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Construction Bidding: How to Compare Contractor Proposals

Construction bidding is the process of asking contractors to price a defined scope of work, reviewing their proposals, and resolving differences before selecting who will build the project. A useful comparison makes the scope, assumptions, and remaining questions visible alongside the price.

For an owner planning a house, renovation, or addition, the first question is whether each contractor priced the same work. This guide follows a practical sequence for private building projects. Public procurement and other formal bid processes follow their stated rules.

Get the Bid Comparison Worksheet

1. Decide what you are asking contractors to price

An early budget estimate can help test whether a design is affordable. A proposal based on a coordinated drawing set supports a more detailed comparison. Ask each contractor to identify the information used and whether the price is preliminary or based on a defined construction scope.

Start with the Project Planning Checklist to organize your goals and unresolved decisions. Then use the Construction Drawing Checklist to record missing information before inviting prices.

2. Prepare one consistent bid package

Keep an issue list showing the documents and dates sent to bidders. A practical package can include:

Drawings and specifications, identified by issue date and revision.
A concise description of the work, including existing conditions and work outside the project.
Selected materials and equipment, plus clearly identified allowances or decisions still open.
Known access constraints, occupied areas, working-hour restrictions, and site-visit arrangements.
The requested pricing format, due date, contact person, and method for submitting questions.
Requested start and completion information, proposal validity, and the proposed agreement or commercial terms.

AIA’s Instructions to Bidders guidance addresses document distribution, clarification requests, addenda, bid submission, and identification of the proposed contract documents. Use those topics to check that your own invitation gives bidders clear instructions.

3. Give bidders the same clarifications

Set a question deadline that leaves time for responses. Route scope questions through the designated project contact. When an answer changes or clarifies the pricing information, distribute the written update to every bidder and record the document issue it affects.

An addendum is a written or graphic update to bidding documents before the construction agreement is executed. Ask each bidder to identify the addenda included in its proposal. A site conversation is easy to remember differently, so confirm any pricing-related clarification in writing. The AIA–MBA Joint Committee bidding guidance explains addenda and why clear, consistent information matters.

4. Compare scope before comparing totals

Create a row for each major portion of the work and review every proposal against it. Start with demolition, site work, foundations, structure, enclosure, building systems, interior work, and site restoration as applicable. Then record who carries each responsibility.

Included: the proposal identifies the work in its stated price.
Excluded: the contractor leaves the work outside its proposal. Identify who will provide it and obtain pricing.
Allowance: a stated amount is carried for a defined item. Confirm exactly what it covers.
Owner supplied: identify purchasing, delivery, installation, storage, and coordination responsibilities.
Unanswered: request clarification and keep the item open. A blank line does not establish that the work is included.

Check easily overlooked items such as protection of existing finishes, patching, painting, disposal, temporary services, testing, utility work, and final cleaning. Ask about permit responsibilities and fees rather than assuming every proposal treats them the same way.

5. Separate allowances, alternates, and exclusions

For each allowance, ask what product or work it covers and whether delivery, tax, labor, installation, and contractor markup are included. Confirm how the price will be adjusted when the selection or quantity is known. The AIA–MBA allowance guidance emphasizes defining the scope and identifying the included costs; the project agreement controls the actual treatment.

An alternate is a separately priced option, such as changing a finish or adding a patio. Keep the base scope and each option separate, and compare the same selected options across contractors. Record whether an amount is added or deducted and what work changes with it.

For exclusions, request written confirmation and a price for the missing work where it is needed. Keep an owner’s provisional budget amount clearly labeled until a contractor or supplier confirms it. Avoid adding an allowance adjustment twice or adding a cost that is already in the base proposal.

6. Work through an example

The following figures are fictional and demonstrate arithmetic, not market pricing. Assume both contractors priced the same defined project. Contractor A carried an $8,000 finish allowance, while the comparison uses a clarified $12,000 allowance. Contractor A also excluded painting and subsequently quoted $8,000 to include it. Contractor B already includes painting and the $12,000 allowance.

Comparison item (USD)	Contractor A	Contractor B
Original bid	$280,000	$289,000
Allowance adjustment	+$4,000	$0
Painting added to align scope	+$8,000	Included
Comparison subtotal	$292,000	$289,000

Contractor A’s allowance adjustment is $12,000 minus the $8,000 already carried, or $4,000. Adding the full $12,000 again would overstate its comparison price. After the two scope adjustments, Contractor A’s comparison subtotal is $3,000 higher than Contractor B’s.

That subtotal addresses only the stated scope differences. It does not select a contractor, create an agreed contract amount, or account for every remaining uncertainty. Request revised written proposals before treating clarified prices as the basis for an agreement.

7. Review schedule, team, and qualifications

Alongside the scope comparison, record the proposed start date, duration, important purchasing decisions, and assumptions behind the schedule. Ask who will supervise the work, how often that person will be available, and how the contractor will communicate progress and questions.

Ask references about similar projects, communication, handling of changes, and completion of outstanding work. Verify applicable licensing with the relevant government agency and request proof of insurance. The Federal Trade Commission recommends multiple written estimates, asking about major price differences, and checking contractor credentials rather than automatically choosing the lowest bid.

8. Resolve the open items before selection

Review the comparison with your architect or other project adviser where that service is part of their scope. Keep a short decision record identifying the proposal version, accepted options, exclusions, remaining questions, and the reasons for selecting the contractor.

Confirm the final scope, selections, allowance assumptions, and accepted alternates.
Reconcile the drawing and specification issue, addenda, and written clarifications.
Review start and completion assumptions, proposal expiration, and the decision dates the owner must meet.
Review the proposed payment schedule and process for pricing and authorizing changes.
Have the appropriate adviser review agreement terms that remain unclear before signing.

Keep the contractor proposal within the full project budget. Professional services, owner purchases, utility charges, and contingency may sit outside the construction proposal. Use the Construction Budget Worksheet to keep those costs visible alongside the proposed construction amount.

Keep the comparison useful after award

Save the final comparison with the selected proposal and the agreed project records. Once construction begins, use the Change Order Log to track proposed and approved changes without losing the original scope and price history.

Get the Bid Comparison Worksheet

The workbook compares up to four bids and includes a fictional sample, a Scope Checklist, and instructions. Enter each contractor’s actual information and keep unresolved questions visible as you work through the comparison.