How Does Construction Bidding Work?

Construction bidding refers to the process of a contractor or subcontractor submitting a bid or proposal in the hopes of being hired for a construction project.

The bidding process occurs long before a construction project can begin. It must be completed before anybody is hired and contracts are signed.

Construction companies use the bidding process to determine which contractors are the best for the construction project. Oftentimes, it is also used to find the right subcontractors for the job too.

There are several steps to the construction bidding process and there may be several team members working together at once to find the right contractors. Each stage of the process must be completed effectively to ensure the best bid is identified.

Using Construction Bidding Software

Many companies choose to use a construction bidding software to streamline the process of accepting multiple bids and selecting a winning bidder. This type of software enables bid managers to monitor changes in bids and track the bidding process at every step.

It makes receiving and evaluating bids quick and simple, which can speed up the process. The quicker the best bid is chosen, the quicker the construction project can begin.

Construction bidding software is sometimes referred to as bid management software. It automated and streamlined the process of bid submission and selection.

Through bid management software, contractors can propose their terms and conditions for a construction project for bid managers to view. The software also tracks and monitors every step of the process, providing alerts and notifications to everybody involved.

Software increases professionalism and accuracy. Bid managers and contractors can stay informed of the latest updates in the bidding process in real-time.

If there is something that they need to complete, the software will notify them immediately. The software speeds up the bidding process, prevents delays, and increases accountability.

The Stages of the Construction Bidding Process

Although every construction project is unique, the bidding process will always follow the same basic steps. 

  • Bid Solicitation or Request for Tender – the first stage in the construction bidding process involves the submission of bids from several contractors. These bids will be submitted through an online system that the company owner or bid manager can access. Each bidder will submit the proposed terms and costs for the project.
  • Subcontracting – if necessary, contractors will accept bids from various subcontractors using the same bid solicitation method as above. This step might sometimes occur later on in the bidding process.
  • Winning Bid Selection – The company owner or bid manager will review each of the submitted bids to select a single winner. The winning bid will be the contractor that is most suitable for the project. The unsuccessful bidders will also be informed of the outcome.
  • Contract Signing – the bid manager will liaise with the winning bidder to determine the terms and conditions of the contract. Once the terms have been confirmed, contracts will be created and signed by both parties.
  • Project Completion – when the contracts are signed, the construction project can begin.