How to Write a Bid When Working in Construction
In the construction industry, a contract for a particular project is typically awarded to the contractor who provides the lowest price for a given scope of work. The price, which is submitted to the developer or project owner for review, is known in the industry as a bid. While bids may seem fairly simple to produce, there are several important factors to consider when pricing a job. It's critical that the bid is properly prepared, includes all relevant information and conditions, and is created to match the bid requirements set for the project.
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Things You'll Need
- Project drawings Specifications Bid documents/instructions (If applicable)
Instructions
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1
Prepare your estimate. This is the total amount it will cost your firm to complete your portion of the project. It includes material and labor costs, as well as equipment rentals and any miscellaneous expenses that can be attributed to the project.
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2
Determine how much you will markup your estimated price. The number you determined in Step 1 is merely your cost to do the job. Now you must decide what your profit margin should be on this job to make the project worthwhile to your company. The markup is dependent upon company goals, economic conditions, and how competitive the project bid is expected to be. For instance, if many firms that are similar to you are bidding on the job, you will have to go with a low markup to increase your chances of winning the job.
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3
Read the project's bidding requirements. Most construction documents or specifications for commercial projects will include directions for how the bid should be structured. It may even include bid forms that should be filled out and submitted along with your price. Check to see that you follow the instructions exactly, because failure to do so will often disqualify you from the job.
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4
Fill out the bid form or prepare a bid using your company letterhead. Clearly state your price, including markup. Indicate whether you have included sales tax, if applicable to your state. Add clarifications for any items you have included or excluded from your price that may not be clearly stated on the plans. For instance, if you are preparing a bid for the door hardware, indicate whether you have also included hardware for cabinets or for aluminum storefronts.
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5
Submit the bid on time and in the format required by the project owner. Some bids may be faxed, while others are required to be submitted as a hard copy. Follow the bid submission instructions carefully, as they are often very specific, especially on state or federal projects.
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Resources
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