Understanding the Contractor Bidding Process
Why the Bidding Process Matters in Residential and Commercial Construction
Whether it’s a residential or a commercial project, getting a bid is the first important step in the construction process. First, an accurate bid helps you know how much to budget for a project. We understand that not everyone knows how much to budget for up front, but through the bid creation process we will get a more solid understanding of what you want and how we can get you there.
As the business owner or homeowner, the bidding process also helps you develop a concrete idea of exactly what you want your final project to be and look like. We go through every detail from construction to final finishes so you know exactly what you’ll be getting.
We’ll walk you through the common steps of what the bidding process looks like with Maurer Construction and why it’s so important in building a final project you’re happy with.
The Steps of the Construction Bidding Process
Step 1 - Initial Consultation and Understanding Your Goals
From your first phone call or email, we aim to understand your objectives and get an overview of your project. We’ll ask a few questions to determine:
Who you are
Where your home or business is located
Your timeline
Your budget (if you have one)
Scheduling or other constraints
Business operations, if this is a commercial project
We always ask you to describe your project in your own words so that we can clearly understand your vision. From here, we’ll be able to give a rough verbal estimate over the phone, with the caveat that our construction bid will change once we get on-site. If this initial estimate is in your wheelhouse, we’ll move forward.
Step 2 - The Site Visit: Evaluating Existing Conditions
Our initial site visits are an important part of the preconstruction process and key to getting you an accurate residential or commercial contractor bid. They cost $100-$200 and last for 1-2 hours. This is where we get into the nitty gritty details of your project.
We’ll do a site conditions assessment where we take measurements, photos, and detailed notes. We look for any structural issues, utility locations and try to identify any areas that could lead to potential surprises (century old homes or buildings often hide secrets behind their walls). At this point, we also touch base with our key subcontractors to get their input on the project feasibility.
From here, we produce a written estimate to confirm that the scope of the work and budget align.
Step 3 - Creating Designs and Architectural Plans
For most large residential and commercial construction projects, we then move into the design phase. This part of the project is charged hourly, and we work with architects, engineers, and designers to create detailed drawings. Not every project requires all of these trades. If the project is smaller in scope, we can often work with the architect's draftsman directly for less cost.
At these design meetings, the client or client representative is highly involved. This is where we decide on layout, select materials, and choose finishes and colors. The resulting drawings show all these specs—even details like screw patterns, grout line width, fixture location, etc.—to help everyone involved in the project stay on the same page throughout the construction process. If changes are needed once construction begins, we can then have transparent conversations with our clients about budget, materials, and overall construction.
As the general contractor, Maurer Construction’s specialty is the relationships and connections we have with each of these trades and knowing when to bring them together for your specific design-build project.
Step 4 - Site Visit with All Trades
Once the drawings are created, we’ll do a second site visit with all the trades that will be involved in construction. They’ll take a look at the existing conditions and compare them to the architectural plans to ensure everything is accurate.
Step 5 - The Construction Bid
Following our second site visit, we will send you a hard bid. This number includes the construction, material and labor costs, and any equipment needed to complete your project. It also includes permitting costs, which we have covered in depth for both St. Louis City and St. Louis county here.
Our bidding process is a cost-plus hard bid, which is inclusive of the subcontractors’ fees and our markup. We work hard to anticipate issues and have bid accuracy from the beginning, but if we run into something outside of this initial scope, we will bill it as time and materials. Of course, we are always upfront and communicative with our clients if we encounter issues.
Evaluating Risks, Unknowns and Contingencies
There are some projects we will not give hard bids for simply because of the high amount of unknowns. Although we’d love to be able to see through walls, this just isn’t feasible for projects like big remodels of old buildings or homes.
We’ll follow the same process of getting a hard bid, but it will be presented as a rough estimate. We then charge the project as time and materials because we can’t anticipate how many change orders there will be once we open up the walls. However, as we get started and get more information on the project, we will communicate with the client to provide a more accurate estimate if the initial rough bid was off-base.
Something we often do in this scenario is create a flex fund. This is a bucket of money included in the estimate that isn’t initially assigned to a specific trade. It helps us address the what-ifs that inevitably arise when we get into construction, and allows us to make decisions efficiently so that we don’t waste time or money.
The flex fund is usually around 10% of the total budget, and at the end of the project you will see a line item for exactly what the money was used for (if the money isn’t used, it’s returned to you). It isn’t for upgrades or small extras; it’s to help us mitigate unexpected issues on-site and keep your project on time and within budget.
What Makes Bids from Different Contractors Vary So Much?
We understand that many business owners and homeowners will get several bids for their project. We welcome this comparison because it helps our clients feel confident in their final decision. Here are some things to consider when comparing bids from general contractors:
Differences in scope interpretation and line items - Cheap bids often mean missing line items. It is important to clarify the specifics so you know you are comparing apples to apples.
Experience level and contractor network - A more experienced contractor has likely worked on many projects similar to yours, which helps inform the overall cost. We are better able to anticipate surprises or things to consider from working on many different projects over the years. Our network is also highly valuable to us and our clients. Even if our experience might not cover a specific scenario, we know a professional who is an expert and can get them on the job site quickly.
Quality of subcontractors - We vet all of our subcontractors thoroughly, looking at their past and current work, and only work with them if they are up to our high quality standards. Other contractors may not go through this same process, which can contribute to differences in bids.
Material choices - A lower bid may mean cheaper materials, while a higher bid may indicate higher-quality finishes. This is something you will want to talk with the contractor about specifically.
How to Evaluate a Contractor Bid Fairly (and Red Flags to Avoid)
With the above information, you’ll be better prepared to evaluate the bids you may get from different contractors and know how to compare them. It’s most important to find a contractor you trust who can complete your project as bid.
Red flags you’ll want to avoid: Lump-sum bids with little breakdown, unrealistic timelines and low-ball pricing.
Green flags you’ll want to consider: Good communication, positive references, clean appearances and transparent pricing.
Revising Bids or Changing Scope
As a general rule, we don’t discount our bids. Our pricing is fair and transparent based on the costs of the project, and includes our markup. We are always happy to talk through specifics with you if there’s something you’d like more clarity on.
Coming into the project with a pre-determined budget is the very best way to ensure we are meeting expectations on cost. This is especially important in design-build projects where there are extra costs associated with creating architectural drawings. What we would hate to see is a client designing their dream commercial remodel or home renovation, only to discover after the fact that the cost to build is outside their budget. We understand that you may not know how much to budget for a particular project. In this case, we’ll give you a rough estimate and help you understand what it takes to accomplish your build.
Final Thoughts: Why a Transparent Bidding Process Leads to a Better Project
The best projects are ones where the contractor and the business owner or homeowner are on the same page from beginning to end regarding budget, timeline, and project scope. From our very first touchpoint with you, we work hard to ensure that you feel well-informed and comfortable with the proposed project so that this good relationship can carry into the construction phase.
