Construction Bidding

What is Construction Bidding?: Construction bidding is the process of submitting a proposal (tender) to undertake, or manage the undertaking of a construction project. The process starts with a cost estimate from blueprints and take off.

Bid Tender:  The tender is treated as an offer to do the work for a certain amount of money, or a certain amount of profit. The tender which is submitted by the competing firms is generally based on a bill of quantities, a bill of approximate quantities or other specifications which enable the tenders attain higher levels of accuracy, the statement of work.

For instance, a bill of quantities is a list of all the materials, and other work such as amount of excavation, of a project which have sufficient detail to obtain a realistic cost, or rate per described item of work/material. The tenders should not only show the unit cost per material/work, but should also if possible, break it down to labor, material and other costs. This provides credibility that the tender is feasible. Two types of bids are balanced bids and unbalanced bids.

Balanced Bid: On a unit-price project, a balanced bid is one in which the unit price for each bid item includes its own direct cost, plus its pro-rata share of the project overhead, markup, bond, and tax.

Unbalanced Bid:   An unbalanced construction bid refers to a situation where the bidder puts a high price on certain items and a low price on other items during contract bidding. This sometimes happens when bidders want to conceal pricing strategies from their competition or to gain more money at the start of a project.