial, multi-family, remodeling, service work, flat rate, etc.,” according to the company’s website. In some cases, these online platforms link directly to distributors’ websites to offer up a “one stop shopping” experience for busy electrical contractors.

This, in turn, puts additional pressure on distributors to develop e-commerce sites and for manufacturers to supply the necessary data to the IDEA Data Warehouse (so distributors can load it onto the myriad bid software platforms). And while some companies have clearly gotten out in front of this new trend, the smaller, independent electrical distributor that lacks an e-commerce enabled website could find itself out in the cold as more contractors automate their bidding processes.
Cherry-Picked Pricing
At K2 Electric, Inc., in Phoenix, Jared Kredit, executive vice president, says the company has been using McCormick System, Inc.’s estimating software for several years. By combining that system with Trade Service’s cloud-based construction management software TRA-SER, the electrical contractor was able to loop its three primary distributors into the system. “The software pulls in our pricing, which isn’t quite our ‘sell price,’ but it’s pretty close,” Kredit explains. “We can usually buy at slightly better [prices], but the system itself is tailored specifically to our account.”

With the click of a button, the software cherry-picks the lowest-price option. That pricing is based on nationwide averages and ranges anywhere from 5 to 25 percent higher than what K2 would actually pay, “to make sure we’re covered,” Kredit explains. “For our material bids we can get a lot [closer] because we can manually import our pricing information.”

According to Kredit, the software’s database doesn’t cover every part or piece of equipment that K2 procures, but for major items (i.e., conduit and wire), it does include part numbers and pricing from suppliers like Anixter and Platt Electric Supply. “That’s because we’re synced up with them,” says Kredit, whose firm had to “prompt” its suppliers to participate in the platform – namely because the pricing is specific to K2. He said the process has been particularly useful when business is slow and competition for jobs is fierce (read: the lowest bidder wins and the competition is cutthroat). And while his team enjoys the automated nature of the bidding system, Kredit is quick to point out that distributor participation in it remains optional. “At this point,” he says, “it doesn’t really dictate whether or not we’d buy from a particular distributor. It’s just another way to help streamline things a bit.”
A More Traditional Software Approach
Not all bidding and estimating software is in the cloud, nor is it connected directly to the distributors that are ultimately responsible for honoring their prices and supplying the goods. That’s just fine for companies like Continental Electrical Construction Co., of Oak Brook, Ill., which has been using Trimble’s Accubid platform for about 10 years. According to the product’s (Trimble Accubid Enterprise) datasheet, the product’s integrated pricing technology allows contractors to “use a streamlined process to obtain up-to-date pricing for projects, including pricing from vendors not associated with pricing services.”
Eric Kastengren, Continental’s senior estimator, said the firm’s low-voltage division uses Accubid Classic while the remainder of the company relies on Accubid Enterprise, the latter of which was implemented about 2-1/2 years ago. The SQL-based, client server software is “traditional” in nature and not cloud-based. And while the platform does allow contractors to bring distributors into the fold via automating billing and/or pricing, Kastengren says Continental doesn’t use those functions.

Although Kastengren says the idea of looping distributors into the platform could be beneficial on faster-paced small or service jobs, he doesn’t see it as viable for larger projects. “Someone really still needs to be involved in the process,” says Kastengren. “We can’t just sit here and let the system electronically go out and get prices and upload them without any interaction between the distributor and the estimator.”

On large jobs, for example, Kastengren wants to be able to pick up the phone and talk to someone about pricing, availability, and other key points. “If the pricing turns out to be wrong – and if we put in our bid based on that pricing – there’s nowhere for us to turn,” says Kastengren. “And while the technology itself may be ‘almost there,’ there still has to be a comfort level for the people who are doing the estimates, buying the materials, and dealing with the distributors.”
Getting Distributors Onboard
Matt Hittinger, project manager at King’s Electric Service in Cincinnati, says his firm uses Trimble Accubid Enterprise in conjunction with TRA-SER, the latter of which is a subscription-based electrical pricing software that contains 2 million electrical parts from over 650 manufacturers, according to the software vendor’s website. “That allows us to link to our distributors, each of which gets a unique identifier code,” Hittinger explains, “thus allowing us to bring in their vendor pricing into our system.”

To create a bid, the estimating team pulls up the system, runs vendor pricing (either from a single source or a combination, based on the situation and pricing), and then uses the information to develop the bid. And while setting up a new vendor isn’t always straightforward – Hittinger can request that a vendor be added through Trade Service, but he doesn’t have control over exactly who receives that request at the distributor level – he says being able to get real-time, accurate quotes in an automated fashion is a big improvement over more manual efforts.

“We can pretty much get within where we need to be,” he adds, “and involve our distributors in the process. It works out pretty well for us.”

McCrea is a Florida-based writer who covers business, industrial, and educational topics for a variety of magazines and journals. You can reach her at bridgetmc@earthlink.net or visit her website at www.expertghostwriter.net.


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