Explore the intricacies of the client bid form, emphasizing the importance of correctly filling out and understanding each item to avoid potential pitfalls. Learn how to handle project durations, alternates and inclusions/exclusions in the bidding process, ensuring a mutually beneficial agreement between the client and the contractor.
Key Insights
- The client bid form requires careful attention when filling out, with important sections such as the project name, bid date, project start date, proposals, contact details, and project durations.
- Project durations can be subjective and may be determined by the client or the contractor. However, a competitor who can complete the job sooner at a similar price could be more attractive to the client.
- Alternates are standalone costs that could be added or not to the project. These should be either accepted or declined at the beginning of the project, not in the middle or the end. Contractors also need to clearly state their inclusions and exclusions in the bid form or a separate sheet to avoid confusion.
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Now let’s take a look at our bid form handout. This particular one is provided by the client, so on top it says the client-provided bid form. Typically, when you get a form from a client to fill out, all you’re doing is adding the dollar amounts.
If they have additional areas for expansion, you could go ahead and provide that. But let’s start at the top and go through each item and make it very clear as to what should be included and what should be left out. Project name would be VDCI Music and Guest Room Edition.
As you saw in the drawings, there’s an existing structure, so this is an addition of the Music and Guest Room, that new wing that extends out off the side of the home. We have a bid date, Wednesday, August 14th, and we have a time. Important to also include whether or not it’s Pacific, Central, or Eastern, whatever the time zone may be, because often the clients are not in the same time zone as yourself.
If it bids at 2 p.m., make sure that it’s 2 p.m. Your time and not necessarily 2 p.m. On the East Coast. Project start date. This could be owner-defined or it could also be a start date that you think that you can get this job started on.
Typically, this start date would be provided by the client. Send proposals to. This is important to make sure the proposals are sent; in this particular case, it’s via email.
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Proposals are no longer sent via mail; they’re just sent by email. So make sure that you send your documentation or your bid forms to an email address. And also make sure that you’re sending a PDF of the estimate unless required otherwise.
What I mean by that is that don’t send a live spreadsheet to a client with your bid. If it’s not required, don’t give it to them. Send them exactly what they’re asking for in the bid form.
Point of contact. In this case, we have a name here. We have a phone number in case you need to contact anyone.
And then the project durations. Now these are established by your estimate. In this particular case, it’s six months.
It’s not uncommon to actually have a client who says the project can start on a certain date and must be completed by a certain date. That’s a little bit different from the six months that we identify here. It could still be six months, but it could technically be an eight-month project that the client is asking for you to get done in six months.
So, you’ve got to be very clear about what you’re pursuing with your pricing, what the true schedule is. And typically what I do in a case like this is I establish my own durations for the project, what I think it’s going to take to build it. Now if it’s going to be done in six months, now I know where I need to whittle things down and figure out how to get it done in six months and how much overtime is going to be required.
So just understand that project durations can be driven by the client, can be driven by yourself as a contractor. But also keep in mind that if you establish it’s an eight-month project and your competitor on this job can have almost the same price, except they can get it done a month sooner, that could look much more favorable to the client. The base bid amount establishes what the actual hard cost and markup are, without any add-ons or exceptions that are noted below.
In this particular case, the bond amount is broken out separately. So you have your base bid amount, which is the total cost of the estimate. The bond amount, which is broken out separately, that the owner probably wants to see as a separate line item.
Also, notice that we have a couple of alternates. Now keep in mind that alternates have to be standalone pricing. You certainly won’t get the alternate without the project, but you will get the project, and if the alternate is accepted, that will then be added to the contract amount.
It’s not uncommon for the client to want to identify what the actual base bid amount is going to be and what the cost of construction is going to be, before they go ahead and say, I’ll accept alternates one and two. If the project’s over budget, they might not be able to afford adding alternates one and two to the project. Or they might decide to do that at a later date.
So, in this particular case, you have alternate one, provide and install a rooftop HVAC unit for the noted amount if the client decides to go ahead with it. Alternate number two is a 40-gallon water heater, done the same way. These are standalone costs.
They could be added to or not added to the project. But keep in mind that they should be either accepted or rejected at the beginning of the project. You can’t have a client come back to you towards the middle or end of the project and say, I want to go ahead and add that at that cost.
The cost could be considerably different by the time you’re that far into the project itself. You can see that I have created a list of any inclusions, exclusions, and assumptions if the bid form allows you to provide that information. If there’s very good documentation on the project, it’s very clear the client may not favor inclusions or exclusions.
They might just say it’s per plans and specs, period. But if you’re talking to your contractor, you have a good relationship with them, it’s best to identify what you’re including and excluding wherever you can inside that bid form or even as a separate sheet. Very often, some of the inclusions are just further validating or verifying anything that might not be clearly identified in the project.
So you’re just letting them know that you’re including it, that you do have it. So in the inclusions, you would list things that are not very clear or perhaps may be questionable whether or not they’re part of the bid or not. In this particular case, you can see I have listed four items and that’s access doors under the guest room that perhaps weren’t clearly identified.
But I’m saying that’s included in ultimate number two. So that price is actually already picked up. New electrical sub-panel may not have been identified, but I’m letting it be known that we’re going to add a new one and not attach to the existing one inside the home.
The structural plans or addendums one and two dated, whatever the date may be on that. And then also architectural plans and addendums one and two and so on with the date on that. So you’re helping to further validate what documents that you’re working on to make sure that everyone’s on the same page.
Let’s identify some exclusions. Permits and fees. This may be something that could be picked up by the contractor or the owner but it’s unclear.
