How to Bid on Snow Removal Contracts

Bidding on snow removal

Bidding on snow removal contracts is similar to bidding for any other type of contract. You are attempting to be the lowest cost bidder to provide a service for a set period of time or set number of events. Bidding on snow removal is sometimes tricky because it depends on how often it will snow in your area during a given year. You must be aware of previous snowfall amounts. Know the normal snowfall average for the area.

Difficulty:

Moderate

Instructions

1. Decide if you are looking for residential contracts or commercial contracts. These are not bid in the same manner. Residential contracts are mostly verbal agreements or simple short contracts stating when you will remove snow and how much you will charge. Commercial contracts are longer written contracts; they state the above and liabilities--including insurance, damage, specified time of completion and other specified items as required by the business owner.

2. Look at the property that would be served by the contract. Estimate the amount of time it would take you to plow and remove the snow from the areas needed. Look at any possible problems such as obstructions, vehicles to be moved, the shape of the area to be plowed and where the snow is to be placed. This is the time to roughly think of how you would plow the area.

3. Calculate the amount of gas used, the labor cost, the insurance cost and the amount of work needed. Harder jobs would require a higher estimate because of the difficulty. Also, consider the hourly rate you would need to turn a profit. This will depend on how many jobs you can get done within one day. Another consideration is the amount of snow expected for your area during the season.

4. Know the capacity of your equipment before you place a bid. Do not try to bid on contracts for large areas while using a pick-up truck. You would also not try to bid on driveways using a large dump plow. You also need to understand the amount of snow your plow is able to move. Know your equipment specifications, as well as your crew, if you have one.

5. Bid using a base number, then add a percentage that you are comfortable with for the profit margin. An example would be having a base of $1,000 plus 20 percent--making the total bid $1,200. If you find yourself negotiating, you have that profit percentage to use as a tool. Do not go below 5 percent profit so you ensure room for both current profit and increased costs when you renegotiate the contract the following year.

References

• Vermont School Board Insurance Trust: A Contract Guide for Snow Plowing and Sanding

Resources

• Read this Article in Spanish