What Your Contracting Business Needs to Submit a Bid

You expect to show proof of license and insurance, but what about your credit? Can you verify that you are compliant with prevailing wage laws on bids for public projects? Here’s a list of things you need to know before you submit your bid.

Bid vs. Estimate
There are several instances in which contractors are asked to provide an estimate. This is a count of your expenses for materials and labor. The prices you put there often include your profits, as well. Although an estimate is designed to be in-depth and quite representative of the total amount you intend to charge, it’s not quite as firm as a bid. Once you submit a bid for a contract and it is selected by the property owner or general contractor, those numbers are considered final. Any later changes must be submitted for discussion and approval.

Understanding the Request for Tender
An organization makes a request for tender (RFT), sometimes called a request for proposal (RFP) or an invitation for bid (IFB). There’s a specific process for this, so it’s often entities in some area of public sector work who make the request. This is a request for interested companies to obtain a bid package so that they can submit a bid to do the work. In most cases, there’s a specific deadline in which you need to submit your bid. Usually, there will be someone in the organization who works to verify that the entity is taking all complete bids seriously, without any closed-door negotiations with specific businesses.

Bidding Based on Management Approach
Two of the most common types of project delivery at present are design-bid-build (DBB) and design-build (DB). The DBB environment is where you’re most likely to need to submit a bid. In the former, the property owner (or organization, if the land is held publicly) hires an architect to create a design. This person may serve as general contractor for the project, or assist in the hiring of one. With the property owner, the architect puts out a request for tender and considers bids. In this environment, you’ll get a chance to look at the plans and determine if the project is right for your skillset. If the architect selects your bid, you’ll sign a contract to deliver the project as designed.

Paperwork Needed
What you need to make a bid varies widely depending on the organization and the project. In any case, you’ll want to request a bid package that confirms everything you need to include. For almost any bid, you’ll want to put in:

• a proposal for the work
• drawings or renderings of your part of the project
• detailed listing of your bid pricing
• licensing and insurance information
• plans concerning subcontractors, if you’re hiring them
• references
• credit information, as needed

If you’re bidding on a public works project, you’ll also need to meet the standard contract clauses for the state. For example, you will need to verify the current prevailing wage laws and make sure that the rate you offer your employees meets the standard. This may involve a lot of paperwork for a single bid. Many businesses purchase software to help them assemble it.

Making a complete bid that has all the relevant details is a big part of your success as a licensed contractor. Like many other aspects of running a business, you’ll get more confident at it as you learn. To start on your career path to becoming a contractor, contact CSLS today!