Bidding and Bonding Essentials: When and Why?

If and When to submit an Electrical EstimateYou know your business, and your potential customers know you. The next step is looking at jobs available to bid and the companies soliciting your submission. The number of bidders, the “signals” you are receiving from those seeking a proposal, and whether you have the tools, equipment, bonding or pre-approval required are items you must consider before you even think about starting your take-off.

Available jobs can be found on various bid boards and websites and networking with general contractors. Once you have found one or several jobs that peak your interest, pay attention! Review the drawings. What is the quality? Are there “engineering holes” because the project is still in the “design” phase and the contractor may just be looking for a budget price?

Understanding Scope of Work

Do you understand the scope of the work and do you have experience in this type of work? If not, you may be open to potential pitfalls that could cost escalated labor or material costs, or both. Do you have the proper human resources, tools, and equipment to complete this type of work? Renting or purchasing certain items will certainly raise your job costs.

Which general contractors are bidding the job? Do you have a relationship with them? Remember, you may need to submit several bids to a GC before you are awarded a job. Beware of providing “check prices” too! If the project is a public bid opening, it will be awarded to the lowest bidder provided they meet pre-approval and bonding requirements if any.

Consider how many electrical contractors are bidding. If there are several electricals bidding, the plans are marginal, or you do not have a relationship with the GC, walk away! Spend some time looking for projects that suit your company! And time is a critical factor! Often job schedules are extremely tight. As a general rule, the more condensed the schedule and the more trades on site, the less productive your labor will be. Potential overtime wages and labor inefficiencies should be factored into your proposal.

Back to relationships again. Establish relationships with your vendors…lighting, gear, fire alarm, ensuring that you get the “right whisper” number on bid day. Many times a job has been won or lost because of the “play” in quotes on bid day.


Finally, some critical factors: Does the job require a bid or performance bond? Bonding capacity is a key part of a contractor’s portfolio which minimizes the financial risk faced by project owners and developers.

  • A performance bond provides a legal guarantee that the contractor holding the bond will perform specified work or face financial penalties.
  • Bid bonds guarantee that the bidder will sign a contract if awarded the job and will uphold his price.
  • A payment bond protects the owner if a subcontractor fails to pay its suppliers avoiding mechanics liens.

Make sure to give your bonding agent plenty of time to prepare the bond so you can meet your bid day requirements!

Beyond bonds, many projects require pre-approval to not only work at a site but to submit a bid. Don’t wait until the last minute to address this issue, as there could be a mountain of paperwork to complete, which may require the assistance of your accountant or bonding agency.

By paying attention, you will have a better handle on choosing the right jobs to bid. Bidding smarter will give your company the edge.

One thought on “Bidding and Bonding Essentials: When and Why?”

  1. Shelley says:

    Thank you for the effort, keep up the good work.

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