Construction bidding

Bidding aims to secure the best proposal —not always the cheapest— by comparing like with like: every participant prices the same bidding documents, the same bill of quantities and the same quantities, so their prices are genuinely comparable. Each contractor builds up its bid with unit price analyses, a construction schedule and, where required, a technical proposal; the party running the process evaluates the bids and awards the contract.

The key difference from a "public tender" is one of scope and context. In everyday usage, construction bidding is the general term for competing for a project and applies to both public and private work. A public tender is the formal, regulated procedure that government agencies use to award contracts: on public projects the bidding process IS a tender —open, a restricted invitation to a limited number of firms, or a direct award— governed by public procurement law. On private projects people speak of bidding, or of an invitation to bid, without the legal formalities of the public process.

For the contractor, taking part in a bid means "pricing" or "estimating the work": it receives the bidding documents and the bill of quantities, checks the quantities against its own takeoffs, builds up its unit prices, applies overhead and profit, and submits its proposal before the deadline. Winning a poorly priced bid is the most common source of cost overruns, because the price is then locked into the contract.

Public tenders are usually published on government e-procurement portals, and state or local governments often run their own systems. On private projects, developers and construction firms typically invite three to five trusted contractors to bid without any open publication.