How to compare contractor bids

Why bids look further apart than they are

Every contractor writes a bid their own way. One lists twenty items, another gives three lump sums, a third leaves out anything they expect you to arrange yourself. Put the totals next to each other and you are comparing three different jobs.

Often the gap between two bids comes from what each one includes, not from what each one charges for the same work. Lining them up by scope is how you find out which it is.

Write your own list of lines first

Before the first bid arrives, write down the pieces of the job as you understand them: demolition, electrical, plumbing, drywall and paint, carpentry and install, permits, haul-away. It does not need to be perfect. It needs to be yours, so every bid gets measured against the same list instead of against each other.

Walk the room with the list in hand. Note what is coming out, what is moving, and what stays. If the old cabinets are coming out, somebody has to take them out and somebody has to haul them away. Those are two lines, and bids handle them in different ways.

Sort each bid onto the list

Take each bid and put its figures on your lines. Where a bid bundles several lines together, write the bundle on the line it mostly covers and make a note beside it. Where you cannot tell what a figure covers, ask the contractor to break it out. Asking for a line-by-line figure is a normal request.

When every bid sits on the same lines, you are finally comparing like with like.

Example Three labor and trade bids for a kitchen. Bid 1 comes to $23,000, Bid 2 to $23,650 and Bid 3 to $16,800. On totals alone, Bid 3 looks $6,200 lower. Lined up, Bid 3 leaves out demolition, drywall and paint, permits and haul-away: four of seven lines. Bids 1 and 2, which looked like they disagreed, are $650 apart.

Treat a missing line as a question

A blank on your sheet is the most useful thing a lineup shows. It usually means one of three things: the contractor left the work out, expects you to handle it, or folded it into another line without saying so. Each of those changes the real price of the bid.

Ask, in writing, which it is. If the work is out, it still has to be done and paid for by someone, so the low bid is only low until you add that work back. Permits are a common blank. So is haul-away, and so is patching and painting after the electrician has opened the walls. None of it goes away because a bid does not mention it.

Read the words beside the numbers

Numbers are only half a bid. Before you settle on one, read what each bid says about:

• Allowances: placeholder figures for things you have not picked yet, such as tile or fixtures. A bid with low allowances looks lower now and costs more later.
• Exclusions: the list of what the bid does not cover. Check it line by line against your own list.
• The payment schedule: how much is due as a deposit, and what has to be finished before each progress payment.
• Changes: whether a change to the job is written up and priced before the work is done.
• Timing: when the work starts and roughly how long each stage takes.

If two bids differ on any of these, write it on your sheet next to the numbers. It is part of the price.

Then look at the totals

Only once the lines match does the total mean anything. At that point a difference between two bids is a real difference in what you would pay for the same work, and you can weigh it against everything else you know: how clearly each bid explained the job, when the work can start, and how your questions were answered.

The lineup does not choose for you. It makes sure the choice is between real numbers.