A Beginner’s Guide to Bidding on Construction Jobs

Mar 1, 2020

A Beginner’s Guide to Bidding on Construction Jobs

When it comes to construction projects, contractors usually eat what they kill. This means that if you get out there and actively bid on projects, you’ll keep your crew busy and your business thriving. Take a conservative approach to the bidding game, however, and your business will likely starve. There simply aren’t many projects that just fall into your lap.

At its core, a construction bid is a proposal. You’re telling a potential client what you can do for them and how much it will ultimately cost. Because your bid will include your expenses and profit, it differs from a simple estimate, which usually just accounts for the costs of the job.

“In some cases, the only thing that matters in the construction bidding process is presenting the lowest price to the owner; in other cases, the contractor’s qualifications are just as important—if not more important—than having the lowest dollar amount,” explains engineering and construction expert Juan Rodriguez. “Knowing how to bid construction jobs can make the difference between success and bankruptcy for a construction contractor. If a contractor does not know how to bid on construction jobs, they will have no chance of turning a profit.”

This bid is where a delicate balance comes into play. Cost matters to all clients, so you’ll want to submit one of the (if not the) lowest bids for any given project. At the same time, you need to protect your interests and ensure you’ll earn a solid profit. Neglect either side of the coin and your business will inevitably suffer.

Here is the typical lifecycle of a construction bid:

  1. Solicitation: A client solicits bids on a project. They supply interested contractors with the relevant plans and specifications.
  2. Due diligence: After reviewing the details of the bid, you’ll want to visit the site to conduct an analysis and make sure you understand the project’s scope.
  3. Submission: Contractors review the project documents, contact subcontractors, and crunch the numbers. Then they submit their bids by the required deadline.
  4. Selection: After receiving all qualified bids, the client chooses the winning contractor. As mentioned earlier, the decision often comes down to cost.
  5. Formation of contract: At this point, the client and contractor collaborate to confirm all details.
  6. Delivery of project: This stage is where the rubber meets the road. The contractor moves in with their crew and equipment to carry out the required work.

About the Author

Grant Olsen

Grant Olsen

Grant Olsen is a writer specializing in small business loans, leadership skills, and growth strategies. He is a contributing writer for KSL 5 TV, where his articles have generated more than 6 million page views, and has been featured on FitSmallBusiness.com and ModernHealthcare.com. Grant is also the author of the book "Rhino Trouble." He has a B.A. in English from Brigham Young University.

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