Readers Respond: COVID-19 has increased competition among contractors

Since the coronavirus pandemic arrived in the U.S., contractors have been increasingly nervous about maintaining and building their backlog of work as jobs in some areas and sectors are put on hold or canceled.

To build their books, many firms are bidding on more projects than usual. This is increasing competition, with more contractors vying for the same project.

Associated Builders and Contractors' Chief Economist Anirban Basu said that as a result of the COVID-19 pandemic, "the average construction firm leader is more concerned about demand for their services than any other consideration, including skilled worker shortages."

Last week Construction Dive asked readers about their outlook on the bidding process in light of the COVID-19 outbreak. They were split in the amount of bidding they are doing these days, with 38% saying they are bidding on more jobs than usual, 36% saying less and the rest doing about the same amount of bidding as before the pandemic hit. They were also split evenly on whether it's been harder to find new projects to bid on; 49% said yes and 51% said no.

In addition, 48% of respondents said in order to win new jobs they are bidding on projects outside their normal scope of work. One reader mentioned bringing in new talent to help further diversify his company's offerings. Top tactics to win new projects include relying on reputation, providing a low price and a good safety record.

Readers said while they have noticed more companies competing for the same jobs, some of these firms are "buying" work by lowballing their proposals.

"Most of the numbers are in a reasonable range but there's that one that is 10% to 15% lower than the next low bidder," said one respondent.

Another reader attributed this to the fact that companies are nervous about maintaining a solid backlog in an uncertain environment.

"It is very clear that the bid market has tightened up," the reader said. "The number of primes bidding, the number of subs bidding have all increased dramatically. It appears some are buying work in a survival mentality."