What is the Bidding Process in Construction?
Everything you need to know about the bidding process in construction is here in this guide so discover the basics of bidding and get insider tips.

The bidding process in construction is all about winning construction contracts. General contractors bid on a construction project by presenting a cost estimate. The property owner selects the most suitable bid and hires the contractor for the job.
Construction Bid VS Construction Estimate
Construction bids and estimates are not the same thing. Cost estimation is a part of the bidding process. It is a step in construction bidding. Bidding, also known as tendering, is more than creating an estimate. Although construction estimate is a crucial step bidding consists of more steps.
Steps of Bidding Process in Construction
1) Invitation to Bid
In the first step of the bidding process in construction, the property owner puts out the bid request. He invites the contractors to bid on the construction project, through a bidding platform.
What Does the Bid Package Consist of?
The bid package usually consists of
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Details about the construction project
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Preferences of the owner
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Type of contract
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Method of project delivery
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Minimum experience or qualifications needed to apply
2) Bid Submission
General contractors will review the bid and decide if they want to bid on it or not. They calculate construction costs by analyzing the direct and indirect expenses related to construction. Sometimes contractors or subcontractors may outsource the process of cost estimation to a Cost Estimating Services company. The main benefit of outsourcing is that they get an accurate and precise estimate that helps to win bids.
Bidding Estimate is one of the most popular cost-estimating companies that use advanced software (Planswift, Stack, On Screen Takeoff, Bluebeam, etc) to calculate the cost of
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Materials
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Labour
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Equipment
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Permits and Inspection
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Utility Bills
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Administrative Expenses
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Transportation Cost
3) Selecting a Bid
The next step of the bidding process in construction is that the property owner or the representative who put out the bid reviews all the proposals. They select the one that is most suitable for their project.
In the past, it was a common assumption that the lowest bid is selected but that is not true anymore. Property owners will consider that the contractor has to offer and go through the qualifications as well. This helps them to choose a bid.
4) Negotiating a Contract
After choosing a bid, the contract is drafted between the general contractor and the concerned party. They both reach mutual decisions that are included in the contract. But what happens if the negotiation fails? In that case, the property owner will review the bid again and select another one till the contract is established.
5) Bid Bond
In some cases, the contractor is also required to submit a bid bond. A Bid Bond is a part of the bidding process in construction that is a guarantee. By submitting a bid bond, the contractor is agreeing to the successful completion of the construction project.
Common Bidding or Tendering Types
The bidding process in construction can be divided into 4 different types.
1) Negotiated Tendering: In negotiated tendering, the property owner selects a contractor and forms a contract with them. This type of tendering is non-competitive as there are only selective contractors bidding on it.
2) Open Tendering: Unlike negotiated tendering, open tendering allows every contractor to bid on it. Most public projects follow open tendering. This type of tendering can get highly competitive.
3) Serial Tendering: In serial tendering, the owner is looking for a contractor to handle multiple projects over some time. These projects are similar. Serial tendering saves time, instead of bidding separately for each project the project owner bids all together.
4) Selective Tendering: Selective Tendering is a bidding method that combines open and negotiated tendering. A handful of contractors who seem to be the most suitable to handle the job are invited to bid. These contractors are qualified enough to handle the project. Then the owner chooses any one proposal and forms a contract.
Best Practices for Bidding
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Using reliable Construction Estimating Services for an accurate budget and cost analysis
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Only bidding on the job you have the expertise in
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Using advanced cost estimating software and real-time pricing guides for efficient estimates
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Bidding usually has a limited timeline so managing time is crucial for the timely submission of the proposal
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Using historical data as a baseline but don't rely on it too much
To Conclude
The bidding process in construction can seem complicated when you are first starting out but with time one gets a hang of it. Cost estimating agencies such as Bidding Estimate, have further made the process easier. Nowadays many professional contractors are relying on cost estimators to assist the bidding process. Outsourcing allows them to bid on multiple projects at once, meet deadlines, and also increase the chances of bid winning.
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