Everyone wants the best deal, the greatest bang for their buck, the top value for their money…whatever you call it, the way to get it when doing construction or remodeling is to evaluate your bids against each other. But because companies frequently offer their bids in different formats and have different systems for determining cost estimates, it may be challenging to really understand the values of each one in order to compare them apples-to-apples. Here, we offer some important tips for comparing bids in order to attain the best value:
1) Compare a minimum of 3 different contractor bids
Having only two bidders isn’t enough to offer significant confidence in the bids (though too many can be difficult to manage). Also, three gives you the minimum needed to see any discrepancies across bids. You can therefore go back to each contractor and make sure that no detail is left unturned and ensure you’re truly getting the apples-to-apples bids that you’re looking for.
2) The lowest bid isn’t necessarily the best bid.
As we’ve previously mentioned, it’s not always best to automatically accept the lowest bid. If a price is too good to be true, it probably is. But it doesn’t hurt to ask pointed questions to make sure. If one bid has an item that is significantly lower than the other bidders, ask them why they can do it so much cheaper than the rest or compare the scope of work on that item in relation to the other bidders. If they have a good answer, you can rest assured that they won’t have to revise the budget up once construction starts.
3) Fees may vary
Fees associated with a bid – from administrative expenses and company overhead to permits and insurance – can fluctuate from company to company and may not be specifically identified in a contractor’s bid. Keep this in mind when comparing bids to identify this variation, and again, don’t necessarily assume the lowest one is the best one.
4) Use your instincts
Listen to your gut! Ask yourself: Do I trust this contractor? Can you and the contractor communicate effectively? Does the contractor listen to your concerns and answer your questions sufficiently and timely? Answering these questions for yourself is an important part of weighing who to choose for your construction project.
5) Ask for references
A contractor should be able to provide their prospective customers with a reference list of past customers for whom they’ve done similar work. Getting reassurance about the contractor’s work will help inform your decision about which bid to go with.
So when comparing bids, keep in mind that the greatest value is typically achieved when you know exactly what you’ll receive from a contractor that has a solid reputation. This reputation should be founded on years of experience with the type of project you are asking them to work on.
Have any questions about a bid for one of your projects? Drop us a line; we’d be more than happy to provide you with a consultation.
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