Contractors have placed $20 billion of project volume out to bid on BuildPoint.com since it launched less than a year ago.

Peter Daley, founder and executive vice-president of BuildPoint Corp., Redwood City, Calif., said the site has more than 20,000 users, 2,000 of which are electrical contractors.

"We have more than 15,000 member companies that have chosen BuildPoint as their e-commerce solution in the areas of project bidding and materials procurement," Daley said.

Joe Barbato, project manager for Design Electric Corp. Pleasanton, Calif., said BuildPoint selected his company for beta testing six months ago, and they opted to continue with the bidding and procurement system.

"We're doing some purchasing and getting requests for bidding from different general contractors," Barbato said. "So far, I'm very happy with the system."

BuildPoint.com, whose services are free to subcontractors, offers a Project, Product and Financial Marketplace to its members.

"The initial application we released was Project Marketplace, the online bid management and solicitation tool used by general contractors and subcontractors," Daley said. "We've always been focused on the e-commerce part of the construction supply chain, where building materials and services are purchased and sold. But in order to be successful in this area we needed to have a large number of buyers and sellers on the site."

PROJECT MARKETPLACE BuildPoint views the bid solicitation and the invitation to bid in the Project Marketplace as a two-sided opportunity.

"First of all, it's a very painful process for the general contractors to manage sending out bid packages to sometimes hundreds or thousands of subcontractors for each job," Daley said. "Subcontractors also often have difficulty getting the most up-to-date information from the general contractors in order to win business. That was a huge pain point for the industry that we wanted to solve."

BuildPoint's electronic bidding process cuts down on the paper trail for electrical contractors, Design Electric's Barbato said.

"It avoids all the paper that I dislike tremendously," Barbato said. "We used to have to wait for faxes or have something FedExed to us. We now get information any time there's a change, bid date change or an addendum electronically."

Subcontractors can not only receive bid packages electronically from general contractors, but they can also post their company contact information on the public exchange to drum up more business.

"The public directory is where a contractor can state what types of projects they are most interested in," Daley said. "The general contractor can also put out the bid package on the public exchange. This opens it up to anyone in the BuildPoint community to come in and collect the bid documents so that they can bid on the job."

The subcontractors can then notify the general contractors on whether or not they will bid on the job, and the contractor can run a report to determine where they have sufficient and insufficient bid coverage.

"A big issue for the general contractor is making sure they have at least a few contractors in each trade bidding on the job," Daley said.

The automated bidding process can be especially helpful with fast-track projects, Daley said.

"In managing the bidding process, it should ease a lot of the administrative burden and a lot of the guesswork that goes on in rapidly changing construction projects," Daley said.

PRODUCT MARKETPLACE BuildPoint not only facilitates communication between general contractors and subcontractors, but also between subcontractors and distributors. Barbato said he uses BuildPoint to price and purchase materials as well as manage documents.

"As far as the purchasing goes, this is a much better way of tracking purchase orders, deliveries and materials," Barbato said.

Design Electric still works with a traditional distributor, but uses BuildPoint for purchasing and pricing.

"BuildPoint is working with the distributors that we prefer to work with," Barbato said. "We have set it up so we can write purchase orders and get quotations online."

Electrical contractors deal with very complex and large bills of materials, Daley said.

"They're not just buying a certain number of square feet of drywall," he said. "They're buying thousands of individual different pieces of electrical components that go into the building."

For that reason, pricing out a specific and accurate bill of materials can be a daunting challenge for electrical contractors. Daley said BuildPoint fosters collaborative negotiation between the distributor and the subcontractor.

"It's not like an Amazon.com Web site where they go in and click, click, click and buy," Daley said. "The distributor and the contractor can go back and forth until they get a correct bill of materials. In a competitive environment, the more specific you can get regarding the pricing of the materials, the more likely it is that you'll win the project."

FINANCIAL MARKETPLACE BuildPoint.com's Project and Product Marketplace can help contractors increase their top line and operate their companies more efficiently. The Web site also features a Financial Marketplace, in which general contractors can get price quotes and purchase builder's risk insurance policies. Daley said the process saves contractors time.

"General contractors had to spend three or four hours to fill out the forms and then the broker had to enter all the data into the computer," Daley said. "Now you can fill the RFQ in four to five minutes. It's a very fast turnaround."

BuildPoint Corp. recently partnered with Gallagher Construction Services to offer builder's risk insurance to general contractors. Once contractors become members of BuildPoint.com, they can submit their project information electronically to Gallagher, who will forward their information to six A-rated insurance companies. The broker will then relay the lowest price to the contractor.

BuildPoint.com will also archive the contractors' insurance policies free of charge after they have purchased the policy online.

"General contractors bid on a lot of different projects," Daley said. "It helps them to better manage insurance policies and keep track of all the insurance quotes."

BuildPoint plans to offer insurance policies to subcontractors in the future. The company is also developing ways to help contractors better coordinate project delivery. Contractors working on job sites with limited storage space often need materials delivered at different times and dates, Daley said.

"Electrical contractors' procurement needs are very intense," Daley said.

So far, BuildPoint has gotten a strong response from electrical contractors, Daley said.

"The electrical side of the market is the earliest adopter among the construction trades," he said.

Barbato, who has both e-mail and access to the Web, said it's critical for electrical contractors to learn more about the Internet and e-commerce.

"You have to do it to keep up these days," he said. "The Internet is the wave of the future."