How owners should compare construction bids before choosing a contractor

Owners regularly receive three or four proposals and put them in a column next to each other. That comparison is almost meaningless until the bids have been leveled, because each one prices a slightly different job.

Ten comparisons that matter

1. 01Basis of bid: the exact drawing set, revision date and every addendum acknowledged. Different sets, different job.
2. 02Exclusions and clarifications: read them twice and add each one back into the total with a real number.
3. 03Allowances: normalise them. One bidder's low allowance is a future change order rather than a saving.
4. 04Alternates and value-engineering items: separate them from base scope so the base comparison stays clean.
5. 05General conditions and general requirements: compare the staffing, duration, and site cost line by line.
6. 06Fee and overhead: state fee separately from work, and check how fee applies to changes and to allowance spend.
7. 07Contingency: whose it is, what releases it, and what happens to what is unspent.
8. 08Schedule: compare logic, milestones, long-lead procurement and inclement-weather assumptions, not just the end date.
9. 09Subcontractor coverage: how many trades are actually bid, and which are still carried as an estimate.
10. 10Terms: contract form, payment terms, retainage, insurance limits, bonding capacity and warranty.

Where hidden cost usually sits

• Sitework, undercut and unsuitable-soil handling priced as an allowance.
• Offsite utility work, tap and impact fees assumed to be the owner's cost.
• Testing, special inspection and commissioning left out.
• Permit fees and third-party review excluded.
• Escalation on long-lead equipment with no stated basis or window.
• Winter conditions, dewatering and temporary facilities.
• Overtime or acceleration presumed to meet the owner's date.

Questions that reveal understanding

Ask each bidder for the three largest risks in the project, and how they priced them. Ask which trade they are least confident in and why. Ask what they would change about the drawings. A bidder who has genuinely studied the job answers specifically; one who has not answers in generalities.

Illustration only, not a Threefold engagement: two bids sit a little over five per cent apart. The lower one excludes special inspection and carries half the earthwork allowance. Leveled, it is the higher bid — and the one more likely to arrive as change orders after award.

Document the award

Write a short award recommendation recording the leveled numbers, the adjustments made, the schedule comparison, and why the selected bidder was chosen. This protects the decision with partners and lenders, and it gives the eventual change-order conversation a factual starting point.

One boundary: bid review and owner-side oversight are advisory. Contracting, licensed design, inspection, code interpretation and certification remain the responsibility of the licensed parties performing them, and contract terms should be reviewed by your counsel.