Chapter 2 of Construction Project Management: A Practical 10-Step Guide.
Construction bidding: The Start of Every Successful Project
Every construction project starts with a fundamental question: What will this cost? Whether you’re preparing a bid for a client or selecting subcontractors, procurement is the first—and arguably the most important—step in ensuring financial accuracy and project success.
Yet, this is where most projects set themselves up for failure. Estimates are rushed, vendor selections are based on incomplete information, and procurement becomes a reactive scramble rather than a structured process.
Most construction teams treat bidding as a necessary evil—just a box to check before moving on. But that mindset is exactly why projects run over budget, schedules fall apart, and profit margins shrink.
Bidding isn’t a formality. It’s risk management.
And if you don’t optimize your process, you’re setting yourself up for problems before the project even starts.
This guide is designed as a repeatable playbook—something you should review before every project to make sure you’re not making the same avoidable mistakes.
Why Bidding Right Matters (More Than You Think)
At its core, construction bidding has two objectives:
- Estimating project costs for your client bid
- If you don’t have an accurate cost breakdown, you’re guessing. And guessing leads to underbidding and lost profit or overbidding and lost contracts.
- Finding the best subcontractors and suppliers
- The cheapest bid isn’t always the best bid. You need subcontractors who deliver quality work, on schedule, at a fair price. Not just someone who looks good on paper.
Most teams focus on getting a bid out the door as fast as possible.
Instead, you should be building a competitive advantage.
The best construction firms don’t just bid. They bid smart.
Step 1: Define the Scope Before You Request Bids
Most bid requests fail before they’re even sent.
Why? Because they’re based on unclear, incomplete, or outdated information.
Think about it:
- You send out a vague RFQ (Request for Quote).
- Every subcontractor interprets it differently.
- You get wildly inconsistent bids that are impossible to compare.
The result? You either guess which bid is most accurate or spend weeks clarifying details that should have been in the RFQ from the start.
Before You Request Bids, Ask Yourself:
Have I clearly defined materials, labor, and subcontractor responsibilities?
Have I accounted for market risks (price fluctuations, material delays)?
Am I providing enough detail so every bidder is pricing the exact same scope?
If you don’t have clear answers, you’re not ready to send out RFQs.
Step 2: Identify the Right Subcontractors and Vendors
Not all bidders are created equal. The biggest mistake project managers make?
Thinking that more bids = better choices.
Reality check:
- More bids = more time wasted sorting through junk.
- More bids = more low-ball offers that look good but cost you later.
The goal isn’t to get the most bids. It’s to get the right bids.
How to Find the Right Vendors & Subcontractors
✔ Leverage past data – Who delivered good work before? Who caused the problems?
✔ Expand your network – Don’t get trapped relying on the same three vendors.
✔ Prequalify bidders – If they don’t have the capacity or experience, don’t waste time.
Pro Tip: If you send bid requests to everyone, you’re doing it wrong.
Step 3: Structure Your RFQs for Faster, More Accurate Bids
A good RFQ doesn’t just ask for a price—it guides bidders toward providing the right details in the right format so you can compare them quickly.
What Every RFQ Should Include:
- Scope of work – What exactly is being quoted?
- Timeline – Start and completion dates.
- Payment terms – Milestone-based? Monthly? Upfront deposits?
- Bid breakdown format – Do you want lump sum pricing or itemized costs?
The more structured your bid request, the easier your job becomes.
Step 4: Follow Up—Because Most Vendors Will Forget to Submit
Here’s the reality: most vendors won’t submit their bids on time.
Subcontractors are busy. Your RFQ is just another email in their inbox.
You’re losing good bids by default if you’re not following up.
Don’t just send reminder emails. Pick up the phone.
- Confirm they received the RFQ.
- Ask if they have any questions.
- Get a verbal commitment that they’ll submit a bid.
This one small step increases your response rate dramatically.
Step 5: Compare Bids Properly (And Avoid the “Cheapest Wins” Trap)
Once the bids are in, the real work begins.
Most teams default to the lowest bid.
Bad idea.
A good bid comparison sheet helps you:
- Normalize bid formats – Every subcontractor structures pricing differently. Break it down so you’re comparing apples to apples.
- Spot missing costs – Some vendors deliberately leave out costs to look cheaper.
- Assess risk – What’s the subcontractor’s track record? Cheap doesn’t mean reliable.
Pro Tip: The lowest bid often leads to the highest costs later. If a number looks too good to be true, it probably is.
Step 6: Negotiate & Lock In the Best Partners
Now that you have your shortlist of strong candidates, it’s time to negotiate.
- Lock-in material pricing – If the market is volatile, get guaranteed rates.
- Clarify penalties – What happens if a subcontractor delays the job?
- Discuss change orders – How will scope changes be handled?
Once your contracts are signed, don’t forget the other bidders.
Send a Rejection Letter to Unsuccessful Bidders
Most project managers ignore this step—but they shouldn’t.
Why?
- It maintains good relationships with subcontractors for future projects.
- It shows professionalism and transparency.
- It helps vendors understand why they weren’t selected—which can lead to better bids next time.
Pro Tip: Keep it short, polite, and professional. You don’t need to justify your decision, but you can offer brief feedback if it’s helpful.
Example:
“Thank you for participating in our recent bidding process. While we’ve selected another contractor for this project, we appreciate your effort and hope to collaborate on future opportunities.”
Ignoring bidders after they’ve invested time and effort in submitting a proposal damages your reputation. A simple email keeps the door open for future work.
Key Takeaways: What to Review Before Every New Project
- Your bids are only as accurate as the information you provide.
- A strong bidding process saves money and headaches down the road.
- The lowest bid is rarely the best bid.
- Following up with vendors increases response rates.
- Comparing bids properly is the difference between profit and disaster.
This is a repeatable process.
Refine it, use it, and avoid costly mistakes before your next project.
About the Author
With over 20 years in construction project management, the author has led multi-million-dollar projects across residential, commercial, and infrastructure sectors. His experience in bidding, procurement, and contractor selection ensures practical, real-world advice for project managers who want to optimize costs and execution.
Explore the Next Chapter: Project review
The art of dissecting plans to find risks before they become problems. Read more
Go to the Construction Project Management: A Practical 10-Step Guide.