No matter the size or type of vendor, finding high-quality people for your real estate projects is time-consuming and laborious. Whether your project requires 40 or 400 vendors, the traditional procurement process is inefficient and ineffective for sourcing and evaluating vendors.
Many teams try to save time by defaulting to the vendors they’ve worked with before despite an average or even below-average experience because the alternative is a tedious and time-consuming RFP and bidding process that can take up to weeks to complete.
Sourcing a new vendor involves:
- Creating an RFP
- Addressing scope gaps
- Collecting and entering data from bids
- Manually matching budget lines to level bids within a real estate vendor excel spreadsheet
After this highly manual process, it can still feel like a gamble when selecting the right vendor. How would you know if a vendor were to quote you low just to supplement their price with hundreds of change orders?
Here are three key steps that enable real estate developers to make faster and more data-informed decisions when selecting their vendors.
Base Your Decisions On Historical Data
Keep data from past projects easily accessible in a dashboard to quickly reference things like the variance between your original quoted price and the final amount you paid out before agreeing to re-sign with a vendor.
By keeping track of information like your initial budget vs. contingency spent and every change order from a specific vendor in a dashboard, you can get an immediate idea of how much you over or underpaid a particular vendor. This empowers your team to make a quick decision about whether you want to work with them again or try your luck in the marketplace.
Create a Bid Template
If you decide you don’t want to continue doing business with a vendor, there are ways to make the RFP andbid leveling process less painful and more effective.
Skip the data entry of matching budget lines in a spreadsheet to compare vendors. By using and distributing your own bid template, instead of accepting dozens of miscellaneously formatted bids, you’ll be able to compare each bid instantly, line by line, and make sure any potential scope gaps are addressed.
Once a bid is submitted, savvy teams can also have each bid auto-populate into a cloud-based management platform. This way, all the data you need is in one place and it’s easy to make informed decisions and accurately level all bids.
Find Vendors in a Marketplace
Commercial real estate is a very hand-shake-centered industry and vendor relationships are no different. Vendors are primarily sourced through referrals since finding one online without any reviews or thorough vetting can be very risky.
The future of vendor procurement is finding vendors the same way you can find a good restaurant for dinner- a vetted network of reliable vendors recommended by leading developers in the industry.
By utilizing a marketplace of vendors, sourcing new people will become a far more viable option for project teams that have historically felt pressure to settle for mediocre vendors that they’ve worked with before.
Modern technology can streamline the vendor procurement processes for both vendors and developers by creating a single source of truth for cost tracking and development automation throughout the project’s entire lifecycle.
By utilizing these tracking tools even after pre-development, developers can get a complete view of each vendor’s performance and easily sort which vendors they want to build a relationship with and which vendors they don't.
For a developer, having a trustworthy set of vendors can make the difference between a project finishing on time and one that’s over budget and delayed. And by implementing these best practices, sourcing them can be easy.
Tag(s):
Real Estate Development