How to Bid on Commercial Construction Jobs – The Ultimate Guide

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Bidding on commercial construction jobs is a crucial skill for growing your construction business. 

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It's not just about throwing your hat in the ring or giving the most accurate or lowest price.

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It’s about understanding the process, knowing how to price your work, and presenting your company as the best option. 

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This guide will take you through the essentials of bidding on commercial construction projects, offering practical tips to help you win more profitable contracts and scale your business.

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1. Understanding the Construction Bidding Process

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The construction bidding process is your gateway to securing work and growing your business. 

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It involves submitting a formal proposal that outlines the costs, timeline, and qualifications required to complete a project. 

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However, it’s more than just presenting numbers—it’s about convincing the client that you are the right partner for the job.

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Here’s a simplified breakdown of the process:

1. Finding Opportunities: The first step is to find the right project to bid on. This could come from public listings, private invitations, or direct relationships with clients. It’s crucial to evaluate if the project aligns with your company’s capabilities and goals.
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2. Reviewing Project Documents: Once you’ve identified a suitable project, the next step is to carefully review the bid documents. These include blueprints, specifications, and timelines. Understanding the scope of work is critical to ensuring your proposal accurately reflects what’s required.
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3. Estimating Costs: Estimating is the most important part of the bidding process. You need to calculate the costs for materials, labor, equipment, and overhead, while also factoring in profit margins. It’s a balancing act between being competitive and ensuring the project will be profitable for your business.
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4. Preparing the Bid: With your cost estimates in place, you’ll prepare a detailed bid proposal. This document will include pricing, timelines, and key information that highlights your company’s qualifications. The goal is to stand out by showcasing why your team is the best fit for the job.
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5. Submitting the Bid: After finalizing your bid package, you’ll submit it according to the client’s requirements. This could be through an online portal or directly via email. Make sure to follow all guidelines carefully—missing a step could disqualify your bid.
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6. Post-Submission Follow-Up: After you submit your bid, it’s a good idea to follow up with the client or general contractor. This shows your interest and can provide valuable feedback, even if you don’t win the project.
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By understanding these basic steps, you’ll be able to find ways to win more projects by improving each part of the process. 

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Each bid is an opportunity to demonstrate your expertise, reliability, and value—key factors that clients look for when selecting a contractor.

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2. Types of Construction Bids

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Open Bids:

• What They Are: Open bids, also known as public bids, are accessible to any contractor who wants to submit a proposal. They are typically used for public projects funded by government entities, such as schools, hospitals, or infrastructure projects.
• How They Work: These bids are advertised publicly through online platforms, newspapers, or government websites, and any qualified contractor can participate.
• Pros: High volume of opportunities and transparency in the selection process.
• Cons: High competition, often with many contractors bidding, which can drive down prices. You need to be very competitive on pricing and thorough with your bid submissions to stand out.

 Closed Bids:

• What They Are: Closed bids, or invited bids, are restricted to a select group of contractors who are invited by the project owner or GC. These are often used for private projects, such as commercial developments or high-end residential projects.
• How They Work: Only contractors on the invite list can submit bids, which means there’s less competition compared to open bids. Invitations are typically based on past performance, reputation, and relationships.
• Pros: Reduced competition and potentially higher profit margins since fewer contractors are bidding.
• Cons: Requires strong networking and a solid track record to get invited. If you’re not already known to the GC or project owner, it can be challenging to get on the list.

 Negotiated Bids:

• What They Are: Negotiated bids involve working directly with the client or GC, often bypassing the competitive bidding process altogether. These are usually based on pre-existing relationships or because of a unique capability that your company offers.
• How They Work: In a negotiated bid, terms, scope, and pricing are discussed directly with the client or GC, allowing for flexibility and adjustments to meet both parties' needs.
• Pros: Greater control over pricing, scope, and terms. Allows for more open communication and adjustments during the project planning phase.
• Cons: Typically requires a strong relationship with the client or GC. You need to demonstrate clear value or have a unique offering to justify bypassing the competitive bid process.

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3. Finding Commercial Bid Opportunities

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Networking and Relationships: Building strong relationships with GCs, property owners, property managers, investors, and other contractors is crucial. 
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Regularly touch base with key contacts, attend industry events, and make sure your company stays top-of-mind.

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You can use platforms like Linkedin to connect with people online as well. You can research your ideal customers by company, job titles, geographic locations and more. 

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Online Platforms and Bid Boards: Utilize digital tools like PlanHub, BuildingConnected, and local builders’ exchanges to find suitable projects. These platforms simplify the search process, giving you access to a wide range of opportunities.

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Direct Outreach to Client’s: Don’t wait for bids to come to you. Reach out to GCs directly, introduce your business, and request to be added to their bid lists. Consistent outreach can open doors to valuable projects.

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Don’t wait for bids to come to you; proactively reach out to not just GCs, but also property managers, owners, developers, and investors. Start by identifying key contacts through tools like LinkedIn or industry directories, and craft personalized messages that introduce your business, highlight your expertise, and express interest in being considered for upcoming projects. 

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Use multiple channels such as email, phone calls, and LinkedIn to make connections and follow up consistently. 

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Focus on building relationships and demonstrating the value you bring, such as cost-saving solutions, reliability, or unique capabilities. 

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For property managers and owners, emphasize your experience in tenant improvements or maintenance work; for developers and investors, highlight your track record in delivering on-time and within budget.

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By actively engaging with these stakeholders, you can create opportunities and establish your company as a trusted partner in commercial construction projects.

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4. Preparing a Competitive Bid

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Detailed Cost Estimation: Accurate cost estimation is the foundation of a successful bid. Include all costs—labor, materials, equipment, and overhead—and make sure to account for profit margins. This helps you avoid underbidding or overbidding, both of which can hurt your business.

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Understanding the Scope and Requirements: Carefully review the project documents.

Make sure you fully understand the scope, specifications, and any unique requirements. Missing details can lead to costly mistakes.

Ask questions and collect the information you need to make an informed bid. Don’t be afraid to request information, also called an RFI for request for information. 

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Risk Assessment and Contingencies: Identify potential risks, such as material price fluctuations or project delays, and include contingency plans in your bid.
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This is especially important for large, long term projects and do not need to be included in your bid but are also helpful to think through and plan for internally. 
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This shows that you’re prepared and can handle unexpected challenges.
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5. Adding Value to Your Bid

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Highlight Unique Capabilities & Proven Reliability
Showcase your specialized skills, certifications, or past project experience. Use real-life examples to demonstrate how you’ve completed similar projects on time and within budget, including key stats, case studies, or testimonials. Offering to discuss these examples in a call or presentation helps build trust and transparency.
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Value Engineering Recommendations
Provide cost-saving alternatives by suggesting different materials or methods that lower costs while maintaining quality. Offering value engineering solutions shows your commitment to delivering the best value for the client’s budget.
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Pre-Construction Collaboration
Emphasize how early involvement during the pre-construction phase can optimize planning and budgeting. Collaborating from the start helps identify challenges, improve scheduling, and ensures clear communication throughout the project.
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Flexible Payment Terms
Offer flexible payment options, such as milestone-based payments, to accommodate the client’s financial needs. This demonstrates your willingness to work with their cash flow requirements, making your bid more attractive.
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Provide a Comprehensive Project Management Plan
Include a detailed project management plan in your bid, outlining how you will handle timelines, communication, change orders, and potential risks. This level of preparation reassures clients that you are committed to smooth, transparent project execution.

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6. Pricing Strategies for Bidding on Commercial Jobs

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When bidding on commercial construction jobs, selecting the right pricing strategy is essential for winning contracts while maintaining profitability.

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Here’s a simplified breakdown of the main pricing strategies to help guide you as you start bidding on commercial jobs:

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• Starting with Higher Bids and Adjusting Down: When working with new GCs, consider starting with a higher bid and lowering your margins on future bids if you don’t win the job initially. This helps you test the competition and find the right pricing balance without undercutting your profits too early.
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• Competitive Bidding (Lowest Price Wins): In highly competitive markets, offering the lowest price can help secure jobs. While this increases your chances of winning, it can also squeeze profit margins, so ensure that your costs are covered, and there's still room for profit.
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• Target Margin Pricing: This method involves setting bids to achieve a specific profit margin, ensuring consistent profitability across projects. It’s a stable approach that focuses on long-term financial health, but you need to remain competitive while hitting your target margins. Typical margins vary based on project size:some text
  • Small Projects ($50,000 - $1,000,000): Aim for 25% to 30% profit margins for smaller projects like tenant improvements and minor renovations.
  • Medium Projects ($1,000,000 - $5,000,000): Expect 20% to 25% margins for office remodels or mid-sized commercial developments.
  • Large Projects ($5,000,000 - $20,000,000): Margins typically range from 10% to 15% for larger commercial builds or significant renovations.
  • Extra Large Projects ($20,000,000+): For major commercial developments or infrastructure projects, margins usually range from 8% to 12%.
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• Cost-Plus Pricing: With this strategy, you charge the actual cost of the project (labor, materials, etc.) plus a fixed percentage or fee. This model is ideal for projects where costs might fluctuate, as it ensures you're covered while offering transparency to the client.

Choosing the right strategy depends on your relationship with the GC, the level of competition, and the nature of the project. Use these approaches to find what works best for your business while keeping profitability in mind.

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7. Commercial Bid Structure & Free Template

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Creating a well-structured commercial bid is crucial for making a professional impression and ensuring your proposal is clear and comprehensive. Here's a guide on how to organize your bid, including the key elements that should be included:

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1. Header and Branding:
   • Company Logo and Name: Place your logo prominently at the top of the document to brand your bid and make it instantly recognizable.
   • Company Address and Contact Information: Include your office address, phone number, email, and website. 
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2. Bid Details:
   • Bid Title: Clearly label the document with a title such as "Bid Proposal for [Project Name]" to specify the purpose of the document.
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3. Recipient Information:
   • Prepared For: List the name of the person or company the bid is being prepared for, including their property address and company.
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4. Project Information:
   • Project Name and Location: Clearly state the name and location of the project. 
   • Project Scope Summary: Provide a brief description of the project scope to give an overview of what the bid covers.
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5. Bid Date:
   • Include the date the bid is prepared and submitted. This helps set timelines for validity and references for any future communications.
     
     
6. Introduction and Executive Summary:
   • Introduction: Begin with a brief introduction that thanks the recipient for the opportunity to bid and summarizes your company’s qualifications.
   • Executive Summary: Offer a high-level overview of the proposal, including key points like timelines, costs, and unique value propositions. This section could be included in the introduction. 
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7. Detailed Breakdown of Costs:
   • Line Items for Labor, Materials, Equipment, and Overhead: Provide a detailed cost breakdown to show how you arrived at the total bid amount. Transparency in costs builds trust and helps the recipient understand
   • your pricing.
   • Contingencies and Allowances: Include any contingencies for unforeseen conditions or allowances for specific materials if needed.
     
     
8. Terms and Conditions:
   • Outline key terms, including payment schedules, warranties, timelines, and any exclusions or clarifications. Clearly state what is and isn’t included to prevent misunderstandings later.
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9. Signatures:
   • Include spaces for both your signature and the recipient’s to formally acknowledge and agree to the bid terms. This section reinforces the formal nature of the proposal.
     
     
10. Attachments and Supporting Documents:
    • Attach any additional supporting documents, such as certifications, insurance information, references, or detailed scope of work descriptions. 

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Download a free commercial bidding template here.

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8. Submitting Your Bid

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Follow Submission Guidelines: Make sure to follow all submission instructions, including format, required documents, and deadlines. Missing even minor details can disqualify your bid.

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Include Clarifications: Clearly outline what is included and excluded in your bid. This transparency helps avoid disputes later on and sets clear expectations.

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Write a Professional Email: When submitting your bid, it's important to write a courteous and professional email. The email sets the tone for your interaction with the client and can make a good impression. Below is an example email template you can use:

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Subject: [Your Company Name] - Bid Proposal for [Project Name]

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Hi [Client’s Name],

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Attached is our bid proposal for the [Project Name] project. We’ve included a detailed breakdown of costs, timelines, and scope of work as outlined in the project documents. Please let us know if you have any questions or if further clarifications are needed.

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We’re confident that our team’s experience with similar projects, combined with our commitment to delivering quality on time and within budget, makes us a strong candidate for this job. We look forward to the opportunity to work with you.

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Thank you for your time and consideration. If you have any feedback or questions, please feel free to reach out. 

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Best regards,
[Your Signature]

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9. Financial Preparedness and Payment Terms

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Prepare for Delayed Payments: Be ready for potential 60-90 day payment delays. Ensure you have the financial capacity to float the project during this period without stressing your cash flow.

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Adjust Payment Terms: Where possible, negotiate favorable payment terms such as deposits or milestone payments. This can help improve your cash flow and reduce financial risk.

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10. Following Up After Submission

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Engage with the Estimator or Project Owner: After submitting your bid, follow up to express your continued interest. This keeps the communication lines open and can provide valuable feedback.

Give them a call and email them to solicit feedback and get updates on their timelin for selecting a contractor.

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Building Relationships Post-Bid: Use every interaction as an opportunity to build and strengthen relationships. 

Whether you win or lose the bid, maintaining a good rapport can lead to future opportunities. You don’t want to just be submitting bids, you want to make sure you are building the relationship.

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11. Best Practices for Bidding Success

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Use of Technology: Leverage bid management software and digital tools to stay organized and improve accuracy. Tools like Procore or PlanHub can save time and reduce errors, helping you track deadlines and manage bid documents effectively.

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Develop a Clear Bidding Process: Establish a standardized bidding process within your company to streamline your workflow. This should cover every step, from reviewing bid invitations to estimating costs and preparing proposals. A well-defined process ensures consistency and allows your team to work efficiently while avoiding errors.

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Understand the Scope and Ask for Clarifications: Always take the time to thoroughly review the project scope and requirements. If anything is unclear, reach out to the client or architect to clarify before submitting your bid. Asking questions shows your attention to detail and reduces the risk of scope misinterpretation, which could lead to underbidding or costly mistakes during the project. Clear communication early on also builds trust with the client.

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Compliance and Documentation: Double-check all your documentation for compliance with bid requirements. Missing paperwork can disqualify even the best bid, so review everything carefully before submission.

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Learn from Each Bid: Whether you win or lose, there’s always something to learn from every bid you submit. Review the feedback you receive to identify areas for improvement. Regularly refining your bidding strategy can help you increase your success rate over time.

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Set Realistic Budgets: Start small and test different strategies to see what works best for your business. As you gain more experience, allocate additional resources to approaches that have proven successful, and continue refining your bidding tactics.

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Track Performance Metrics: Use tools like Google Analytics or feedback from general contractors (GCs) to track how well your bids are performing. Key metrics, such as the number of bids submitted, win rate, and profitability of won projects, can provide valuable insights. Adjust your strategies based on the data to maximize bidding efficiency.

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Conclusion

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Bidding on commercial construction jobs is a skill that requires attention to detail, strategic thinking, and persistence. 

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By mastering the bidding process, understanding how to price effectively, and continuously improving your approach, you can secure more profitable contracts and grow your business. 

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Bid accurately and build strong relationships to keep your company competitive in the market.

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With these tips and strategies, you’re well on your way to bidding success in the commercial construction industry. And if you don't win the first one, keep improving and eventually you will win!

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