11 Costly Mistakes Contractors Make When Bidding and How to Avoid them - Bonding Solutions

11 Costly Mistakes Contractors Make When Bidding and How to Avoid them

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A successful contract bid needs both time and financial effort from the contractor prior to bidding. From reading and comprehending project blueprints to effectively calculating the prices of supplies, equipment, and labor involved in a task, many factors exist and need to be considered. As a result, bid preparation can be the difference between winning and losing a project. Here are some of the costs associated with manual bidding and how Bonding Solutions’ resources may help you minimize them:

Bids are Submitted Incomplete

Simple mistakes are often the most costly. When it comes to submitting a bid, all areas of the bid need to be filled out completely. This can include the cost of materials and labor, designated supervisors, project timeline, subcontractors, and more. Every project is different and the project owners may have different bid requirements, which means contractors must be diligent when submitting bids.

Bidding on Projects that aren’t your Niche

As a contractor, growing your business is always a top priority but choosing the right projects is important. Winning projects that your organization is unable to complete or are outside of your may be just as expensive as losing them. It’s never too late to drop an offer you’ve been working on. Let’s imagine you’ve acquired blueprints, attended a prebid meeting, and begun collecting subcontractor prices, only to discover that your firm will not make a profit after calculating the figures. The best course of action is to abandon it and move on to the next project.

If you discover at any point throughout the bid preparation process that your organization is unable to handle the scope and requirements of the project appropriately, acknowledge that it is time to move on from the project as a whole. It might be challenging to strike the correct balance between bidding and getting enough jobs.

On the one hand, you don’t want to bid on and win so many tasks that you can’t effectively manage and deliver the projects, but you also don’t want to have too little work that you don’t make any money, and your employees aren’t occupied. Maintaining a profitable business requires selecting the correct task to bid on.

Bid forms and documents that are incomplete

Failure to correctly complete the bid form and provide all needed papers will almost always result in the rejection of a winning offer. Anything from bid bonds to acknowledging receipt of any addenda may be required documents and documentation. Using a checklist while you prepare your bid and then double-checking to verify that everything is included is a fantastic way to guarantee that you have all the essential papers. Before submitting your offer, it never hurts to have another set of eyes read through it to be sure nothing has been overlooked.

A few extra conditions come with drafting your offer that, if not followed or overlooked, might result in your bid being rejected. The first is neglecting to get prequalification for a project when necessary. The second is failing to attend a required pre-bid meeting. If you fail to comply with either of these requirements in order to bid on a project, you will be unable to bid on the project.

Communication Issues

Trying to interact with members of your project team across numerous platforms? This might lead to misunderstandings and misleading information. When everyone isn’t on the same page regarding a project, it can lead to costly and project-consuming mistakes.

Stay informed by using Bonding Solutions software to streamline all communication. Respond to queries on the platform, send out addenda, revise the bid, and ensure that all stakeholders are informed of project changes and updates.

The Innovation

Many businesses utilize bidding software to help in estimates, at least that’s what they assume. Companies grow along with technology, and you may wish to try out the latest software for a specific project.

Be mindful, though, that with change comes a learning process, which is not always in your favor. Software flaws cause many bidding errors, so be sure you have thoroughly investigated and tested your new tool before bidding.

Templates and Forms

This is a common blunder that anybody may make. Companies utilize specialized forms and templates to assemble and assess bids more quickly, but what happens if you don’t complete them? You are not meeting the bid criteria, and despite your best efforts, you are officially out of compliance with the bidding process due to the procedure.

If you follow a bid checklist, you can prevent blunders like these. Begin by reviewing the whole RFP and assigning the estimator to create a bid template checklist to ensure that all papers are filled out and ready to submit.

Due Diligence and Do

One of the most common reasons for bidding errors is failure to visit the site. Attend the pre-bid meeting and make sure your estimator is familiar with the location. When the appropriate persons visit the site, unanticipated situations (not those that are genuinely unknown) can be noted.

Common bidding blunders include catching certain things, difficulties, and other pre-planning tasks necessary to construct a single activity. Create a pre-bid checklist to record soil conditions, existing structures, permitting issues, access, infrastructure, overhead power lines, site constraints, and other items that will increase the cost of your project, similar to the preceding item.

Running out of gas?

Equipment and tools are frequently forgotten and are not included in proposal templates. Including cost, lubricant, and maintenance charges in the bid form is not only required, but it may also add up to 5% to the project’s cost, so be sure to include these to prevent bidding errors. Tool replacement expenses and components and maintenance are extra expenditures to consider along the process.

Remember that a drill is useless without drill bits, and a nail gun is useless without nails. Also, because these tools will require power, factor in the expenses of power cables, batteries, or gasoline as needed.


Many bidding templates leave off-line items for labor expenses, anticipating that subcontractors will execute the majority of the job. But what happens when you perform for yourself? You’ll need to account for labor expenses, insurance, benefits, and any other labor-related soft costs.

Make sure you understand these charges and schedule time to talk with your payroll department or have them present you with the statistics. Fringe benefits can account for up to 40% of labor expenditures. Thus, these are the bidding blunders to avoid.
The list may go on indefinitely, including difficulties such as basic math, insurance, and possibly all unaccounted-for general conditions expenses. Bidding errors are more prevalent than you think and can be quite costly to your company.

To reduce your bidding blunders, create a procedure that employs a checklist to capture all other difficulties.

Incorrect Takeoffs

If you don’t take the time to thoroughly analyze the plans and specifications to ascertain precise dimensions and takeoffs, your bid will be incorrectly calculated. In order to correctly bid on a project, accurate measurements and numbers are required. In order to submit an exact bid, takeoff software can guarantee that precise measurements are collected.

Inaccurate measurements can cause you to underestimate or overestimate the amount of building supplies and labor required to accomplish the task, resulting in higher or lower construction expenses. When determining your bid, it’s also crucial to use the correct units of measurement. Using square feet instead of square yards or vice versa might significantly impact your anticipated expenditures.

You must also ensure that you are taking measurements from the correct location. Frequently, the plans will tell you not to scale the drawings or utilize the stated or computed measurements in the specifications. This happens more frequently with electronic documents since extending or lowering the drawing size to print it might cause the scale to be inaccurate, affecting your bid. You should contact the architect for clarification if you have any questions about where to take your measurements.

Subcontractors that aren’t qualified

It might be challenging to obtain subcontractor prices. You want your subcontractors to offer cheap costs, but you also want confidence that they can do the task efficiently. This is true whether you’re working with a subcontractor for the first time or have worked with them for years. One option is setting up a prequalification procedure for subcontractors who want to collaborate with you. By assessing the quality and execution of previous projects, you may have a clearer sense of the job they are capable of.

To guarantee you are obtaining the best costs, you should seek quotations from at least three different businesses for each trade you will need to subcontract out work for. Examine each subcontractor bid carefully to ensure that the costs stated are comprehensive and correct.

Clearly explain the scope of work the subcontractor is expected to undertake when obtaining bids from subcontractors. If you don’t properly describe the scope of services you want from subcontractors, you risk adding excessive expenses to your bid due to work that you and your subcontractor are bidding on.

If you want to understand more about bidding mistakes, contact Bonding Solution. We are a surety firm that focuses on our customers’ individual needs and tailors bond packages to provide them with the best possible competitive edge. We aim to keep satisfying our clients, educating our personnel, and assisting our partners in their success. Let’s make a change together by calling us TODAY at 1 (877) 841-6745!

published on Monday, July 18th, 2022


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