How to Write a Construction Bid

Video Transcript

"Hey, my name is Gavin McKenzie with BuildMcKenzie.com in Miami Beach, Florida. Let's talk a little bit about how to write a construction bid. First of all, what is a construction bid? A construction bid is a document that you're going to present to an owner, usually you're competing with a couple other contractors and it's a bid to secure the work. So what's involved in a bid, first we're going to have a line item sheet. Basically, that shows analysis and a breakdown of the all the costs associated with the job, for instance, we'll have a plumbing line item, we'll have an electrical line item, we'll have a structural line item, so on and so forth. With those line items, we're going to come to a total. Typically general contractors charge a fee ranging from ten to twenty to twenty five percent. Your fee will be inserted at the bottom of all those line items. Obviously, the bigger the job, the more the general contractor is going to make on that job. When presenting a bid spreadsheet to an owner, basically, you're going to want to accompany that particular line item sheet with a scope of work document. Within that scope of work document, typically it's a Word document, PDF, etc., we will outline each and every line item and then get specific with what the breakdown of the application is. For instance, we have a plumbing line item in a line item sheet. When we move to our scope of work document, we're going to say exactly what we're doing in the plumbing. How many drains we're going to install, how big the piping is, what type of material we're using, how many bathrooms we're plumbing for, etc. So with those two documents combined, we have a bid proposal. Along with the bid proposal, we like to obviously give a construction contract, sometimes that can make or break the deal. If you have a good construction contract for a horrible proposal, there maybe room to work, and vice versa. If you have a great line item sheet but a horrible construction contract, the owner's going to want to negotiate terms, such as payment terms, deposit amounts, things of that nature. So responsibilities tend to lie on the owner or on the builder, and that balances the tricky part of securing work. But once you start to present bids, you become more comfortable with applying these different techniques, and combining these three documents together to form your construction bid."