A contractor proposal is one of the most important marketing and sales tools available to a construction company.
We’re all aware that the construction industry is based on relationships. As a general contractor, you create strong relationships with building owners and developers. If you are a subcontractor, the more relationships you have with general contractors, the more invitations to bid you will receive.
You put a lot of effort into getting that invitation to bid as a construction business owner or salesman. Once you get it, this is your chance to make an impact with a construction bid proposal that is timely, accurate, and clear, establishing the trust required for your client to award you the project.
What is a Contractor’s Proposal?
A contractor proposal is a written outline that specifies the key terms of the project the contractor will be able to complete. A contractor proposal is normally written after the contractor has spoken with the client to identify his needs as well as the number of resources the contractor will need to devote to the project.
A contractor proposal often includes information such as an estimated cost or “quote” and payment terms, the contractor’s and client’s names and addresses, a detailed description or drawing of the project, and the project’s start and completion dates.
It is not uncommon for an individual or organization to collect many contractor proposals from different contractors and use them as project bids.
When comparing different proposals, however, it is important to check whether the contractor has included the cost of materials. In addition to the completed project, the client should note which, if any, responsibilities the contractor has defined as his or her own.
If the project is related to construction, for example, it may be necessary for either the client or the contractor to get permits to build. In addition, the contractor bid should specify if the contractor will be responsible for insurance, warranties, and project clean-up.
A Contractor Proposal is Specific
You want to be sure that your price is more than a guess, as your proposal will hopefully be the basis of a contract soon. You’ll be able to submit an accurate proposal to your client if you keep a detailed, in-house accounting of the construction budget based on a real understanding of the project requirements.
It may be a bit higher or lower than the estimate you gave them, but their expectations are managed because you made it clear that the estimate was not the final number.
What‘s important now is that the price and time are accurate, so the client can be assured that everything will be done for the quoted price, and you can be sure that you will do what you set out to do – make a profit.
Things to include in the Contractor Proposal
- A well-defined scope of work
- A timeframe for the project
- A proposal expiration date, to prevent you from doing work next year for this year’s prices
- A signature line (as soon as they accept the proposal, it becomes a contract; it’s a good idea to highlight this in the proposal)
Types of Contractor Proposals
Construction proposals are classified into two types, each with its own purpose and format.
- Marketing Proposals – These are the materials you send to potential clients in order to showcase your company, build a relationship, and persuade them to include your company on their bid lists.
- Bid Proposals – These are project-related proposals, responses to ITBs, or proposals with actual construction bids. These proposals are intended to persuade your client that your company is the best fit for the job. In other words, to outperform your competitors on a specific project. A good example of a bid construction proposal is a short PDF document that includes the project name, scope, timeline, and price.
Is the Contractor Proposal Form Accompanied by Other Forms?
This form does not necessarily require the use of any other forms. However, if necessary, the contractor may attach any documents deemed necessary to it.
How to Write a Marketing Contractor Proposal?
Marketing proposals are documents that you send to potential customers in order to build a relationship and persuade them to include you on their bid list. Your goal is to impress, build trust, and demonstrate that your company is the best fit to meet the needs of your potential client. In summary, a good marketing construction proposal example should include:
1. Service and Business Information
- Cover – Company name, location, contact along with logo and relevant images
- Services Section – Clearly list the services you provide and the states in which you are licensed. Make it clear if you provide commercial and residential services. The same is true for ‘design/build’ and ‘plan and spec’ – it is important to establish these differentiators from the beginning. If your company provides design and engineering services in addition to installation, list them separately. This could be the advantage that establishes your company as a one-stop shop for what they require.
- Persuasion Page – This is the page where you describe what distinguishes you from the competition. An excellent construction proposal example contains factual statements like: There are roughly 300 towers in Dubai, we worked on 200 of them. We made “ENR’s Top 10 Plumbing Contractors in New York” list for 3 years in a row. One of our clients increased their project profit margin by 10% in the first 9 months of working with us.
2. Experience & Expertise Section
- Project Portfolio – Consider the project portfolio to be proof of the services you offer. Try not to include every project you’ve ever worked on. Choose projects that are both relevant to the work you want and representative of your skills in that field. If you are a general contractor who primarily constructs storage facilities, your portfolio should include warehouses, marinas, and other storage structures. Including high-rise projects will not speak to the needs of your potential clients. Present each project with at least one photo, the name and/or address of the building, building specifics, and, most importantly, a description of the work you did in that building. A common omission is not including a description of your work in the building, which is seen in more than 70% of marketing proposals!
- Testimonials – As stated in the project portfolio section, you do not need to include every testimonial ever received, but only the ones that best represent the type and quality of work you do, your professionalism, and your expertise.
- Awards and Accolades
- Insurance and Bond Information
- Persuasion Page – Include additional facts that demonstrate your expertise, experience, and work ethic in addition to a summary of what needs to set you apart from the competition. If your company has a mission statement, include it here.
3. Business Contact Information
- Contact Page
- Back Cover
How To Write a Bid Contractor Proposal
Bid proposals are important in construction bids and in winning work. A construction bid proposal must be timely, accurate, and clear in order for your client to award you the project. Of course, what you include in your bid proposal is important, but so are the design and layout that deliver this information.
There are several elements to a contract proposal, which include:
- The situation at hand
- Project goals
- Recommended methodology
- Project time
- Project cost
- Company qualification
- Project benefits
To write an effective construction project proposal, follow these steps:
1.Do your research
The first step in creating a successful construction project proposal is to conduct research. If you haven’t researched the project, you won’t be able to write a reasonable and convincing proposal. It’s as simple as that; you have to know what you’re talking about before you can talk about it.
Do not start writing your proposal until you have thoroughly researched all aspects of what you will be writing about and offering. You can’t get others to believe in your project unless you believe in it yourself, and you won’t believe in something if you’ve only done half the research.
2.Check State and Local Laws Concerning Proposals
For contract and construction proposals, each state has its own set of rules and regulations. These rules may govern how you construct the proposal as well as what you must include in it.
These rules may only apply to government contracts in some cases, but in others, all proposals must be submitted in a specific manner in order to be considered legally binding.
3. Choose a Proposal Template or Create Your Own
After you’ve met with the clients and done all of the necessary research, you can sit down and start writing.
Begin by choosing one of the many proposal templates available online or creating your own. Either way is fine, but make sure you include information necessitated by your state’s regulations. If you use a template, you may need to modify it to include any additional information that is required.
4. Include a Cover Letter
Begin with a cover letter for your proposal:
That information can be included in the cover letter. That is where you can state the problem – for example, a tower that needs renovation – and offers your vision for how to solve it.
You can also include the benefits of your proposal and what kind of positive changes your project will bring to the area and the people who live there, which are referred to as Deliverables.
5. Be Specific
Following the cover letter, you must include the following sections:
- Company profile and contact information
You’ll talk about your company in these sections.
You will include an “about us” section as well as mission and vision statements for your company. Be succinct and to the point, but don’t undersell yourself. Mention any noteworthy projects you’ve worked on.
After that, include a section with your company’s name, address, website address, email, phone number, and other pertinent information. You can also include your personal contact information.
- Cost estimation and success criteria
In this section, you should go over your future costs in great detail. People want to know how much they’ll have to pay for something and what their money will get them. Don’t “phone it in” when estimating costs.
Following the costs, you should include a success criteria section that discusses your project goals and how the expenses fit into those goals. This demonstrates to people that their money will be used to achieve things they can visualize.
- Deadlines, plan, and approach
Create a timeline for when major milestones in your project should be completed. Set dates to indicate each phase of the work must be completed by the target date. Then, describe your strategy and approach for meeting those deadlines with your team.
Make sure the deadlines are reasonable, but don’t be afraid to be a little optimistic.
Finally, include a section with references for people, companies, and government agencies with whom you have previously worked.
Include their names, contact information, and a brief description of the project you completed for them.
- Agreement statement
The final section of your proposal packet should be your agreement statement, but it is included under this heading because the agreement statement should always end with a signature page.
The formal, professionally written, legally binding contract between you and the client is your agreement statement. It should include the following information:
- Detailed outline of the project
- Construction materials
- A summary of costs
- Work schedule
- Payment details
- Construction bond and permits
- A project completed estimate
- Legal rights of the construction company/contractor
- Legal rights of the client
- Compliance section
- Warranties (if applicable)
- Any other pertinent information discussed in the legal agreement between the two parties
Finally, it should include a signature page with space for both the contractor/construction owner’s and the client/customer’s signatures. It should be witnessed and notarized as well.
Contractor proposals are critical to success in the construction industry, whether your goal is to get your company on a potential client’s bid list or to compete for the job! Search in this article for a construction proposal example that fits your business and needs.
Presentation is essential in marketing and bidding materials. Visually reinforce the impact you make with a clean proposal layout and graphics that demonstrate your expertise and experience, such as flowcharts, infographics, or photos. Needless to say, marketing and bid proposals must be clear, concise, and accurate.
Templates are useful because consistency builds your brand and ensures you cover everything you need to get on that bidding list and… win the job!