How to Bid on a Construction Project

by Petra Turnbull; Updated September 26, 2017

The process of construction bidding is a procedure where a building developer or his representatives invite contractors to apply for the contract of a project. The proposals by the contractors must be submitted by a given deadline, after which the developer will compare the tenders and choose a suitable candidate. The final decision to award a contract is usually not only guided by the offered price, but also by the contractors' reputations in the trade and their past professional achievements.

Step 1

Prepare a reference sheet where you assemble information about previous completed work, and give telephone numbers of contented customers and business contacts or associations. The list of references should accompany every proposal. Save the template on your hard drive for future proposals and update it regularly.

Step 2

Write a cover letter, leaving the spaces for proposed prices blank. Save the letter as a template on your hard drive for future use.

Step 3

Find suitable projects for bidding by searching Internet databases for construction tenders, contacting developers or subscribing to local and federal government email alerts for open tenders.

Step 4

Visit each of the proposed locations and take photographs. Make your own sketches of the future building sites and note remarkable features, including wells and shafts, possible underground cables and biohazards.

Step 5

Consider each project carefully before preparing a bid. Evaluate your available manpower, technical equipment and expertise, and compare it to the scope of each venture. Take into consideration the expected competition and your current workload and cash flow. Do not waste time on the preparation of bids for projects where you are likely to be outbid, or which you will have difficulty completing due to other obligations.

Step 6

Appraise the costs of the required manpower. Include your own wages and the cost for administration, overheads and external expertise.

Step 7

Calculate the costs for required materials and equipment by checking current prices with suppliers. Use rental figures for equipment even though you should bring your own, as you will have to cover for the maintenance of the machines.

Step 8

Evaluate contingencies including adverse weather conditions, possible hazards as noted during the site visits, potential equipment and material shortages due to high construction activity in the area. Calculate the extra costs these site-specific circumstances can incur.

Step 9

Define your profit margins. If you are unsure about the amount, look at previous winning bids for construction projects for a local government or the federal government, which should be on public record.

Step 10

Transfer the figures to the tender form supplied by the customer, or prepare your own bidding sheet where you specify the calculated costs. Construction bidding templates are available for free download on the Internet.

Step 11

Send your bid proposal with a cover letter and your reference sheet within the stated deadline and await response.

About the Author

Based in the U.K., Petra Turnbull has been working as a journalist since 1989. Her articles on the film and book trades have been published in "Screen International," "Dagens Naringsliv," "Film Magasinet" and other Scandinavian newspapers and magazines. She now manages her own book shop. Turnbull holds degrees in law and economics from Goethe University, Germany and Oslo Business School in Norway.