United States
Hong KongBidding your first commercial job
A commercial bid is a response to a defined set of documents under defined terms. Pricing is one part; reading the instructions to bidders, the general conditions and the bond requirement is the part that decides whether the bid stands.
Contractors who price well still lose their first commercial bid on the terms.
Read the instructions to bidders first
Before pricing anything. They set the deadline, the format, what must accompany the bid and what makes a bid non-responsive.
A non-responsive bid is discarded unread, and the most common reason is a missing bid bond or a missing acknowledgement of an addendum.
Addenda
Issued during the bid period and they change the documents. Pricing from the original set after an addendum has changed the scope is how a contractor wins a job at a loss.
Acknowledge each one on the bid form. The acknowledgement is what proves you priced the current documents.
They contain the payment terms, the retainage, the change order procedure, the liquidated damages and the dispute route. They are not boilerplate and the differences between two sets are worth real money.
The bid bond
Guarantees you will enter the contract if awarded. Getting one requires a surety relationship, and a first-time contractor cannot arrange that the week the bid is due.
Start the surety conversation before you find the job you want to bid.
Scope gaps
Commercial documents are split across drawings, specifications and general conditions, and the order of precedence decides which governs when they conflict.
The gaps between subcontractor scopes are yours by default. Listing every scope and checking the boundaries is slower than trusting the quotes and it is the difference between a margin and a loss.
Price the administration
Submittals, payment applications, closeout documentation, safety programs and the person who produces them. Residential estimating does not include these and commercial work cannot absorb them for free.
Common questions
What should I read first on a commercial bid?
The instructions to bidders. They decide what makes a bid non-responsive.
Why do first bids get rejected?
Usually a missing bid bond or an unacknowledged addendum, which makes the bid non-responsive.
What are addenda?
Changes issued during the bid period. Pricing the original documents after an addendum is how contractors win at a loss.
When should I arrange a bid bond?
Before you find the job. A surety relationship cannot be built in the week a bid is due.
What do contractors forget to price?
The administration - submittals, payment applications, closeout, safety programs and the person producing them.