A commercial (property) construction proposal is the standard formal response to an ITB (invitation to bid) or RFP (request for proposal) by contractors seeking to enter into a contract with a client. The type of bid proposal required will sometimes depend upon the client’s needs; however, a well-prepared construction company will keep one or more templates on hand to remain competitive.
Types of Commercial (Property) Construction Proposals (7)
- Construction Manager At Risk Proposal – The construction manager commits to deliver the project within a guaranteed maximum price, providing both consultation services during the design phase and construction services, thus effectively bearing the risk of cost overruns.
- Cost Plus Fee Bid – A proposal where the contractor is reimbursed for the actual costs, direct and indirect, incurred in the performance of the work, plus a fixed or percentage-based fee for profit and overhead.
- Design-Bid-Build Proposal – Proposals for projects divided into separate stages (first design, then bidding, and finally construction) where each phase is typically handled by different entities.
- Design Build Proposal – Proposals where the design-build team works under a single contract with the project owner, providing design and construction services and streamlining the project delivery process.
- Guaranteed Maximum Price Bid – This proposal features a set price cap for the project, but the contractor agrees to bear any additional costs that exceed this cap, thus ensuring that the project does not go over budget.
- Lump Sum Bid – Proposals to complete a project for a predetermined, fixed amount, inclusive of all costs associated with the project.
- Unit Price Bid – Proposals with a fixed price per unit of work, making the total cost dependent on the number of units required for project completion.
What Should Be Included (14 Items) |
1. Cover Page
Identify the construction company bidding on the site project in the heading. Display each company’s information if more than one company is submitting this proposal.
- Company Name And Address
- Company Phone And Fax Number
- Company Website And Email Address
- Project Title, Client Name, Supporting Design
- (Optional) Project Summary
2. Project Summary
A summary of the commercial construction project’s goals, scope, and costs can be included on the cover page so that the client can have a brief overview of the proposal. Pitch the services, experience, and other selling points of the construction company accordingly.
- Project Goal, Project Title, Location
- Scope Of Work, Mission Statement
- Qualifications, Expertise
- Estimated Total, Incentives
3. Introduction
Directly address the client in a friendly but professional greeting. A discussion of the construction company’s qualifications and the project is required in the introduction, as well as incentives to continue reading.
- Objectives, Mission
- History, Qualifications
- Experience, Professionalism
- Call To Action
4. Project Scope
The work required by the construction project must be described in detail. Use the data gathered from the site and the project to furnish a line-by-line report of every action needed for the construction project. Ideally, this will read like a checklist of tasks that the construction company will complete.
- Materials, Labor, Subcontractors, On-Site Management
- Equipment, Specific Task List, Logistics, Scheduling
- Milestone Objectives, Permits, Access, Coordination
- Testing, Inspection, Approval, Communication
5. Existing Conditions
Review the site data gathered from the bid walk and other sources (i.e., media and reports furnished by the project manager). Then, provide a detailed description of the site’s physical environment, including every factor that would interfere with the construction needed to complete this job.
- Location, Zone
- Site Conditions, Challenges, Opportunities
- Equipment Requirements, Preparation Requirements
- Risk Assessment, Logistics, Contingencies
6. Materials
Every piece of equipment or supply (i.e., wood, CAT vehicles) the construction company shall use for this project must be documented. Generally, clients will wish to see the number of items with the unit cost, so this report may often take the form of a spreadsheet.
- Supply or Material, Smart Building Technologies
- Unit Cost, ADA Compliant Building Materials
- Estimated Number of Units Needed, Fire Resistant Materials
- Cost-Effective Materials, Sustainability
- Flooring Options, Roofing Systems
7. Labor
Define the schedule of the construction company and company subcontractors, as well as all other personnel associated with the bidding company on this project. It should be mentioned that some bids specifically require a record of the expected hourly or daily rate.
- Date of Service, Licensed Construction Workers
- Service Providers, Subcontractors, 3rd Parties
- Service Description, On-Site Supervision,
- Hourly/Daily Cost, Collaborative Team, Safety And Health
8. Estimate
Calculate the projected costs of materials and labor as well as any permit or certificate fees. If markups remain unaccounted for above, then include them in the estimated cost.
- Total Estimated Price, Itemized Costs
- 3rd Party Expenses, Vendors, Producers, Distributors
- Miscellaneous Expenses, Permit Application Fees
- Contingency Funding, Risk Managment, Insurance
9. Contingency Planning
Unanticipated events, such as inflation or a transportation crisis, can have costly repercussions on a construction company’s work on a project but can be mitigated by applying a contingency fee, should they occur. Review all the available project data, then set an appropriate contingency fee (usually five to ten percent of the final estimated cost).
- Timeline Assumptions, Dependencies, Calendar Adjustments
- Risk Assessment, Risk Identification, Risk Management
- Contingency Funds, Budget Risks, Insurance, Mitigation Team
- Natural Disasters, Liability, Contingency Planning
10. Relevant Parties
List the names of the professionals (i.e., union members and subcontractors) that the construction company will provide for the project with their credentials and contact information. Furthermore, document the purpose or reason each one is involved in the project.
- Professional Name
- License/Certificate Number
- Professional Address
- Professional Phone Number
11. Documentation
The construction company will need permission from the local, state, and federal governments in order to work on the site. Therefore, prove that all such requirements are satisfied by attaching each one (i.e., permits, certificates, insurance policies, union agreements).
- Permit, Licenses, Certificates
- Issuing Entities
- Agreements, Contracts, Issuer
- Date, Expirations
12. Project Team
Produce a directory of the project team roster by reporting each team member’s name, contact information, and, especially, their qualifications. In addition, document the availability of each team member with their preferred method of contact.
- Project Team Member Name
- Project Team Member Title
- Contact Information, Availability
- Experience, Expertise
13. Payment Terms And Conditions
Document the conditions and schedule for payment as well as the payment schedule. Also, present supporting relevant information such as payment plan options and the company’s late payment policies.
- Conditions of Payment, Payment Options
- Payment Amount/Percentage
- Due Date, Policies
- Payment Schedule, Milestone Payments
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