The Bid Leveling Checklist Every General Contractor Should Use

Subcontractor quotes arrive in the last hours before a bid is due, in six different formats, each with its own idea of what the scope is. A general contractor who carries the lowest number without leveling is not carrying the lowest price. They are carrying the quote that left out the most. Bid leveling is the discipline that turns a pile of quotes into a comparison of the same work, and it is the difference between a bid that holds and one that loses money through buyout.

Why leveling comes before choosing

Leveling means adjusting each quote to a common scope, common assumptions and common commercial terms, so that the only remaining difference is price. Done properly it produces a number for each bidder that represents what that subcontractor would actually cost you on this project, including the gaps you would have to fill. Those adjusted numbers are the ones to carry in the bid and the ones to negotiate from at buyout. The raw quote totals are nearly meaningless until that work is done.

Step 1: Build the scope matrix before quotes arrive

The scope matrix is a grid of every scope item that could reasonably fall to more than one trade, with a column for each bidder. Build it from the specifications and your own takeoff before quotes come in, so you know what you are looking for. On a framing and drywall package for a 40,000 SF office building, the gray areas are predictable: fire-stopping, shaft wall, blocking, finish levels and access equipment. Three quotes came in at $595,000, $612,000 and $648,000. Here is how the matrix read.

Add the plugs and the picture changes. Sub A levels to $645,300. Sub B, which excluded nothing, stays at $648,000. Sub C, the apparent low bidder at $53,000 under the high quote, levels to $666,100 and is now the high number. The spread between bidders drops from 8.9 percent to 3.2 percent, and the GC can carry Sub A or Sub B knowing the gaps are covered.

Step 2: Read inclusions and exclusions line by line

Every quote has a paragraph or a page of inclusions, exclusions and qualifications. Read all of it, including the boilerplate. The sentences that cost the most are the ones that look harmless.

• Exclusions that transfer risk: 'unforeseen conditions', 'work above 12 feet', 'overtime or shift work', 'protection of adjacent finishes', 'final cleanup', 'hoisting by others'.
• Qualifications that change quantity: 'based on 9-foot ceilings', 'assumes 1,800 LF of partition', 'pricing per attached takeoff'. These tell you the sub measured something different from your takeoff.
• Material qualifications: 'pricing valid 15 days', 'subject to mill escalation', 'equal product assumed'. Each is a cost you will own after the acceptance window closes.
• Silence. If fire-stopping is in the spec section and the quote neither includes nor excludes it, assume it is excluded and ask.

Step 3: Alternates, unit prices and allowances

Alternates must be compared in the same direction and the same scope. If the bid form lists Alternate 2 as a deduct for deleting the Level 5 finish, and one sub priced it as an add for including it, convert before you compare. Unit prices for likely changes, such as per-LF partition or per-SF ceiling, should be checked for unit consistency and for whether they include markup. Allowances inside a sub quote are a sub's way of not measuring something; replace each one with your own quantity and price, or ask for the basis in writing.

Step 4: Schedule assumptions and manpower

A quote priced for a 16-week duration with two crews on a single shift is a different quote from one priced for 12 weeks with three crews and Saturdays. Ask every bidder to state the duration, crew size and shift pattern they assumed. If the project schedule requires more compression than a bidder priced, the premium will arrive as a change request or a claim. Normalize now, or pay later with no competition.

Step 5: Bonding, insurance and commercial terms

Confirm each bidder can bond the contract value if a performance and payment bond is required, and whether the premium is included, excluded or shown as a separate add, typically 1 to 3 percent depending on the sub's rating. Check insurance limits and additional-insured language against the prime contract. Note retainage, payment terms, deposits and stored-material conditions. None of these change the number much on their own, but a sub that cannot bond or carry the required limits is not a valid bidder.

The bid leveling checklist

Run every quote through this list before a number is carried.

1. Confirm each quote references the correct drawing set, issue date and all addenda by number.
2. Confirm the quote covers the complete spec section or sections you requested, by CSI number.
3. Fill the scope matrix for each bidder: included, excluded or by others, for every gray-area item.
4. Price a plug for every exclusion using your own takeoff or the highest competing quote, and add it to that bidder's number.
5. Read every exclusion and qualification sentence. Flag any that shift risk to the GC: unforeseen conditions, overtime, hoisting, cleanup, protection.
6. List alternates and confirm each bidder priced the same alternates in the same direction, add or deduct.
7. Compare unit prices for likely changes and confirm the units match (SF versus SY, LF versus EA).
8. Convert every allowance to your own quantity and price, or obtain the bidder's basis in writing.
9. Record the duration, crew size and shift pattern each bidder assumed and normalize to the project schedule.
10. Confirm the quote holds for the acceptance period you need and that material pricing is firm or escalates on a stated index.
11. Confirm bonding capacity and whether the bond premium is included, excluded or listed as an add.
12. Check insurance limits against the contract requirements and note any additional-insured or waiver exclusions.
13. Confirm sales tax, permits, submittals, testing and closeout documents are included where the sub owns them.
14. Note payment terms, retainage expectations and any deposit or stored-material conditions.
15. Total the leveled number for each bidder and record who prepared the leveling and when.

Reading the leveled result

Once every bidder is leveled, the comparison is finally about price, capacity and the quality of the relationship. A bidder who excluded little and leveled close to their raw number has read the documents carefully and will likely perform the same way. A bidder whose leveled number jumped 12 percent either did not read the specs or priced to be low on paper. If your team does not have the hours to level every package on a busy bid week, an independent takeoff of the major trades gives you the quantities and plug pricing to level against in a fraction of the time.