My Year Analyzing Construction Bids: 5 Things I Learned - Part 2
This post continues from Part 1, which explored bid history importance and follow-up strategies. After spending the past year examining construction bids alongside the RhinoDox team and collaborating with clients, the central question guiding this analysis was: what constitutes a strong construction bid?
After consulting estimators, project managers, general contractors, and industry professionals, a clear structure emerged.
What General Contractors Want
General contractors seek the lowest price, but more importantly, they need bids that are "easy to understand and organized" so they can quickly locate information without extensive searching. Clarity about what's included and pricing is essential.
Five Main Bid Sections
1) Price
Position pricing at the top of proposals. This is what readers examine first — burying price at the bottom won't encourage thorough reading of other sections.
2) Scope of Work / Plans and Specs
Once pricing attracts interest, the scope section becomes critical during bid comparisons.
Tip 1: Avoid single lengthy inclusion and exclusion lists. Breaking information by specification section or work type (EIFS, framing, glazing, etc.) improves readability. Include the word "Partial" when not covering entire sections.
Tip 2: List inclusions and exclusions specific to each scope. Payment and performance bonds, for instance, cannot tie to specific scopes — they're project-wide items.
Tip 3: Don't force clients to hunt through long exclusion lists at document's end. "The more important it is, the higher it should go on the proposal."
3) Clarifications and Assumptions
This section informs clients about technical specifications or installation conditions not covered in plans. It demonstrates expertise and addresses potential upstream issues before they become problems downstream. This isn't where to communicate general business practices.
4) Project Specific Qualifications
Labeled "Everything Else," this section covers items affecting base price but unrelated to specific scope items.
Five subcategories:
- Job Site Items and Conditions: dumpsters, temporary enclosures, utilities, cranes
- Job Site Labor: demolition, overtime, cleanup, safety personnel
- Engineering/Plans/Testing: as-built drawings, mockups, BIM modeling, field testing
- Administrative/Miscellaneous: permits, sales tax, hiring requirements
- Insurance: bonds, errors and omissions, OCIP/CCIP
This organization helps estimators compartmentalize work and avoid unintentional omissions.
5) Conditions
These items explain terms of doing business with your company. While primarily enforced through contracts, including them in proposals establishes negotiating foundations.
Example conditions:
- Pricing validity: quotes remain valid for specific periods; formal notice extends holding periods
- Contract requirements: proposals contingent on written agreements with specified terms
- Material price adjustments: changes exceeding certain percentages warrant equitable adjustments
- Site access: proposals assume open floor access for material delivery via boom truck
- Liability limitations: company assumes no responsibility for pre-existing conditions
- Schedule maintenance: subcontractor delays causing overtime constitute change orders
- BIM capabilities: in-house capabilities available for coordination assistance
- Design disclaimers: company isn't a design professional and doesn't warrant plan sufficiency
- Damage exclusions: liquidated and consequential damages excluded
- Indemnification limits: indemnification doesn't apply when indemnitee's negligence contributed
Conclusion
Constructing proposals consistently across all estimators using this framework is essential for bidding success. The next installment explores four decisions necessary for achieving profitable projects.