When trying to land a new client, you will likely write a bid proposal that shows your company's expertise and eligibility for the job. Knowing how to write a bid proposal is a fundamental part of being a contractor, and proper bid writing practices improve your bid-hit ratio.
This article will explain the critical components of a bid proposal, how to create your bid proposal, and show you a template that will guide you in your future proposals.
Table of Contents
The key components of a bid proposal
Though most construction bids vary, they usually include similar vital elements. These are:
Client and Contractor details
The top of the bid needs to contain the names and addresses of the client, contractor, and project name and address.
The project bid should include the scope to help get a comprehensive cost estimate. This segment contains client expectations, labor requirements, worksite equipment, and procedural methods for completing the work.
You can also explain the grade of work, proposed schedule, quality of materials, and any other features necessary for project completion.
You will need a preliminary site assessment before preparing a bid document in most cases. The bid proposal must document the existing site conditions if you conduct a preliminary assessment. Include the necessary actions that should be taken to remedy poor site conditions and the party responsible for it.
You also need to include a clause on how you will handle existing conditions and if they impact the project's scope and cost.
After outlining the project's scope and the existing conditions, the next step is to lay up a detailed cost estimate. Here, you need to include a cost breakdown of equipment, materials, and labor.
Though most contractors prepare detailed cost estimates, they sometimes forget to include payment terms. It is unlikely that the client will be willing to pay all at once, but it would help to write a list of milestones and what percentage of the project the client needs to pay in a given timeframe.
Construction projects involve various parties that manage different aspects, and it is crucial to include all the relevant documentation and the parties responsible for each project aspect.
This eliminates confusion over the duties and responsibilities of the stakeholders involved. It also shows the authorities who can sign paperwork into legally binding documents.
A project proposal also has a schedule that shows when the work starts and ends. It also includes the date the contractor might receive approval to commence working on the project. Here is also where a contractor should detail the extent to which they will accept liability for delays mainly caused by events beyond control, such as late permit approvals and poor weather.
In your scheduling, do not forget to factor in supply lead times, non-working days, permit approvals, and third-party aspects that might delay your schedule.
The last step in a bid proposal is the formal statement of intent of services accompanied by the client's and contractor's signature. If you are not the sole owner of a company, you will need your co-owners to sign off on the document.
When crafting a bid proposal, there are some guidelines you need to follow to make a lasting impression. Below are some of the items necessary to include in your bid template.
The bid proposal should include a heading that immediately notifies the client of what they are looking at. It makes it easy to sort out the documents before any correspondence.
2. Client's information
You need to include the following details about the client:
- Name: Include the name of the person or company directly tied to the company
- Phone Number
- Email Address
3. Contractor information
As a contractor, you include your details here. The requisite details are:
- Phone number
- Email address
4. Name of project
Here, you should include the title of the project.
5. Summary of services
Here you include a list of the services you intend to provide. These are the essential parts of your bid, as they make the client understand what exactly is included in the bid price.
It would help if you were specific with the services you provide and listed all the key deliverables in the project.
6. Proposed budget
Here you include the estimated dollar amount you would want to be paid for your services. It will help if you arrive at this amount through proper cost estimation to ensure you cover all the bases.
It would also be best to specify a payment schedule if your client has not included one. The payment schedule outlines the amounts you are owed and the intervals you expect payment.
The proposed budget directly impacts your company's cash flow and the project's duration.
7. Additional information
For most projects, the above information is enough, but you may need to include additional project-specific information such as:
- Alternative Prices: This demonstrates how pricing can change with the addition or removal of certain services. However, it is advisable to include alternative prices if some project requirements are vague.
- Unit prices: If you are entering into a unit price contract with the client, it is paramount to include unit prices. Unit prices are primarily relevant in small projects.
- Warranty information: If you plan on providing warranty information after the structure has been built, you can include it here as it can be a significant selling point.
8. Scope of work
Trend Builders shall provide adequate labor, equipment, tools, and materials and supervise the work. They shall also advise on-site use and improvements, building systems, and recommendations on building feasibility.
They shall also provide project management services such as planning, procurement, fabrication, assembly, and integration.
In addition, Trend Builders shall also provide updates on the project progress and keep weekly and monthly reports.
9. Terms and conditions
Outline the expectations of your company and code of conduct. It is also best to indicate the variables that could affect the initial proposal and lead to additional responsibilities.
10. Scope of work
Indicating the scope of work reduces the likelihood of the client setting unreasonable expectations and creates room for the client to communicate any additional needs in advance.
11. Project timeline
Here, you can provide a tentative timeframe with the start and end date for the project.
12. Client's signature:
Leave room for the client to sign
13. Contractor's signature:
Leave some room for the company's representative to sign
Heading: Bid Proposal
7670 Better Street
Atchison, Kansas 66002
3835 Oliverio Drive
Wichita, Kansas 67348
Project Name: Skanska Superannuation scheme
Trend builders have been in the industry for more than ten years. They have built more than 40 projects for clients in the past. We have the expertise in building affordable homes on a cost-effective budget. Our company will develop your project by providing these services:
- Planning: We will help outline the project's mode of operation and aid in budgeting for enough equipment and supplies to help seamless workflow in the project.
- Construction: We will be tasked to do the actual construction work and work with the project stakeholders to bring the project to fruition.
- Hiring subcontractors: If need be, we will also help select subcontractors for electrical works, plumbing, roofing, and framing.
- Construction management: We will also help you secure licenses, supplies, labor, and equipment necessary to complete the project. We also offer supervision services to ensure the project meets quality standards.
The project estimate is about $75,000 in total. Trend builders reserve the right to an extra $80 per hour on mutual agreement in the case of additional works beyond the scope.
Terms and conditions
These terms and conditions stipulate the agreement between Vision Homes and Trend Builders. The contract amount is subject to revision when the works' scope or duration exceeds the deliverables or expectancy dates.
Upon project completion, the deliverables will belong to Vision homes. In contract termination without breach of contract, Vision Homes will pay a termination fee of $10,000 to Trend Builders.
After reaching an agreement, Trend Builders will commence working on the project, and it will take about seven months to complete the project after the start.
You probably know how to prepare a well-formatted bid to help you land your next gig. A well-prepared bid has a considerable effect on making a statement about your company's efficiency. It gives you an edge over your competition, as project owners are more likely to trust a well-organized firm.
A well-structured bid reflects the potential a construction firm gives the client. It can also help reduce miscommunications. A bid with precise requirements, cost estimates, and a detailed scope of work can help minimize change orders, saving time and money for the client and contractor.
Though writing a bid proposal might seem daunting, following the steps listed in this article can primarily increase your chances of success and help you land reasonable offers.