The bidding process is stressful for clients and contractors alike. On the client-side, decision-makers must be mindful that they do not pay a surplus beyond their needs. For the bidders, the bidding process sometimes feels one-sided. They submit their bids but never hear back as their offers disappear from project managers’ hands.
As a result, many project owners and general contractors are left wondering what they can do to level their bids. On the other hand, trying to select the most competitive bid might feel overwhelming without an apples-to-apples comparison process.
In today’s competitive construction landscape, bid leveling has never been so important. So, let’s discuss the process of bid leveling and its benefits. This article will discuss the process of bid leveling and its benefits in construction.
Table of contents:
Bid leveling is the process of organizing, comparing, and analyzing project bids to facilitate the selection of the best subcontractors for a job. It’s also used to identify discrepancies between the bids to make sure the package details and subcontractor quotes are equal for comparison.
If done correctly, the bid leveling process can save a great deal of money. Experience, attention to detail, and self-control are essential to get optimal results. Here are some of the advantages of bid leveling:
The bid leveling process allows you to break down a contractor’s bid submission and offers you a clearer picture of the necessary assistance you might need for your project.
Review the project requirements is an essential first step in bid leveling. Make sure all bids fulfill the needed scope and project delivery requirements. Also, ensure that the bids are bondable to the project. Do not consider a construction bid if it does not match project requirements, e.g., pre-cast concrete instead of reinforced concrete. .
Next, identify the similarities and differences between the bids. Different bids may have different formats, but you can recognize similar work categories. Note any areas of divergence. If you need further information, do not hesitate to contact the candidates to clarify specific costs.
The third step is looking for the necessary permits and materials. Don’t be put off by a contractor’s high prices; make sure you understand the material costs before making your decision.
Review the most recent document plans and addenda used by all bidders. Make notes on the drawings and proposals, including their approval dates. With this information, assess all estimates and select the best bid for your project.
So, in theory, what does bid leveling look like? Let’s say you have three subcontractor bid packages for commercial landscaping services. This simplified view to analyze the bidders enables you to easily compare:
| CMP Landscape | Frank & Sons | Star Landscapers | |
| Irrigation | $13,538 | $40,230 | $83,210 |
| Plantings | $101,336 | $69,600 | |
| Mulch | $4,950 | $6,880 | $15,750 |
| Soil Prep & Fine Grade | $10,240 | $12,110 | $13,372 |
| Site Furnishings | $109,110 | $111,295 | |
| Misc/Other | $8,450 | $32,090 | $14,072 |
| Total Cost | $138,514 | $200,420 | $307,299 |
While CMP Landscape is the lowest bid on paper, with bid leveling, it’s easy to compare and contrast bids by scope of work to ensure project requirements are met. For instance, if site furnishings are a requirement for your project, you may need to contact the company for further clarification on the scope gaps to inform the best decision.
Excel or similar tools are certainly one option to track bid leveling. Nonetheless, advanced bid management software can add more value and accuracy into the process. For instance, with BuildingConnected, you can add additional context to compare bids, request more information from subcontractors, all while tracking in one system. Furthermore, the tool also has advanced options for bid analytics and management to better inform the entire construction bidding process.
The process of bid leveling is a high-touch process that’s vital to a project’s success. This process is important, but it only generates a piece of the overall proposal. Other costs need to be added as well as risks need to be assessed to generate a complete proposal.
The future of bid leveling will connect all data points and utilize AI to suggest the best subcontractors for a project. It’s not only cost getting analyzed but also quality of past work, various risk factors, bonding limits and other factors that go into the selection process. However, there will always be an approval step after the technology makes its choices because of the human element of relationships and how it they could impact an overall projects success.
The bid leveling process helps a project owner and contractors choose the best bids. After the leveling process, the highest bid may be the lowest. This process helps identify the best and most competitive bids when they come in higher than expected. It also affects whether a project is completed on time and within budget.
