Construction project owners typically have a large number of proposals to choose from, so it’s crucial that when submitting your own, you are detailed, professional, and comprehensive. A key part of the construction bidding process, this article will break down the critical components of a bid proposal and provide a convenient construction bid checklist to ensure you are covering all your bases.
1. Construction bid proposal checklist
Have you received and reviewed the following documents?
- RFP document
- Plans and specifications
- Standard form contract
- Building rules and regulations
- Insurance requirements
- List of approved subcontractors
- Photos and scope narrative
Is the most recent addenda attached?
Has the client provided a bid sheet template?
- If yes, have you reviewed the directions?
- Is the template missing any key sections, provisions, or clauses?
If no template is provided and you are creating your own, ensure the following is accounted for:
Have you included recipient information?
- Phone number
- Job title
Have you included project information?
- Project name
- Project location
Have you created a detailed scope of work?
- Have you detailed the services you wish to provide?
- Does it address the requirements and specifications of the project?
- Have you included a breakdown of materials and labor?
- Have you provided sufficient supporting evidence for each cost and project phase?
Ensure the scope of work includes the following:
- Project overview
- Technical details
- Timelines and milestones
- Management and admin specifics
- Attachments and visuals
Have you included a base bid price?
- Have you provided a breakdown of all costs (labor, materials, equipment, & subcontractor fees)
- Have you provided information on allowances?
Have you created a payment schedule?
- Does your payment schedule account for all major milestones and project phases?
- Are payment details clear and easy to understand?
Have you provided a work schedule?
Are all sections easy to read?
- Are there unnecessary words, sections, or paragraphs?
Are there any unique inclusions?
- Are unit prices needed?
- Alternative prices?
Double check you have provided all information requested
- Are bid docs signed off as requested?
- Have you addressed all policies, specifications, and requirements?
Double-check the deadline to submit to ensure you deliver the proposal on time
If you are providing warranty information, have you provided the necessary details on what you will and will not perform after the project?
Have you reviewed project documents with your team and given them time to answer questions?
Do you have a process in place for following up?
2. Key components of a bid proposal
Bid proposals will vary depending on the current state of the construction industry (labor and material costs, etc.), as well as project details and specific contractor needs. However, the core elements to include in every construction bid form are the following:
- Client and project details
- Scope of work
- Existing conditions
- Cost estimate
- Payment schedule
- Work schedule
- Warranty information
We’ll go into each of these sections in greater detail below. But first, it’s important to note that nailing each section is the difference between good construction bids and great construction bids. Winning bids are usually the most professional bids. Demonstrating to a potential customer (and the project owner) that you take bidding seriously can give you a leg up on competitors that mail it in.
2.1 Client and project details
Start the document with a heading that clearly states what the document is, so recipients know what they are looking at and reviewing. Following the header, list basic information about the recipient, such as name, address, and job title. Include project details as well, including the project’s name and location. In addition, you may need to list federal ID numbers and names of any salespeople involved if applicable. Finally, include your company name, address, contact information, and license information. All contact info should be easy to read and find on the document.
2.2 Scope of work
The scope of work is arguably the most critical part of the construction proposal template and is where contractors must pay close attention. The scope of work should be as detailed as possible, providing all services you intend to perform, all steps of the project, materials to be used, model and spec numbers, and additional design or construction process details. Again, detail is everything here. Don’t cut corners on the project scope. Expand on the grade of the work, proposed schedules, quality of materials, and any features or aspects of the job that you feel need to be mentioned. You should also consider adding a statement like “only the labor, materials, and services explicitly stated are bound under terms of this contract.”
Aside from project specifics, take the opportunity to provide a brief section on your rationale and understanding of the entire project itself. Describe what you believe the project to be, your role in completing it, and your expectations. Next, list out any exclusions and inclusions. Inclusions will describe all actions, items, and tasks included in the scope of work, while exclusions will describe all actions and items that will not be included.
Finally, mention any details not already stated in bid document, such as additional crew needs and responsibilities for actions such as trash removal, safety protocols, and worksite conditions. Again, spare no effort in providing detail. For example, if there is no clear plan for how change orders should be handled, take the time to articulate the process, responsibilities, and steps for which both sides will be responsible.
2.3 Existing conditions
It’s advised to have a preliminary site visit as part of your bid process. This preliminary site assessment will allow you to document the existing site conditions and plan for any actions that need to be taken to account for poor or challenging site conditions. Include what steps need to be taken and who will be responsible. If site conditions impact the scope of work or cost, include those details in this section.
2.4 Cost estimate
This section will see a breakdown of all project costs. Cost estimates should be detailed, with a breakdown of labor, materials, equipment, and any additional costs that may be incurred. This section can also include information on allowances or dollar amounts reserved for work that must be subcontracted.
2.5 Payment schedule
In this section, you will list pricing information like the total cost for the job, and provide a breakdown of all payments. This section is crucial for managing your company’s cash flow. Additionally, in this section, you should arrive at a dollar amount you intend to receive as compensation for your portion of the construction project. From there, detail the payment terms and manner in which you expect to be paid. This will include milestones or percentage of completion information.
Details will vary depending on the method used; however, ensure your payment schedule includes the following:
- Name of contractor/vendor
- Summary of work performed
- Amount due
- Due date
- Amount paid
- Payment method
Looking at a simplified example, let’s look at a $40,000 kitchen remodel. A payment schedule for this project may look like the following:
- $10,000 deposit upon execution of the agreement
- $3,000 upon completion of the demo
- $6,000 upon completion of rough-in framing and plumbing
- $2,000 upon completion of finishing walls
- $3,000 upon completion of new cabinet installation
- $3,000 upon completion of new appliances
- $3,000 upon completion of new flooring
2.6 Work schedule
The work schedule will detail when the project will begin and when it is slated to end. However, it should go further by providing other significant dates, such as when you, as the contractor, will be approved to begin work and details on delays. More specifically, liability and processes around how delays will be handled due to weather or delayed permits.
2.7 Warranty information
The warranty section will include all work you are liable to fix after the project concludes. Warranties are typically express (written in the contract) or implied (state/federal laws). Contractors should always include an express warranty that specifies responsibilities after the project. Express warranties should include the following:
- The exact issues that are covered in the warranty.
- Details on how problems will be handled.
- The length of time that the warranty is valid.
Implied warranties fall under federal/state law and automatically provide a base level of protection. For this reason, project managers and contractors should be well-versed in implied state laws to make construction projects meet any legal responsibilities post-project completion.
Finally, provide a section to serve as a formal intent to provide services with lines for signatures from all parties involved.
Bid proposals will need to adapt to fit the needs of the contractor and project at hand. If provided a bid proposal template, ensure you run through it with a fine-toothed comb. Ask questions, seek clarification, and don’t leave any details up for interpretation. Regardless of if you are filling out a full bid template or creating your own, always have a lawyer read through it to confirm that you comply with laws and regulations.
Pay close attention when developing your scope of work; it’s the skeleton upon which all other elements are built. Make sure it’s comprehensive. Support your scope of work with a sensible payment plan that is easy to understand. Stay methodical, meticulous, and diligent, and your project bid and proposals will stand out from the rest.
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