A large infrastructure contractor kept winning big public tenders — and watching its gross margin shrink anyway. The pricing was done by hand, on last year's numbers. We grounded every bid in what the work actually costs, and put a hard floor under the profit.
Management called us in after a quiet, uncomfortable discovery: the company was winning plenty of large tenders, and its gross profitability was eroding all the same.
The cause was in the pricing room. Bills of quantities — the thousands of priced line items behind every tender — were worked out in hand-built spreadsheets, leaning on cost estimates from past jobs that no longer held. The method couldn't price a real-time jump in raw materials — concrete, steel, asphalt — or the labour shortage biting the Israeli market. So bids went out too low, and some projects were losing money from day one.
It was also slow. A team of engineers and estimators spent two to three weeks reading thousands of pages of technical specs, special conditions and drawings just to price a single tender. And the people pricing the next job at head office had no live link to the real costs of the last one — what a subcontractor or an hour of heavy equipment had actually cost in the field.
Real field costs, current material prices, and a hard line the margin can't cross.
We connected the actual execution and procurement figures from across the company's past projects — alongside current supplier price lists and construction-input indices — into a single, living cost record the pricing team can trust.
A language engine reads and parses the raw tender documents and bill of quantities in seconds, pulling out every priced item and the conditions attached to it — work that used to swallow whole weeks.
The model cross-checks each line item against what that work has really cost the company on site, and produces a data-based estimate — not a guess anchored to a job from three years ago.
We set an iron rule in the system: if a line carries a high risk of overrun, or the pricing drags gross margin below an 8% floor, it halts the submission, flags the item in red, and pushes an alert to the bid manager with a recommended budget buffer.
Live material spikes and labour scarcity feed straight into the estimate, so a jump in the price of steel or asphalt shows up in the bid — before it shows up as a loss in the build.
The engine reads, prices and flags; the estimator reviews and commits. The judgement stays with a person — freed from the keying and cross-checking to do the work that actually moves margin.
The hit rate held. The margin stopped leaking.
Loss-making submissions were eliminated entirely, and grounding every bid in real costs lifted gross margin across the company's winning projects by about 3.5% — straight to the bottom line.
Preparing, analysing and pricing a large infrastructure tender fell from three weeks to about 48 hours — and the estimators it freed moved from keying spreadsheets to hard commercial negotiation with subcontractors and suppliers before each bid closed.
The win came from two disciplines working together: grounding every price in the company's real field costs, and a hard margin floor that refuses to let a loss-making bid out the door. Neither is a demo trick — they're the same guardrail-first thinking behind our retail pricing work, where a hard margin floor blocks any loss-making promotion before it reaches the till. The estimator still signs every bid; the system just makes sure the number is honest.
Reef TRH