General Steps in the Colorado Construction Bidding Process

If you’re a first-time client in the industrial construction or any other construction project space, you may have heard the term “bid” used regularly — but may not understand what it actually means. The bidding process is an important one for any major construction project, and it pays for clients to be aware of what it entails when they enter into any such project.

At Redi, project bids are a common area we deal with regularly when providing industrial construction services to clients throughout Colorado. For any of our clients just learning about this process for the first time, how will it typically go and what do you need to know about it? Here are the simple steps that are usually followed for major construction bidding needs.

Client Requests Bids from General Contractors

During the earliest stages of a given project, once a given project owner (or sometimes an architect they’ve hired) approves a project and its funding, they’ll put out a request for bids to general contractors. The project owner will develop what’s called a “request for qualifications” (RFQ) or “request for proposal” (RFP), which is essentially a document that outlines the basics of the project and what the project owner is looking for from contractors.

In some cases, this document will only be sent to select general contractors that the project owner is already familiar with and trusts to provide a good bid. In other cases, this document will be sent to any and all contractors that feel they’re qualified for the job.

Once a general contractor receives an RFQ or RFP, they’ll then have some time — usually around two weeks — to put together their bid for the project in question.

General Contractors Request Subcontractor Bids

Once a general contractor makes the decision to bid on a given project, they will then reach out to various subcontractors in order to get bids for the specific work that needs to be done. For example, if a project calls for electrical work, the general contractor would reach out to Colorado-based electrical subcontractors to provide them with bids for the work in question.

These subcontractor bids are typically due back to the general contractor within a week’s time, though this can vary for some projects. From there, the general contractor can then put together their final bid for the project, which takes into account not only their own company’s overhead costs but also the costs of all subcontractors they plan to use on the project.

Subcontractors and Clarifications

During this process, there may sometimes be a need for subcontractors to reach out to the project owner for clarification on certain aspects of the work that needs to be done. For example, if an RFP is unclear on whether a given portion of work needs to be completed by hand or if machinery can be used, a subcontractor may need to ask for clarification in order to provide an accurate bid.

Project owners will typically respond to such requests for clarification within a day or two, which gives the subcontractor enough time to make any necessary adjustments to their bid and get it back to the general contractor before the deadline.

Bid Day

As bid day approaches, or sometimes even on the day itself, subcontractors will send their bids back to the general contractors who then compile all of the bids and submit them to the project owner. From here, the general contractor will both evaluate the bids and ask any required questions of the subcontractors in question, getting a full picture of each bid.

Based on the criteria the general contractor and project owner have set, the general contractor will make a decision on which subcontractor to use for each portion of work. This decision is typically made within a day or two after all bids are submitted and reviewed, and it’s at this point that subcontractors will be notified if their bid has been accepted or not.

General Contractor Final Bids

Once general contractors have gone through the process of requesting and reviewing bids from subcontractors, they can then put together their final bid for the project. This final bid includes not only the general contractor’s overhead costs but also the costs of all subcontractors that will be used on the project.

This final bid is submitted to the project owner, at which point all interested parties will present their bids and the project owner can make a decision on which contractor to use for the job.

Owner Makes Selection

Finally, once all bids have been submitted and reviewed, the project owner will make a decision on which contractor to use for the job. This decision is typically made within a day or two of all bids being submitted, and it’s at this point that the winning contractor will be notified.

Contract Negotiation

It’s important to realize that the bidding process has not ended entirely at this point. Once the project owner has selected a contractor, there will still need to be some negotiation in order to finalize the details of the contract. This process typically takes a week or two, and it’s during this time that the finer details of the project are worked out between the contractor and owner.

Work Begins

Once all negotiation is complete and the contract is finalized, work can finally begin on the project. This process typically takes anywhere from a few weeks to several months, depending on the size and scope of the project in question.

As you can see, the construction bidding process is a complex one that involves many different steps. However, by understanding these steps, you can be better prepared for your next construction project.

For more on this, or to learn about any of our industrial construction, cleanup and related services to Colorado clients, speak to our team at Redi today.