Bidding on Commercial Work

Advice on effective bidding in the commercial world, and tips on avoiding trouble. November 5, 2007

I am new to the commercial side of bid work. Actually, I know nothing about how it's done. I recently joined Builders Exchange. For those of you not familiar with Builders Exchange, it's a plan room I will go to and view prints of upcoming projects. What do I need to do after working up a bid on a project? Do I just fax the prospective contractors my prices on certain things, or do I have to get a bid bond? I am thinking the contractors are the only ones needing the bonds, but I am not sure. Also, do I need any standard paperwork to fax along with my bid?

Forum Responses
(Business and Management Forum)
From contributor L:
About half of what we do is commercial open bid work on both public and private jobs. Unfortunately, once the job is posted, the turn time for the bids is fairly short. I get most of the leads from the Blue Book or the Daily Journal of Commerce (we're in the north Puget Sound area). I either look at the plans online or download them and have the appropriate plan pages printed. Remember to download and review the specifications for the section you're bidding, such as casework or millwork. Secondly, review if the job is a prevailing union wage job. Also pay attention to any addendums that are posted before bid date that may change the project details. After coming up with the estimate, make sure you find all of the generals that are bidding the job and fax them your bid, which states what sections you're bidding, what if any exclusions you may have, and that you have reviewed any bid addendums posted. I like to fax my bids the morning of the bid date, since some generals will shop your price around if they have enough time. If you get the job and the low bid general puts you under contract, be prepared to work at their schedule and not yours!

From contributor Y:
The above post is good. I might add that there are always some generals you don't want to bid. Ethics is not their strong point! Some like to play the back-charge game to the hilt and if you get one of them, you are bound to get screwed. Big jobs never follow your schedule or theirs. There are some millwork shops that know when to lowball because they know it is the type of job that will be loaded with change orders. They figure on making all their profit on the change orders. The generals play the same game, especially with government work. If you go into commercial, make sure you get any changes in writing and the price and delivery time down before you do any changes. The general will push you to do otherwise - donít. By the nature of big jobs, things will get behind, and decisions will be delayed, as the guy at the end of the process (the interior finish work), it's you that will catch the short end of the time frame. If you don't have the capacity to produce all the changes, you will have piles of problems. You can't start a lot of the work until you can do field measurements - after the drywall is up, the plumbing lines, electrical, heating, etc. is in place (sometimes in your way). When you go to field measure, take your digital camera and record any items that need to be addressed by the other trades or general and be sure to document them. Send copies to the general asking for verification of the problem and what their proposed solution is. Some of them will work hard and fast at this point to resolve the issues, some will just tell you to deal with them. You will have to get signed change orders for anything that varies from the original specs. One note on specs, they usually take precedent over the drawings. If there is a conflict (almost always), bring it to the attention of the general or design firm ASAP.