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Construction Bidding Guide
How to create professional construction bids that win more projects.
What Should a Construction Bid Include?
A professional construction bid includes 8 essential sections that protect both the contractor and the client.
- Scope of work: Detailed description of what's included (and excluded)
- Itemized cost breakdown: Materials, labor, equipment, subcontractors, overhead, profit
- Project timeline: Start date, milestones, estimated completion
- Payment schedule: Deposit, progress payments, final payment terms
- Allowances: Budget placeholders for selections (fixtures, finishes)
- Exclusions: What's NOT included (permits, engineering, landscaping restoration)
- Validity period: How long the bid price is good for (typically 30 days)
- Terms & conditions: Change order process, warranty, dispute resolution
Key Takeaways
- 8 essential sections for a complete bid
- Exclusions are as important as inclusions
- Typical bid validity: 30 days
How to Calculate Bid Pricing
Use the formula: (Materials + Labor + Subs + Equipment) × (1 + Overhead%) × (1 + Profit%) to build accurate bids.
- Materials: Supplier quotes + 5–10% waste factor
- Labor: Estimated hours × burdened rate ($35–$85/hr including taxes, insurance, benefits)
- Overhead: Typically 10–20% (office, trucks, insurance, admin)
- Profit margin: 10–20% for commercial, 20–40% for residential remodeling
Burdened labor rate includes FICA (7.65%), workers comp (5–25%), unemployment tax, and benefits on top of the hourly wage.
Key Takeaways
- Burdened labor rate: wage + 25–40% for taxes/insurance
- Overhead typically 10–20% of direct costs
- Residential remodel profit: 20–40% margin
Bid Win Rates & Best Practices
The average contractor wins 25–35% of bids submitted. Increasing win rate to 40%+ requires targeted bidding and better presentations.
- Respond within 48 hours — speed signals professionalism
- Include photos of similar completed projects
- Provide 3 options (good/better/best) to anchor pricing
- Follow up within 5 days if no response
- Track bid-to-win ratio by job type to identify sweet spots
Key Takeaways
- Average bid win rate: 25–35%
- Respond within 48 hours to increase wins
- Offer 3 pricing tiers (good/better/best)
How to Use This Calculator
Enter Company Info
Fill in your company name, address, phone, email, and license number to brand the bid with your business details.
Add Line Items
Add each item of work with a description, quantity, unit of measure, and unit price. The template auto-calculates totals.
Set Terms and Conditions
Choose payment terms, bid validity period, estimated start date, duration, and add any notes or exclusions.
Download Your Bid
Preview the formatted bid document and use the Print button to save as PDF or print a hard copy to send to your client.
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Frequently Asked Questions
What should a construction bid include?
A complete construction bid should include your company information, project scope, itemized line items with costs, payment terms, project timeline, exclusions, and space for signatures. The more detail you provide, the more professional and trustworthy your bid appears.
How do I price a construction bid?
Start with your actual costs for materials + labor + overhead, then add a markup of 10-20% for profit. Factor in project complexity, local market rates, and your experience level. Always account for contingency costs (5-10%) to cover unexpected expenses.
What's the difference between a bid and an estimate?
A bid is a formal offer to complete work at a stated price — it is a binding commitment if accepted. An estimate is an approximation of what the work may cost and is subject to change. Bids are typically used in competitive bidding; estimates are used earlier in the sales process.
How long should a construction bid be valid?
Most construction bids are valid for 30-60 days. Material prices fluctuate, so shorter validity periods protect you against cost increases. For large projects or volatile markets, 30 days is safer. Always clearly state the expiration date on your bid.
Can I use this bid template for subcontractor work?
Yes, this template works for general contractors, subcontractors, and specialty trades. Whether you are bidding directly to a homeowner or submitting a sub-bid to a GC, the format covers all the essential elements of a professional bid proposal.
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