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Construction bidding is the process of submitting a proposal to undertake, or manage the undertaking of a construction project. The process starts with a cost estimate from blueprints and material take offs .
Bidding is used to determine the cost or value of something. Bidding can be performed by a person under influence of a product or service based on the context of the situation. In the context of auctions, financial transactions on international markets, or real estate, the price offer a business or individual is willing to pay is called
A Allocation of costs is the transfer of costs from one cost item to one or more other cost items. Allowance - a value in an estimate to cover the cost of known but not yet fully defined work. As-sold estimate - the estimate which matches the agreed items and price for the project scope. B Basis of estimate (BOE) - a document which describes the scope basis, pricing basis, methods ...
This only occurs after the completion of the construction documents. During this process, a contractor's construction cost estimator prepares a detailed estimate which will be needed for the summation of a bid. The creation of an estimate requires the inclusion of the cost of labor, overhead, profit, and equipment.
The development of a bid and proposal takes place early in the procurement process, and the resulting proposal will be subject to review by the purchaser and negotiation between the two parties. Developing a bid and proposal takes place before a contract vehicle is in place, meaning that firms undertake the costly tasks of proposal-writing and ...
A bid tells the owner how much money they should expect to pay the construction management company in order for them to complete the project. [4] Open bid: An open bid is used for public projects. Any and all contractors are allowed to submit their bid due to public advertising. Closed bid: A closed bid is used for private projects. A selection ...
A cost estimate is the approximation of the cost of a program, project, or operation. The cost estimate is the product of the cost estimating process. The cost estimate has a single total value and may have identifiable component values. A problem with a cost overrun can be avoided with a credible, reliable, and accurate cost estimate. A cost ...
The project is then invoiced to the customer based on the actual costs incurred plus the agreed margin. It is essentially the same as what is known (especially in the U.S.) as a cost-plus contract. This contract form is popular to ensure that a competitive price is obtained, for instance in cases where tender competitions are impractical.