BUSINESS
How to Compare Subcontractor Bids
Contractor method for comparing subcontractor quotes on total cost, not just the headline price.
Two subcontractor bids rarely differ only in price. The lowest number can become the most expensive job once management and tax are applied consistently, so compare them on total cost.
THE SHORT ANSWER
How do you compare subcontractor bids?
Apply the same management and tax percentages to both bids. Bid A $45,000 and Bid B $42,000 with 10% management become $49,500 vs $46,200, so Bid B saves $3,300.
Confirm the scope matches
Only compare bids that cover the same scope, exclusions and quality. A lower price with fewer inclusions is not cheaper.
- Same scope
- Same material grade
- Same exclusions
- Same schedule
Apply management and tax evenly
Coordination and sales tax apply to whichever bid you choose. Applying the same percentages keeps the comparison fair.
Compute the effective total
At $45,000 and $42,000 with 10% management, the totals are $49,500 and $46,200. The $3,300 gap is the real saving.
Decide on total cost, not price
Use the Subcontractor Bid Comparison Calculator and weigh scope and schedule alongside the number. The cheapest effective total is not always the right sub.