10 Tips: How to Save Money When Submitting a Bid to a Steel Fabricator

Posted by Brooke Barone on Jun 19, 2014 12:25:00 PM

Every structural steel fabricator is different when it comes down to pricing substation and transmission steel structures. But, there are some commonalities that could help save you money when submitting a Request for Quote (RFQ). How do you do that you might ask?

Well, generally, there’s a rule of thumb to consider: the more information you give the Estimating Department, the better price you’ll receive. If very little information is given, it’s harder for the estimating department/engineers to easily go through and pick out requirements, design the structure and then send the RFQ back in adequate time. And sometimes the price might reflect the assumptions that had to be made. 

Different terms used:

  • Request for Quote (RFQ)
  • Request for Proposal (RFP)
  • Purchase Requisition
  • Inquiry
  • Bid Event / BidQuote / Proposal

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So, if you’ve asked yourself, “what can I do to save money when submitting a bid,” here are five good starting points.

1. Well-Defined Scope of Work- this could include everything from what the fabricator’s responsibility is, to needing the structures galvanized or weathering, delivery process, how hardware should be shipped, etc.  

2. Technical Specifications- this tells the fabricator how you want the structures built, like what kind of steel to use, etc.

3. Commercial Terms- this is more on the legal side, meaning what type of payment or who to invoice, insurance requirements, warranties, damages, etc.

4. Structure/Electrical Layout- this gives the overall dimensions of a structure such as height and width or phase spacing.

5. Enough Time to Bid- it’s important to keep in mind that fabricators typically have a quote backlog already scheduled out. 

Often, in order to send a bid to a fabricator, customers require the fabricator to be on an approved vendor list in order to quote the project.  The approval process usually involves quality assurance / quality control (QA/QC) audit, industry experience, project references, customer references, commercial term agreement, credit approvals, etc. 

Facts That Could Affect Pricing:

6. Weathering steel generally costs less because unlike galvanized steel, it doesn’t get the galvanized coating. (Typically see weathering steel more with transmission structures.)

7. Usually, the more steel ordered at one time could help give you a better price. In this instance, if you had different structures for one substation, instead of ordering separately, try to coordinate to order all the structures together, which could save money on freight and other expenses.

8. Loads with over-length and over-width sections could get costly because you have to get freight permitting depending on the states along the delivery route. Typically, the price for wider structures is greater than longer structures.

9. Expedited lead times can increase price. Since a production backlog is already in place, fabricators would need to expedite engineering, detailing, rearrange product schedule or may have to include some overtime.

10. Special weld inspection requirements and tests that are beyond typical industry standards could raise the price. If the fabricator needs to pull in a third party to inspect, send material off for testing or bring in an expert, it could increase the price.

These are just a few suggestions, and are not meant to be taken as the rule in every situation when dealing with every fabricator. But it is good to know how your project was priced and what affected it so that there are no hidden surprises or confusion.   

So remember: supply ample information, receive accurate price. 

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Tags: transmission structures, substation structures, structural steel fabricators, structural steel price, rfq request for quote, engineering estimating software, structural steel

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