Key Takeaways
- Convert SOW items into quantity × unit cost line items.
- Bid packages produce comparable contractor proposals.
- Line-by-line comparison catches scope omissions.
- Weight price at 40% with other criteria.
Converting preliminary estimates into detailed line-item budgets and professional bid packages.
Building the Detailed Estimate
For each SOW item: measure quantity, research unit cost, calculate extended cost, assign to category. Add general conditions, permits, and PM costs.
Bid Package Preparation
Include: invitation letter, SOW, plans, bid form template, contract terms, site access instructions. Send to 3-5 contractors with 1-2 week response period.
Bid Comparison and Selection
Create line-by-line comparison matrix. Flag items deviating 20%+. Weight: Price 40%, Scope 20%, Schedule 15%, References 15%, Terms 10%.
| Criterion | Weight |
|---|---|
| Price | 40% |
| Scope Understanding | 20% |
| Schedule | 15% |
| References | 15% |
| Terms | 10% |
Selection scoring matrix
Guided Practice: Bid Selection for $75K Renovation
Selecting a GC from three bids.
- 1Bids: A $71.5K, B $78.2K, C $68.9K.
- 2C omits $4.2K electrical. Adjusted C = $73.1K.
- 3References: A strong, C mixed.
- 4Select A—best price/quality combination.
Key Takeaways
- ✓Convert SOW items into quantity × unit cost line items.
- ✓Bid packages produce comparable contractor proposals.
- ✓Line-by-line comparison catches scope omissions.
- ✓Weight price at 40% with other criteria.
Sources
- NAHB Remodeling Guidelines(2025-01-15)
- RSMeans/Gordian Residential Cost Data(2025-01-15)
Common Mistakes to Avoid
Selecting the lowest bid without verifying scope completeness
Consequence: Lowest bid omits $4,000-$10,000 in scope items that become change orders at premium pricing
Correction: Perform line-by-line comparison to identify scope gaps before awarding contract
Using the contractors own contract template without review
Consequence: Contract may lack essential protections: retainage, change order process, warranty, dispute resolution
Correction: Use investor-favorable templates (AIA A101 or custom) reviewed by construction attorney
Test Your Knowledge
1.How many contractors should receive a bid package?
2.What weighting should price receive in contractor selection?
3.At what deviation should line items be flagged in bid comparison?