- Bidding for a construction job means putting together a proposal so potential clients can decide if they want to hire you
- The bidding process involves meeting with the client, visiting the work site, and calculating the cost of labor and materials
- Search for new projects online, and promote your company so potential clients can find you
Whether you’re starting a contractor business or already have one up and running, knowing how to bid for construction jobs is essential to success. The bidding process is your opportunity to pitch yourself to clients so they choose you over other construction companies.
But a construction bid isn’t something you can put together at the last minute. It requires researching labor costs, materials, and other aspects of the project so you can create a bid proposal that’s both accurate and competitive.
Learn how to bid for construction jobs and how to use online platforms to generate new leads and discover more contract opportunities.
What does it mean to bid for a construction job?
Bidding for a construction job is when a construction business puts together a proposal so a client can decide whether or not to choose them for a project. Although bids are similar to quotes or estimates, they’re usually longer and go into more detail about the cost, timeline, and other aspects of the project.
Since bids require more research than a quote, the construction bidding process has more steps and may involve meeting with the client and visiting the job site.
You’ll also be competing with other contracting companies, so your bid needs to show you’re the right company for the job. Some clients may be looking for the lowest bid, while others might weigh a mix of cost, quality, and experience.
The ratio of jobs bid versus won (known as a bid-hit ratio) is as high as 10:1 in the public sector and averages 5:1 for private jobs, so it’s essential to know how to bid for construction jobs accurately and efficiently to push the ratio in your favor and win more construction contracts.
How to bid a construction job in 5 steps
The construction bidding process can vary depending on the scale of the construction project and how much information the potential client has provided. Some clients will provide a request for proposal, or RFP, detailing their expectations for the project, while others will be more open-ended. Here’s how to bid on construction jobs as a small business in five easy steps.
1. Identify bid opportunities
Start by looking for bid opportunities on construction bidding websites like BidClerk or ConstructConnect. You’ll typically pay a subscription fee to access a database of open bids. Some sites, like BidNet, focus specifically on government contracts while others are primarily for commercial or residential projects.
Yelp tip: If you’re geared toward private contracts that have fewer restrictions than public contracts, increasing your online visibility can be key to being invited to bid. For example, when you add or claim your Yelp Business Page, you make it easier for potential clients to find you. You can also take advantage of the Request a Quote feature, which will prompt potential clients to fill out a questionnaire specific to the construction industry. You can then use their answers to create a bid or follow up for more information.
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2. Meet with the client
Not every bid requires a lengthy meeting, but it’s a good idea to speak with the potential client directly when possible. This could take the form of an in-person meeting, a phone call, or even a video conference. Public entities will often have a pre-bid conference for potential contractors to clarify the content of the RFP and project expectations.
During your discussion, make sure you’re on the same page about the project scope, timeline, budget, and priorities. Ask the project owner about the overall purpose of the project and how it aligns with their business goals. Remember that you aren’t obligated to move beyond this step, so if the client has unrealistic expectations or wants to cut corners, you may decide to pass on the project.
3. Visit the site
If your initial meeting doesn’t take place at the work site, schedule a visit so you can see the location yourself. Consider factors like transportation, staging of crew and materials, weather, and any hazards you might encounter over the course of the project.
If you’re a general contractor, you should have a completed design in hand from a licensed architect before entering the bidding process. This is called design-bid-build (DBB) project delivery. If you’re a design-build (DB) company, however, you’ll be handling both the design process and the construction process, so factor that into the timing of your site visit.
4. Calculate costs
Calculating project costs accurately is key to submitting a winning bid. Use construction estimating software to make an accurate bid that considers market conditions and leaves you with a satisfactory profit margin.
Be sure to consider material costs, procurement costs, subcontractor costs, and any other variables that could result in the new project going over budget. Some bids include a guaranteed maximum price, in which case the client won’t be responsible for any costs beyond that number. Other options include a cost-plus-fee contract, in which the client reimburses you for the actual costs incurred.
5. Submit a proposal
Finally, submit your bid to the potential client, either directly or through the bidding site (the RFP will describe the delivery method). A construction bid is more detailed than a quote or estimate, so it could be several pages long—it should include a detailed breakdown of all of the costs, not just a total price. You should also include a project timeline, including estimated start, completion, and milestone dates.
Use a template with your company’s name and business logo to add a professional touch. Follow up with a meeting or phone call if the client has any questions.
Best practices for bidding on construction jobs
The construction bidding process can vary widely from one project to the next. Bidding for a federal government project will likely require a different level of complexity than bidding on a commercial project for a small business owner. Stay on top of construction industry best practices with the following tips.
Maintain your license
Ensure you have the correct business license for construction contractors in your state. Depending on where you operate, you may need to pay fees, take an exam, or undergo other steps to maintain a license at the state or local level. Getting a license isn’t just a matter of complying with the law; it’s also a way to show potential clients you’re a reputable business entity.
Get bonds and insurance
Potential clients may also ask for a certificate of insurance in case anything goes wrong during the construction process. This should include workers’ compensation insurance as well as builder’s risk insurance against property damage at the job site.
Another important item is a surety bond, which protects the client if you do a poor job or fail to complete the project. Many clients will only work with bonded contractors.
As a contractor, it’s your responsibility to acquire the right permits for the job. Research permit fees in advance and include the cost of the permit in your construction bid. By addressing permits early in the process, you’ll show potential clients you’ve done your due diligence and are prepared to complete the necessary paperwork.
Grow your reputation
Maintaining a web presence can help you build your reputation and drive more leads to your contracting business. Even if you get most of your contracts through bidding sites, having a website and claiming or adding your Yelp Business Page can help to build your brand.
According to Yelp data, 90% of people on Yelp are comparing their options before deciding on a business, and 82% of users say they’re more likely to choose a business that has a Verified License badge on Yelp versus a business that does not. Online reviews, testimonials, and even a social media presence can help prospective clients get an idea of the brand behind the construction bid.
Get more construction leads and land more projects
Knowing how to effectively bid on construction jobs is a big part of running a successful contracting business. The construction bidding process involves reviewing a solicitation for bids, researching the project cost and scope, and submitting a detailed proposal. Construction managers also need to know how to solicit bids from subcontractors like electricians and HVAC technicians.
To find more bid opportunities, you can look for RFPs on bidding websites or promote your contracting business on platforms like Yelp. To expand your online presence even further, consider these contractor advertising ideas to grow your digital presence.
The information above is provided for educational and informational purposes only. It is not intended to be a substitute for professional advice and may not be suitable for your circumstances. Unless stated otherwise, references to third-party links, services, or products do not constitute endorsement by Yelp.