When a construction company is trying to get a big job, one thing they do is bid for the job. If you would like to learn what a construction bid is and how the construction company comes up with an amount, then this piece is for you. Read on to learn more.
The bidding process usually happens on big jobs as well as government jobs. Construction companies submit a bid to the company who needs the job done, and that company looks at all the bids and usually chooses the lowest bid. The bid is basically an estimate. In the bid, the construction company will put how long they think it will take, what kind of materials they think they will use and their costs, as well as how many employees or subcontractors they think they will need and their costs. There may be other things included in the bid, including things like penalties for taking longer than estimated or bonuses for getting done faster.
Creating a good estimate isn't easy. The construction company needs to come up with an amount that will be competitive with bids from other companies so that they will be the one that gets the job but will also be profitable for the construction company. That can be a tight line to walk.
In order to walk that line and make a viable build, a company will need to use someone who has spent the time to learn how to create a good bid. That person may be called a cost estimator. The estimator will spend a lot of time doing a comprehensive survey so that they can create a viable bid. That survey will include going out to the prospective job site so that they can see what challenges would surround working at that particular area. That can help the estimator have a good idea as to what kind of heavy equipment will be necessary.
For example, will the construction company need to create a temporary road to get to the site? The estimator will also look at the other companies in the area who may also bid on the job. Some jobs have an open bidding process so that all involved companies know the names of the other companies bidding, while others have a closed process. Either way, the cost estimator will look at the other construction companies, how many jobs they are already doing, how well the company is doing, how often they have done other jobs like this, and several other factors. That can help the estimator come up with an idea as to what those other companies may bid for any particular job.
Bidding allows people who need to have something built to pick a construction company that can do the job at a reasonable amount.