Receiving three contractor bids does not necessarily mean you have three comparable prices.
One proposal may include significantly more work than another. Materials may be different. Warranties may differ. One contractor may have included permits or cleanup while another has not.
For commercial property owners and managers, comparing contractor proposals based only on the total at the bottom of the page can lead to expensive surprises.
A better approach is to compare the entire scope of work.
Start by Making Sure Everyone Is Bidding the Same Project
Before comparing prices, make sure each contractor understands the same scope.
The same problem occurs with plumbing, HVAC, electrical, concrete, painting, landscaping, flooring, roofing, and nearly every other commercial trade.
Before requesting bids, provide contractors with as much consistent project information as possible.
Compare the Scope Line by Line
Instead of placing three total prices next to each other, create a basic scope comparison.
| Item | Contractor A | Contractor B | Contractor C |
|---|---|---|---|
| Demolition | Included | Included | Partial |
| Materials | Type A | Type B | Type A |
| Permit | Included | Excluded | Included |
| Cleanup | Included | Included | Not stated |
| Warranty | 2 years | 1 year | 3 years |
| Schedule | 3 weeks | 2 weeks | 4 weeks |
This often makes price differences easier to understand.
Look Carefully at Allowances
An allowance is an estimated amount included for something that has not been completely determined.
Ask what items are allowances, how the amounts were determined, what happens if actual costs exceed them, and whether contractor markup is added to the difference.
Identify Exclusions
Common exclusions may involve permits, engineering, demolition, disposal, utility work, painting, electrical connections, equipment removal, concrete repair, site restoration, and after-hours work.
If something necessary for the project is excluded, someone will eventually have to pay for it.
Understand Change Orders
A good change-order process should explain:
- What changed
- Why it changed
- How much the change costs
- Whether it affects the schedule
- Who must approve it
Avoid situations where additional work proceeds without clear authorization.
Compare Materials and Equipment
Two contractors may propose completely different products.
For HVAC, roofing, flooring, painting, electrical, and other trades, make sure you understand the materials or equipment each contractor is proposing.
Ask About Labor and Installation Standards
Ask contractors about crew experience, supervision, installation procedures, manufacturer requirements, quality-control processes, and safety procedures.
Commercial properties can add complexity because work may need to occur around customers, tenants, employees, deliveries, or other contractors.
Evaluate the Proposed Schedule
Ask when work can begin, how long it will take, whether portions of the property will be inaccessible, whether utilities need to be shut down, whether work can occur after hours, how tenants or customers will be affected, and what could cause delays.
Understand Payment Terms
Compare when payments are due, not just the total contract amount.
Make sure you understand what triggers each payment and how retainage, if any, is handled.
Compare Warranties
Ask what is covered, how long it is covered, who provides the warranty, whether materials and labor are both covered, what can void the warranty, and whether routine maintenance is required.
Verify Insurance and Qualifications
Depending on the trade and scope, you may want to verify insurance, licensing, certifications, manufacturer approvals, safety history, and similar-project experience.
Consider Communication
Pay attention to the bidding process itself.
Was the contractor responsive? Did they arrive when expected? Did they ask intelligent questions? Was the proposal understandable? Did they explain assumptions?
Be Suspicious of Large Price Differences
If two commercial contractors bid approximately $80,000 and another submits a price of $48,000, investigate the difference.
The lower price may be legitimate, but it may also indicate missing scope, different materials, incorrect quantities, misunderstood plans, missing labor, or unrealistic assumptions.
Do Not Automatically Reject the Highest Bid Either
A higher bid is not automatically better.
Your objective is not to find the cheapest contractor or the most expensive contractor.
It is to find the best value for the work actually being performed.
Create a Contractor Bid Scorecard
| Factor | Weight |
|---|---|
| Scope completeness | 25% |
| Price | 20% |
| Commercial experience | 15% |
| Schedule | 10% |
| Warranty | 10% |
| Communication | 10% |
| Qualifications | 10% |
You can adjust the percentages depending on the project.
Questions to Ask Before Awarding the Project
- Exactly what work is included?
- What is excluded?
- What materials or equipment are being used?
- Are there allowances?
- How are change orders handled?
- What is the expected schedule?
- What are the payment terms?
- What warranties are included?
- Who will supervise the project?
- What insurance and qualifications does the contractor carry?
Finding Commercial Contractors in Charlotte
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Browse Charlotte commercial general contractors and specialty trades to start building your project shortlist.