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Construction is something you may have to have done to your home or business in the future. A construction company looks for opportunities to bid on projects, such as the one you want to undertake. Success is dependent on providing the bidders all of the necessary information you can, so they bid accordingly and with the knowledge of what you wish to have done. Fixed-price bidding is one way to keep your costs down.

Benefits

Bidding companies will compete for your project. There are a couple of main benefits to this strategy.

• You can compare prices.
• Contractors will be qualified.
• You can get a better idea of scheduling.

Once you give the bidding companies a bid package, the companies will be able to give you an idea of cost, time, and limitations. Each company will prepare a bid for the project, estimating the labor, time, cost, and overall completion date of the project. The qualified contractors that bid will also allow you to look into their companies. When you choose, you should be able to tell the important information about each company, including their strengths, weaknesses, and projects they have completed in their portfolios.

Site visits are a part of this process, which allow the contractors time to evaluate your space. This helps each potential bidder determine any potential problems you may have at the site. This helps determine the ultimate completion time, and if your schedule is appropriate.

At the time of bidding, you’ll be able to see if a contractor has provided everything you asked for. If not, you can reject the bid. This way, you’ll be able to tell which contractors work best with you and are most responsive.

Pitfalls

Contractors depend on construction bidding to receive a fixed price that they can work with. However, there are a few downsides to fixed prices.

• Construction companies may have change orders.
• Lower quality.
• Longer construction times.
• Extended costs.

Bidding can result in issues such as change orders. The presence of a change order is bad for a construction company. This means they will have to change something they’ve done, and will lose a portion of their expected profit. In response, you may receive lover quality work, as the company will need to make up money through faster work or lower quality products. The costs that could come out of this are exponential, as you may want to pay more to receive what you had expected from the beginning. This will cost you more in the end and will take longer to construct, as this will also result in more change orders.

Pricing

Pricing for construction bidding is highly dependent on the job a company is completing. For example, each process starts with a construction estimate that is taken from blue prints. From there, a bill of quantities, which lists all materials and their costs, will be created. Construction workers averaged a pay of $21.87 an hour in 2008, according to Celebrity Networth. To figure out the cost to you, you’ll need to figure out the number of workers, their hourly pay, and multiply it together. A manager, on average, makes around $40.00 an hour. This does not include costs such as overtime, or the pricing of equipment or materials.

In fixed-price bids, you may not need to worry about hourly pay, which can help you keep your costs down. If the bidder buys the contract for $3,000, you should be expecting that as a limit. However, if extra items come up, you may be expected to cover extra expenses.

Conclusion

In conclusion, construction bidding is one way to get a project done on a fixed price. Government agencies will bid on your project, giving you the information and expertise you’ll need to have the work done right. With access to information such as the time it will take, the costs of materials, the number of workers being provided, the hours workers will be at the site, information on the site and possible problems, dates and shipping information, and more, you’ll likely be able to plan your project accordingly.

Unfortunately, the downsides do exist, and projects can run over cost, even when a fixed price has been established. Work quality can suffer if the money isn’t there to support the construction needs. Underbidding a project can lead to a number of issues not being resolved, with contractors willing to cut corners in order not to lose their potential profit. Change orders can be frequent in these cases, leading to more money and more time expenses.

Pricing can vary. Depending on your location and the number of bids you receive from qualified agencies, you could end up paying more than expected, or less. Per hour rates may be cheaper than a fixed price in some instances, with contractors making between $20.00 and $40.00 per hour on average.

Overall, you’ll need to make sure you discuss and provide as much information as possible to your construction bidders, so that you know you’ll have a proper and complete job accomplished.