The contractors you choose can (quite literally) make or break your projects. That's why it's extremely important to develop clear, objective construction bid evaluation criteria to help you select the best fit for your needs.
In this guide, we'll walk you through the key things you need to know about construction bid evaluation, including common evaluation methods, the criteria to use when going through bids, and how to conduct thorough bid reviews.
Table of contents:
Conducted at the early stages of project planning, bid evaluation sets the foundation for project success by ensuring the right contractors are selected. It’s also essential for ensuring there is proper coverage on the project, without gaps in the scope or double coverage.
Done right, bid evaluation enables you to mitigate risks, control construction costs, and secure high-quality work. On the flip side, poor evaluation can lead to risks and issues like:
The bid analysis process involves evaluating bids and selecting a contractor that aligns with project needs, budgets, and objectives. Here are some of the bid evaluation techniques commonly used by construction owners and general contractors:
What exactly should you evaluate during the bid evaluation process? While your bid evaluation checklist may vary from one project to the next, focusing on these essential factors will put the right contractors on your radar.
Price is a key consideration, but it shouldn't stand alone. Evaluate whether the bid aligns with your budget without compromising quality.
Unless it's mandated, you want to avoid defaulting to the lowest bidder. Instead, focus on finding the best value for your investment. Be sure to factor in long-term costs like maintenance or potential rework.
Does the contractor have relevant experience in similar projects? Look for qualifications that demonstrate expertise in your specific project type or industry. A proven track record reduces risks and ensures a smoother construction process from start to finish.
For instance, if you're building a healthcare facility, prioritize contractors who have completed similar projects, as they'll be familiar with specific requirements like systems for sterile environments or compliance with medical construction codes.
Safety should never be overlooked. A strong safety record demonstrates the contractor's commitment to worker well-being and regulatory compliance. When analyzing bids, make it a point to evaluate each contractor's safety training programs, accident history, and protocol.
Let their track record speak for itself—contractors with comprehensive safety measures and low incident rates not only protect workers but also help you avoid delays, liabilities, and reputational damage.
Time is money in construction. When evaluating a bid, review the contractor's proposed timeline to ensure it aligns with your project deadlines. Look for realistic schedules backed by detailed planning to avoid costly delays and interruptions.
Let's say you're working on a retail space renovation with a tight grand opening date. A well-prepared contractor might include a phased timeline showing specific milestones, along with buffers for potential delays. This level of detail demonstrates their preparedness and reliability.
One of the best ways to evaluate quality is to determine how a contractor meets the necessary construction standards throughout the project. This could include reviewing their quality assurance programs, materials sourcing, and inspection routines. Be sure to ask for documentation of their processes and examples of past projects where they successfully maintained high standards.
For instance, a contractor might use third-party inspections at critical milestones to verify structural integrity and ensure compliance with building codes.
A contractor's financial health directly impacts their ability to complete your project. The last thing you want is for a construction company to run into financial trouble while working on your build.
So, pay close attention to their financials when evaluating a contractor's bid. Assess their credit history, bonding capacity, and financial statements to ensure they have the resources to deliver on their commitments without delays or disruptions.
Sustainability is becoming increasingly important in construction, with regulators, consumers, and industry leaders placing greater emphasis on environmental responsibility.
With that in mind, look for contractors who prioritize eco-friendly practices, energy-efficient materials, and waste reduction. Choosing someone with a green approach can also align your project with broader environmental goals and industry trends.
A comprehensive bid review involves several key steps: checking for accuracy and completeness, conducting an initial screening to eliminate unqualified bids, performing a detailed analysis of costs, and conducting reference checks to verify past performance. Bid review teams can also run into challenges like unclear proposals or bid discrepancies. To resolve these issues, establish clear evaluation criteria upfront and keep communication lines open with bidders. That way, everyone stays on the same page.
Effective bid evaluation is one of the first steps you should take to reduce project risks. With that, having well-defined bid evaluation criteria helps make the selection process much easier. When you have clear bid evaluation checklist, you're able to thoroughly review bid proposals and make sure the contractor you consider meets your standards.
When evaluating proposals, it's always best to keep in mind that you're not just choosing a contractor—you're laying the groundwork for a high-quality bid.
Want to learn more about how you can level up your bid management workflows? With BuildingConnected Pro, you can manage the bidding process and find qualified subcontractors on the most up-to-date network of construction professionals.