This week I want to talk about the benefits of “actual data” (defined as the actual costs and labor hours associated with a specific project) and how it compares to the bids (defined as the costs and labor hours were projected for a specific project). We recently upgraded one of PVBid’s features that examines bids to actuals. I have been incredibly excited for this feature, which will bring your solar bidding to the next level. Actual data comes with pitfalls, however. Remember my cost code discussions where I mentioned the US Army Mathematicians original mantra “Garbage in, garbage out”? Well, that concept definitely applies here too.
Now that we know how to put together an effective cost-code list and get the buy-in needed to make it effective, what do we do with that solar bidding information? We make sense of it. From an estimation standpoint, that means predicting costs. It also means understanding success and failure. When I first started estimating, I was terrible at reviewing how I performed and reviewing what happened to a project after I bid it.
I’ve come across a few companies that are really vigilant in this department. One I spoke with reviews every single project they build. This practice helps refine costs. They have a strong understanding of what can go right and what doesn’t. These kinds of insights can go miles towards profitability.
Other companies I’ve met have zero review processes in place. Their estimators have no idea how they perform except for the annual company financial true-up. That was me when I started; I had little visibility on how accurate I was.
Tracking Your Bids
That’s where bids can start to help a bit. If you track your bids, you have visibility on what you thought costs should be. Additionally, you can start to see consistency in yourself. You don’t lose all the time you’ve already spent figuring out how many hours it takes to install ballasted anchors. You can draw on that data later. And if you then look at actual data side-by-side you can begin to see trends. This doesn’t even have to be project-by-project. Comparing the actual data and bid trends allow you to true up the estimates a little, get stronger, and see where volatility occurs. Or, just as importantly, where you seem to be getting it completely right.
Where real accuracy comes into play is when you analyze performance between bids and actuals both individually and across all projects. When looking at it wholistically, trends and nuances start to appear. That’s when what we are doing at PVBid gets unbelievably exciting!