How to Bid Construction Jobs

Learning how to bid on construction jobs is one business acumen that could quite easily turn your small business into a multi-million-dollar company.

However, a construction bid can be a little baffling if you do not understand the process of tendering or how to bid construction jobs.

Here is a step-by-step guideline to help you bid on construction jobs with ease, whether as a contractor or a subcontractor.

How does one bid on a construction job?

Following are the ten major steps in the process of bidding for construction jobs:

1. Client contact and project site tour

Get started with your process of bidding by contacting your potential client.

Establish a proper channel for communication to understand their vision and details of the project. This should be followed by a project site tour wherein you thoroughly analyze both the site and project plans.

This will lead to a thorough comprehension of the client’s vision and the requirements of the project, which will set a proper base for a knowledgeable bid proposal.

2. Procurement of Materials

Prepare a materials list for a job taken from a set of plans or actual field measurements, and call various suppliers to obtain material prices and verify availability.

Calculate the overall cost of material, including transportation.

Allow for any potential damage or loss that could occur during the construction process for correct budgeting and general preparation in the case of the bid process.

3. Labor cost estimate

When estimating labor costs, factor in wages, workers’ compensation, and benefits.

Add a markup to contribute to your overall gross profit for the project, ensuring that the final figure remains competitive in the bidding process.

4. Subcontracting

Open any work that must be subcontracted to bid. Add a small markup to your subcontract labor item costs to cover your administrative overhead.

Have subcontractors carry sufficient insurance to protect your business from financial repercussions in the event of an accident and have adequate operating capital for financial stability and to reduce project liabilities.

5. Schedule the project

Develop a schedule of the project, scheduling work in concert with material and labor availability including subcontract labor.

Allow for bad weather conditions, possible backorders, delays on the customer’s part, or last-minute subcontractor scheduling problems.

6. Proper bid preparation

As you prepare your bid, give heed to minute details to let your prospective client know where their money is going.

RELATED: 9 Top Bid Sites for Construction Projects

Type and bind your proposal professionally, and outline it so it reads well and looks impressive.

7. Bid submission

Always include a referral list and quality images of your previous work when presenting the quote to the client.

Demonstrate that your business is on safe financial ground. Always ensure you include proof of adequate insurance coverage for you and your workers or employees.

8. Project terms and conditions

Give the client an estimated completion time. Provide the patron with a policy description of how to handle any add-ons or changes to the original proposal ‘scope of work’.

State that change orders will be in writing, providing costs with customer approval before beginning.

9. Discussion with client

Ask a prospective customer when it would be convenient to review a job with them. If they would like to have someone other than themselves do the work, you might ask if you could review the bids with them.

10. Cost-effective choices

Offer to work on costs in case the budget of the customer is an issue.

You may offer them alternatives in building materials or design features that help reduce building costs without compromising on quality.

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