Why Construction Estimates Vary So Much Between Contractors
Construction estimates vary significantly between contractors due to differences in subcontractor network pricing, estimated labor speed, corporate profit targets, and raw material procurement channels. Differences in how builders value site risks and calculate preliminaries also explain the wide variance in quotes.
The Causes of Bid Discrepancies
Homeowners are often surprised when they receive three quotes for the same project with a variance of up to 20% to 30%. This occurs because builders use different estimation methods—some base figures on basic square footage averages, while others compile detailed takeoffs.
Identifying Bid Strategies: Underbidding and Front-loading
Some contractors submit artificially low bids to secure the project, intending to make their profits later through change-of-scope surcharges. Others overprice specific preliminary phases (like excavation) to secure cash flow early in the payment schedule. Read our guide on takeoffs vs BOQs to protect your budget.
How to Run a Standardized Tendering Process
To align your bids, generate a standardized quantity sheet using our online BOQ builder. Instruct all builders to write their unit rates directly into this sheet so you can compare pricing columns side-by-side.
Frequently Asked Questions (FAQ)
- Should I automatically choose the lowest bid?
- No. Extremely low bids are a warning sign of poor material grades, underpaid workers, or planned hidden charges.
- What is a reasonable bid variance to expect?
- A healthy range is within 5% to 10% between professional builders bidding on the same detailed scope of work.
- How do I handle quote revisions?
- Ensure all additions or deletions are written as signed variations linked to your baseline contract.