1. Start from what similar jobs went for
Past contract awards are public. Before you price, look up what the government paid for similar work in your state over the last few years. Bid Watch shows this on every bid as the typical winning price, plus who won and for how much, so you know the range before you start.
2. Use the estimated range in the solicitation
Federal construction solicitations state the project's size range, for example "between $100,000 and $250,000." If your number is far outside it, re-check your takeoff and scope.
3. Price labor at the required wage rates
Most government construction jobs include a wage determination listing the minimum wages and fringe benefits for each trade in that county. Maintenance and service jobs, like mowing, cleaning and snow removal, usually have their own service wage determination. Price your labor at or above those rates, and include the time for certified payroll paperwork.
4. Add the costs that don't show on the drawings
- Bonds: get a quote from your surety agent. The cost depends on the job size and your company's history.
- Insurance at the levels the contract requires.
- Site access and security: badging, escorts and restricted hours on military and federal sites.
- Travel, mobilization, permits and dumpsters.
- Overhead and profit. Don't drop your margin to zero to win.
5. Price each line item honestly
Many bids break the price into line items. Don't load most of the money into the early items to get paid sooner. Agencies can reject "unbalanced" bids.
6. Plan for cash flow
The government pays reliably, but on its schedule, usually around 30 days after a proper invoice, and it may hold back part of a payment until the work is accepted. Make sure you can carry payroll and materials until then.
7. Learn from every bid opening
Public bid results and award notices show the winning price. Track how far you were from it. After a few bids, you'll know your market.