If only evaluating the cost of vendors for your construction project were as easy as doing a simple apples-to-apples comparison…
Unfortunately, price comparison can be a frustrating exercise for project owners because different vendors choose to price out their bids using different methods. While one bid may seem lower at first glance, after taking a closer look at the details, the true cost of the project may be much higher.
The importance of accurate cost comparisons
Estimating the true cost of your project is essential for budget planning and determining your project’s scope and feasibility. The more accurate you can be when comparing costs and bids, the more successful your project will be in terms of securing quality vendors and staying true to your budget and timeline goals.
Plugging in vendor costs using Excel
While most contractors use construction software to calculate project budgets and create construction schedules, you can also use Microsoft Excel to compute and compare vendor costs.
To do so, open a new spreadsheet in Excel. Then:
- Label the columns across the top. The first column (A) should list each of the items that needs to be priced out and compared.
- Column B should list the corresponding prices quoted by Vendor 1; column C would do the same for Vendor 2; and so on.
- If the vendor includes a price for a given item in your list, input the given cost estimate in the adjacent cell.
After you’ve input all of the data you’ve gathered from the vendors, you might see that Vendor 1 includes a price for everything on your list whereas Vendor 2 does not. However, included with Vendor 2’s estimate is additional pricing information in order to complete the job as proposed. They may say that while their bid does not include everything on your list, they can still do the project for an additional estimated price of “X.”
Then you need to go back and plug in this additional information to evaluate and compare the true cost of the job.
When all is said and done both estimates may be the same, or you might discover that one bid is $10 or $20k more than the other after inputting all of the available information.
At Seacoast Construction, we understand how frustrating it can be to compare costs and project estimates. For help comparing bids or understanding why they vary so much, come talk to us. We can help you understand differences among project estimates and what to be wary of when you get a low-ball bid. Get in touch with us to learn more.
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