By Jim Lamelza
Special to Ontario Construction News
Whether you’re new or you’re having a difficult time winning construction bids, we can help. In this guide, you will learn how to create a construction bid that will land you the job in no time at all.
When writing a construction bid, remember you’re competing against several other bidders. The process can be long and tedious, but it requires that you do it to precision.
The construction industry will always be in demand for contractors. New projects keep coming up and old ones need renovations. DataBid has entered over 20,000 new projects this year alone
Many construction firms compete for these opportunities. Getting the job depends on how well you design your construction bid. Increase your chances of being awarded the contract by doing the following:
Understand the project overview
Far too many contractors rush through the project overview. It’s common to think that because you have worked on many projects, the details are closely the same. This is one big mistake that could make the project owner overlook your experience.
Always strive to understand the details of the project. It will help you in estimating costs so that you don’t quote too high or too low. If you understand the project, you can explain the scope of work you intend to cover.
Owners and developers will find it easier to compare your bid with others if you include the scope of work. You will also come across as professional and organized. Break down your costs for easier analysis. If anything is unclear, ask for clarification from the project owner.
Drafting your bid
If the project owner sent you a bid form, bid sheet or bid template, use it to fill out your proposal. If not, you’re free to draft your bid on a blank template. Ensure you capture essential details such as identity information.
The words “Bid Proposal” should appear first at the top of the page in bold letters. Other details should include:
- The name of your company
- The name of the person you’re submitting the proposal to
- Their company name and address
- The date of making the bid and the time it expires
These are details that make your bid look professional and well thought out.
Put in details of the services you will be providing as earlier mentioned. You’ll spend much of your time in this section because it sets you apart from the competition. Avoid writing vague explanations of the work you will be doing. For example, if the project is building a deck, avoid saying “build a composite type-decking.” Instead, “2-inch Trex composite deck with round edge” sounds much clearer.
Things to capture in your bid:
Knowing what it will cost you to complete the project is one of the crucial factors that will help you with pricing. Some of the other factors will include the supplies, the cost of equipment and labor costs.
For a better bid proposal, ensure you list any specific request or items you will need. To be more specific, you can investigate the job site to avoid surprises after winning the contract.
You might find the place is different from what the owner described it to be. Visiting the site is worth your time because you will be able to detect problems early.
The other factor that is necessary while calculating costs is the subcontractors’ fee. It’s likely you will need to engage the services of subcontractors. You can ask them to bid or use the standard rates.
If the job is unusual or more complicated than usual, it’s best to ask for bids.
Get a quote for the materials needed. The materials should act as your checklist to help you remain on top of the order.
If you’re new to the industry, use your best judgment for pricing. Alternatively, talk to someone with more industry experience.
You would hate to be hired for the job but not get paid, right? This is why you shouldn’t forget to list how payments should reach you. Depending on how big the project is, include a progressive payment schedule. Each payment is referred to as a draw and should be tied to a milestone. For example, if you complete a phase of the project like building the foundation, that’s a milestone. For smaller projects, you may request payment upon completion of the last step.
3. Work schedule
State when you intend to start the project and include an estimate of how long it will take. Remember to state that the schedule depends on other factors like changes approved by the owner. Extreme conditions like adverse weather may also affect the timing.
4. A clause on change orders
Changes may occur in the scope of the project with the owner asking for extra provisions. You don’t want to bear the additional costs. Include a statement that captures how changes will affect the initial project budget and timing.
Often confusion arises about who should carry liability and cater for insurance. Include a section for this. For example, write “owner will be responsible for project insurances. The contractor will handle worker’s compensation insurance and general liability insurance.”
6. Space for signature
The bid is different from a construction contract. However, should the owner accept your proposal, they need to append their signature for “acceptance of the proposal.”
7. Supporting documents
If you will be hiring subcontractors, you can attach a copy of your agreement. If it’s not ready yet, include a standard agreement copy. Copies of liability insurance are essential. Owners will want to be sure that you’re insured as you claim.
Increase your odds
If your bidding as a sub and you only submit your bid to the GC that told you about the job your only chance of winning is if that GC actually wins. What if another GC wins? By using a service like DataBid to identify ALL the Bidders you can simply send your numbers to the complete list. This way when one of them wins the job you have just bid to the Low Bidder and dramatically increased your odds of winning. By tracking the Project in the DataBid Saved Project Alert system you’ll even be notified who the Awarded Contractor is so you can reach back out. DataBid even shows you who your competition is on a project and how they typically bid giving you a competitive advantage.
Construction bid – take away
When creating a construction bid, think of how you can make it the lowest bid tender.
However, don’t quote so low that you make no profit or even lose money. Don’t attempt to use shortcuts when putting together your bid.
It’s critically essential you first understand what the project owner wants before you start writing your bid. If the owner detects that you don’t know what the project is about, you will lose out.
An accurate bid requires you to pinpoint the direct and indirect costs as you do the pricing. Your estimates should be as precise as possible. Ask for material quotes if at all possible so that you will not quote too high or too low.
You will only be consistent if your bid is accurate. This means you need to seek clarifications to provide owners with a proposal that you can implement.
Sound decisions are key to any successful bid. Contact us today to learn how Databid can help with that.
Jim Lamelza is DataBid’s founder and chief executive officer. DataBid provides public and private construction leads, complete bidders lists, bid results and company tracking in Ontario. You can the service for free at this link.
Great article! Writing a professional and well constructed construction bid will surely get you more projects. Make sure to always go into detail and be specific about the scope of work when crafting your construction bid. You could also follow this template from this site to get things started. They also have another list of helpful tips for writing an appealing bid proposal included.