Subcontractor Bidding Guide

Subcontracting is a different game than direct owner work. Understanding the dynamics helps you compete effectively.

The Subcontracting Model

In typical subcontracting:

• -Owner hires General Contractor (GC)
• -GC hires specialty subcontractors (subs)
• -Subs perform the trade-specific work
• -GC manages overall project and coordinates

Why GCs Use Subcontractors

GCs subcontract because:

• -Specialty trades require expertise
• -Spreading work reduces risk
• -Volume fluctuates with project type
• -Union/non-union considerations
• -Licensing requirements

The Sub's Position

As a sub, you face unique challenges:

• -You're one step removed from the owner
• -The GC is your customer, not the owner
• -Multiple subs compete for each package
• -Payment flows through the GC
• -You have limited control over schedule

Types of Subcontract Arrangements

Common structures:

• -Lump sum: Fixed price for defined scope
• -Unit price: Price per unit of work
• -Time and material: Labor and materials at agreed rates
• -Cost plus fee: Costs plus percentage or fixed fee

Public vs. Private Work

Different rules apply:

• -Public: Often lowest-responsive-bid
• -Private: GC has more discretion
• -Some public work requires sub listing at bid
• -Private GCs may negotiate after winning

Getting invited to bid is the first step. Multiple channels can bring subcontract opportunities.

Traditional Sources

• -Plan rooms: Local and online plan rooms (Dodge, CMD, iSqFt)
• -GC invitations: Direct invitations from GC estimators
• -Builder's exchanges: Local networking organizations
• -Industry associations: AGC, ABC, trade associations
• -Newspaper/online ads: Public bid advertisements

Building Your Visibility

Make sure GCs can find you:

• -Register with major plan rooms
• -List in supplier/sub directories
• -Maintain active web presence
• -Keep qualifications current
• -Respond quickly to bid invitations

Targeting the Right GCs

Not all GCs are equal. Target GCs who:

• -Build your project types
• -Operate in your geographic area
• -Have reputation for paying subs
• -Match your size (too big or small can be problems)
• -Value quality over just low price

Getting on Bid Lists

To get invited more often:

• -Submit qualifications packages to target GCs
• -Attend industry events where GCs participate
• -Ask suppliers for GC recommendations
• -Request feedback after bidding
• -Deliver excellent work when you win

Bid Timing Considerations

Sub bids have unique timing:

• -GC bid deadlines drive everything
• -Multiple GCs may bid the same project
• -You may need to submit to 3-5 GCs
• -Some GCs request bids day-of
• -Use technology to speed your takeoff and bid more projects

Strong GC relationships are your competitive advantage. GCs prefer working with subs they know and trust.

What GCs Want in Subs

GCs value:

• -Reliability: Show up when you say, finish when promised
• -Responsiveness: Quick bid turnaround, answer the phone
• -Quality: Work that doesn't create callbacks
• -Problem solving: Handle issues without drama
• -Communication: Proactive updates, no surprises
• -Competitive pricing: Fair, if not always lowest

Building New Relationships

Start with:

1. Research the GC (projects, people, reputation)

2. Request a meeting with estimating/PM

3. Present your qualifications

4. Ask about their process and preferences

5. Follow up with bid opportunities

Maintaining Relationships

Ongoing relationship building:

• -Bid consistently (even when you know you're high)
• -Communicate proactively during projects
• -Attend their company events if invited
• -Connect on LinkedIn
• -Remember names and personal details

Preferred Sub Status

Goal: become a preferred subcontractor:

• -Invited to bid private negotiated work
• -Given early scope review opportunities
• -Trusted with more complex projects
• -Pricing collaboration vs. just low bid
• -Payment priority and favorable terms

When Relationships Go Wrong

Sometimes relationships sour:

• -Address issues directly and professionally
• -Learn from what went wrong
• -Decide if worth rebuilding
• -Don't burn bridges unnecessarily
• -Move on if needed - plenty of GCs exist

Subcontract pricing requires understanding the GC's perspective while protecting your interests.

The Sub Bid Process

Typical sub bid sequence:

1. Receive bid invitation with plans/specs

2. Review scope and prepare takeoff

3. Price materials, labor, and overhead

4. Submit to multiple GCs bidding the project

5. Wait for GC results

6. Negotiate final scope and price

Speed Matters

GCs collect sub bids close to their deadline:

• -Complete takeoffs quickly (tools like Tectonic help)
• -Have pricing templates ready
• -Know your costs well to price fast
• -Submit to all bidding GCs

Multiple GC Strategy

When several GCs bid the same project:

• -Submit to all (increases your chances)
• -Keep pricing consistent (GCs talk)
• -Note if price changes for different GCs
• -Be responsive to all during bid day

Scope Gaps and Opportunities

Look for scope that may fall between trades:

• -Who provides backing for toilet accessories?
• -Who patches around penetrations?
• -Who does final cleaning?

Price these items explicitly. Scope gaps are where GCs get burned and remember who covered them.

Bid Day Negotiation

Expect pressure on bid day:

• -GCs may ask for last-look pricing
• -Be prepared with a floor price
• -Have value engineering options ready
• -Know what scope reductions you can offer
• -Don't give away margin without scope reduction

Post-Award Negotiation

After the GC wins:

• -Confirm scope in writing
• -Resolve any scope questions
• -Negotiate contract terms
• -Get a signed subcontract before mobilizing

The subcontract is your protection. Don't start work without a clear, fair agreement.

Key Contract Terms

Review carefully:

• -Scope: Clear definition of included work
• -Price: Total and any unit prices
• -Schedule: Start, duration, milestones
• -Payment: Terms, retainage, procedures
• -Changes: How changes are handled and priced
• -Insurance: Requirements and limits
• -Indemnification: Who bears what risk
• -Termination: Under what conditions
• -Disputes: How resolved

Problem Clauses

Watch out for:

• -Pay-if-paid: You get paid only if GC gets paid (risky)
• -Pay-when-paid: Timing tied to GC payment (more common)
• -Broad indemnification: Taking on excessive risk
• -Unlimited liability: No cap on your exposure
• -No-damage-for-delay: You can't recover for their delays
• -Binding arbitration: May limit your recourse

Negotiating the Contract

You have more leverage than you think:

• -Propose fair alternative language
• -Reference your standard terms
• -Decline unacceptable risk
• -Negotiate specific terms you care about
• -Get changes in writing before signing

Insurance Requirements

Typical sub insurance requirements:

• -General liability: $1-2M per occurrence
• -Workers comp: Statutory limits
• -Auto liability: $1M combined single limit
• -Umbrella: $2-5M depending on project

Check requirements before bidding - special insurance costs money.

Schedule Protection

Schedules slip on construction projects:

• -Include schedule assumptions in your bid
• -Request schedule in the contract
• -Protect rights to delay claims
• -Document delays as they occur
• -Communicate schedule impacts early

Subcontractors face unique risks. Take steps to protect yourself throughout the project.

Before You Start

Before mobilizing:

1. Get a signed subcontract

2. Verify GC's ability to pay

3. Obtain necessary permits

4. Confirm insurance is in place

5. Review schedule and access requirements

6. Attend kickoff meeting

Payment Protection

Protect your right to payment:

• -Preliminary notices: File required notices to preserve lien rights
• -Monthly invoices: Bill promptly per contract terms
• -Lien waivers: Only provide for amounts actually received
• -Retainage tracking: Monitor retainage and push for release
• -Collections: Act quickly on slow payment

Documentation

Document everything:

• -Daily logs (what you did, crews, conditions)
• -Photos (progress, conditions, potential problems)
• -RFIs (in writing, track responses)
• -Change order requests (don't proceed without approval)
• -Correspondence (email is usually fine)

Change Order Management

Changes are where money is made or lost:

1. Identify changes early

2. Submit pricing before proceeding

3. Get approval in writing

4. Track changed work separately

5. Bill changes promptly

Dispute Prevention

Avoid problems by:

• -Communicating proactively
• -Addressing issues when they're small
• -Building relationships with GC field team
• -Understanding the owner's perspective
• -Being professional even when frustrated

When Things Go Wrong

If you have problems:

1. Document the issue

2. Communicate in writing

3. Review your contract rights

4. Consult an attorney if significant

5. Consider liens or bond claims if unpaid

6. Learn lessons for next time

Building Reputation

Long-term success comes from reputation:

• -Deliver what you promise
• -Be honest about problems
• -Make things right when you're wrong
• -Build relationships across projects
• -Let your work speak for you