Getting multiple commercial construction bids is smart. But comparing them accurately is where it gets tricky. Choosing the wrong bid can cost you far more than the money you thought you were saving, so let’s go through some tips to help you find the best one.
Why Commercial Construction Bids Can Be Hard to Compare
Even when two contractors bid on the same project, their proposals can look completely different. That’s because bids vary based on the following:
Different Scopes of Work
Not every contractor bids the same scope. One proposal may include demolition and site cleanup, while another does not, making a lower number look more attractive than it actually is.
Different Material Assumptions
Contractors may substitute materials or specify different product grades to lower their price. Without a clear material schedule, you may not be getting the same quality across commercial construction bids.
Different Subcontractor Pricing
Each general contractor works with their own network of subcontractors, and pricing can vary significantly between them. A lower bid may reflect cheaper subcontractor labor or less experienced trade partners.
Different Schedules
A faster timeline may come at a premium, while a longer schedule could signal inefficiency or a lack of resources. Understanding each contractor’s projected timeline is essential to an accurate comparison.
Different Exclusions
Exclusions are where bids can diverge dramatically. A contractor may leave out key elements such as permits, inspections, or equipment to make their number appear more competitive.
Different Allowances
Allowances are placeholder amounts for items that haven’t been fully specified yet. A low allowance can artificially deflate a commercial construction bid, leading to costly change orders down the line.
Different Levels of Detail
A detailed, itemized bid signals transparency and experience. A vague proposal can make it difficult to understand what is and isn’t included, increasing your financial risk.
Different Approaches to Risk
Some contractors price risk conservatively, building contingencies into their commercial construction bids. Others underprice to win the job and recover costs through change orders. Knowing how each contractor handles uncertainty matters.
Start by Confirming Every Bid Covers the Same Scope
Before comparing numbers, confirm everyone bid on the same thing. Ask these questions for each proposal:
- Were all contractors given the same plans?
- Did everyone receive the same updates or addenda?
- Are they bidding the full project or only part of it?
- Did they include demolition, site work, utilities, finishes, and cleanup?
- Did they include permits, inspections, and closeout documents?
- Did they include owner-requested alternates?
If the scopes don’t match, you’re not really comparing bids. Make sure you have the full picture before making any decisions.
Look Closely at Inclusions and Exclusions
A solid commercial construction bid should clearly state what’s included: labor, materials, permits, subcontractor work, site cleanup, and warranty. If those aren’t spelled out, ask. If the bid excludes any of the following, flag it:
- Utility upgrades
- Permit fees
- Hazardous material abatement (like asbestos removal)
- Unforeseen site conditions
Exclusions aren’t automatically a red flag. Unexpected conditions can be hard to price upfront. But you need to understand them before signing anything, so there are no surprises mid-project.
Compare Allowances Carefully
An allowance is a placeholder amount built into a commercial construction bid for items that haven’t been fully specified yet, like flooring, fixtures, or finishes. For example, a bid might include a $10,000 flooring allowance, but if you select materials that cost $18,000, that’s $8,000 more out of your pocket.
Low allowances can make a bid look cheaper than it really is. Always check what’s covered and whether it matches your actual expectations.
Compare Timelines, Not Just Cost
A cheaper bid that takes twice as long can hurt your business. Review each commercial construction bid for:
- Estimated start date
- Project duration
- Long-lead materials (items that take extra time to order)
- Permit timeline assumptions
- Phasing
- Business interruption (will you need to close or relocate?)
- Occupied-space construction
- Critical milestones
- Final inspection and turnover
A realistic schedule shows the contractor has actually thought through your project.
Evaluate the Contractor, Not Just the Bid
Numbers only tell part of the story. Before making a decision, verify licensing and insurance, check for relevant experience with your project type, and ask for references from past clients.
Subcontractor quality matters too. A low bid is sometimes built on the cheapest subcontractor numbers, which can mean slower work, more problems, and costly fixes down the road.
This is where track record counts. Arnell-West has been delivering commercial construction projects across Utah since 1986. With nearly 40 years of on-time, on-budget project delivery and a high rate of repeat clients, we’re a contractor whose bid reflects real-world costs—not just a number to win the job.
Watch for These 6 Red Flags in a Bid
Before accepting any bid, it’s important to recognize the warning signs that may indicate a contractor is underpricing to win the job or lacks the experience to deliver. Look out for the following:
1. Significantly Underpriced Bids
A bid that falls far below the market average is a major red flag. This often indicates underestimated material costs, omitted project scopes, or an intention to recoup costs through excessive change orders once the contract is signed.
2. Vague or Omitted Line Items
Reputable contractors provide transparent, detailed breakdowns. Missing details or broad, vague line items suggest a lack of planning or an attempt to hide the true scope of work.
3. Unrealistically Low Allowances
Setting low allowances for essential materials or finishes artificially deflates the initial bid. Once actual selections are made during construction, these low thresholds inevitably lead to budget overruns.
4. Unrealistic Project Timelines
An overly aggressive schedule that ignores standard curing times, permitting delays, or phase dependencies is rarely met. Look for logical timelines that account for real-world variables to ensure on-time delivery.
5. Absence of Dedicated Project Management
Successful commercial projects require consistent, professional oversight. If a bid doesn’t designate a qualified, dedicated project manager, your build risks suffering from poor site coordination and compromised quality control.
6. Reluctance to Provide References or Clarification
Transparency is key to a successful partnership. A contractor who hesitates to share references, display past project performance data, or clarify bid details likely lacks the proven track record required for professional execution.
Why the Lowest Bid Is Not Always the Best Value
A low bid can mean a contractor cuts corners on materials, underestimates labor, or plans to make it up through change orders later. The best bid is the one that’s complete, clear, realistic, and backed by a contractor with the experience to deliver.
Frequently Asked Questions
How many bids should I get for a commercial construction project?
Three is a common benchmark. It gives you enough comparison without overcomplicating the process.
What does “scope of work” mean in a construction bid?
It’s a detailed description of exactly what the contractor will do: what’s included, what isn’t, and to what standard.
What’s the difference between an allowance and an estimate?
An allowance is a set dollar amount budgeted for an unspecified item. An estimate is a projected cost based on known information. Allowances carry more risk if your selections exceed the placeholder amount.
Should I always go with the most detailed bid?
Generally, yes. More detail means the contractor has done their homework and is less likely to hit you with surprise change orders.
How do I know if a contractor’s schedule is realistic?
Ask them to walk you through it. A contractor who can’t explain their timeline clearly may not have thought it through.
Get a Fair Bid From Arnell-West
Comparing commercial construction bids is only half the job—picking the right contractor is the other half. Arnell-West has built its reputation across the Wasatch Front on competitive pricing, experienced crews, and a proven track record of delivering what they promise. Get in touch to discuss your next project.