Evaluate Subcontractor Pricing
Your subcontractor pricing evaluation is a critical part of an accurate cost estimate. Any miscalculations have the power to significantly skew your totals.
It is typically best to use a prequalification (prequal) process to assess with whom you want to work. A prequal gives you insight into your potential subcontractors’ experience levels and previous projects.
Utilize Bidding Software
This game-changing technology usually ranges from $60 to $250, depending on the program’s capabilities.
Construction bid software has proven invaluable in the relatively short time it has been a part of the industry. General contractors use these specialized programs to help estimate the cost of a new project.
Bidding software has a variety of benefits, the most important of which is job costing automation. You can determine a given job’s definition within your database and alter it to your specialized criteria. When you need an estimation of the cost, all you have to do is select the job and the software does the rest. These machine-run computations are far more accurate than human arithmetic.
Utilizing bidding software also enables the collection of valuable long-term data. For example, tracking the difference between your initial bid and the actual cost will prove helpful for future projects.
Check Labor Costs
Calculating accurate labor costs is another crucial part of a winning construction bid. Labor costs are equal to the number of man-hours multiplied by the construction workers’ hourly wages.
Here are some aspects of the labor cost that must be taken into consideration:
- Your workers’ efficiency and experience
- Potential absences, injuries, and employee turnover
- Wage rates for your state and county
Identify Risks and Seek Clarification
When it comes to a construction bid, crossing your T’s and dotting your I’s is of the utmost importance.
Identify and analyze any potential risks so that you are prepared if they actually occur.
Some construction projects have deadlines for seeking clarification that differ from the bid deadline itself. For example, you may need to ask whether building material substitutions are allowed in the bid. It is imperative that you seek such clarifications in a timely manner.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.