Winning four of nine, and learning what a win costs

Context

I joined Larsen & Toubro in Chennai in 2011, on tendering and commercial work. Across that period we pursued nine major bid-build projects and won four.

Then the UAE, and the other side of the same work: planning engineer and estimator on the Sheikh Khalifa Interchange, then construction manager on the Mafraq–Al Ghweifat Highway and Abu Dhabi International Airport — including a ten-mile section delivered on schedule with four foremen and their crews.

Selling the work first and building it afterwards is an unusual order, and it is the reason this story is about what a win actually costs.

The mandate I gave myself

There is a standard way to win construction work, and everyone in the industry knows it: bid low, take the job, and recover the margin through change orders once you are the only party who can finish it.

It works. It is also a decision to spend the next two years in conflict with your client, and it produces exactly the projects that end up in dispute.

I wanted to win on a different basis: value engineering, done before the bid rather than after it.

The decisions

Doing the homework the price alone does not require

Winning on value engineering means learning more about the project than the tender documents strictly require. Going through the design looking for places where the same result can be reached a different way — a different sequence, a different method, a different technical approach — at lower cost.

The critical constraint is that this is not a quality compromise. It is not cheaper materials or thinner sections. It is arriving at the same outcome by a better route, and then being able to show the client the engineering that gets you there.

Putting the saving in the bid, not in the negotiation afterwards

The saving went into the bid itself, communicated as part of the proposal. That is what makes it a different strategy rather than the same one with better manners: the client sees the value at the point of decision, not after they are committed.

It also means you are competing on something other than being the cheapest number in the room — which matters, because the cheapest number in the room is usually the one that has planned to be wrong.

Sourcing as a commercial position, not a procurement task

Alongside the pursuits, I built the supply chain strategy for over 200 critical line items and negotiated blanket purchase agreements that delivered $1.5M in direct savings. Cost position is not something you discover at tender. It is something you assemble beforehand.

Why we lost the other five

Almost always for the same reason: we were not the lowest bidder.

Most clients want the project delivered at the lowest cost, and most clients do not understand the trap in that. The low bid is frequently a position, not a price — and the difference gets recovered later, through the change channel, at a moment when the client has no leverage left.

What I noticed is which clients this happened to. It was not the sophisticated ones. It was the clients with no team of their own reviewing the bids, nobody asking hard questions before award, and no control systems in place once the work started. Those are the projects that see scope creep and cost overrun — not because the contractor was dishonest, but because nobody on the owner’s side was equipped to see it coming.

Losing those bids taught me more about owner-side controls than winning them would have. It is the reason I spent the following decade on the other side of the table.

What I carry forward

The incentive structure in this industry rewards winning the tender, and it rewards it immediately. A signed contract is a visible, celebrated event. Delivering it is a slow, largely invisible two years.

So there is a version of this job where someone wins the work, banks the credit, and moves on — while the team on site knew from the first week that the schedule and the budget did not reconcile. The project gets labelled a failure. The team wears it. The person who committed to it does not.

What I took from that is a duty rather than an observation: only accept a project you can actually deliver as promised. If you take on work you know cannot be delivered on the terms you agreed, the failure is not the market’s, or the client’s, or the team’s. It is yours, and you are responsible for the ship you are standing on.

That is also, in the end, the same discipline as everything else I do. A bid is a forecast. It should be honest for exactly the same reasons a forecast should be.