A bid estimate is your private build-up of cost and price. A quote, a proposal and a bid are the documents that carry a price to someone else. Here, a bid estimate means the file a contractor builds before bidding, not the engineer's estimate an agency prepares for its own budget. Before you name a price to anyone, settle who relies on it, how long it holds, what scope it covers and whose form it goes on.
Bid estimate, quote, proposal and bid: one ladder
The four words overlap in daily use. Many customers say "estimate" for a rough range and "quote" for a fixed price. Many commercial estimators use "estimate" for the internal build-up that usually stays in the office. Some people say "bid estimate" for the number they submit; this post calls that number the bid. A subcontractor's "bid" to a general contractor is often a quote by content.
Federal buying defines the words. FAR 2.101 defines an offer as a reply that would bind the offeror if accepted. Replies to invitations for bids are offers called bids, and replies to requests for proposals are offers called proposals. Replies to requests for quotations are called quotations, and the definition says they are not offers. Private work is looser, so the table sorts the four by the job each one does.
Document | Written by, read by | What it is for | What it leaves out | How it fails |
|---|---|---|---|---|
Bid estimate | You or your estimator. Read by the firm's principal and a reviewer | Working out cost and price from the takeoff | A promise to anyone | Built on a superseded sheet, scope counted twice or not at all, unit costs with no source |
Quote | A supplier or sub, or you on a small fixed job. Read by whoever builds on it | A price for a defined scope, stated to hold for a set time | How the price was built, and any scope it does not name | Lapses before award, excludes what you assumed, prices an old addendum |
Proposal | You. Read by the owner or the general contractor | Putting scope, price and terms in one document to accept | Your cost build-up | Scope that reads two ways, terms that clash with the owner's contract, no stated basis, validity that runs past the quotes under it |
Bid | You. Read by the owner or agency opening bids | A formal offer on the owner's terms | Your own conditions, unless the form allows them | Off the owner's form, a missing signature, an unacknowledged addendum or missing bid security |
Treat the bid estimate as internal, because it holds your markup and your risk lines. If a project owner wants a cost breakdown, send a version built for that purpose. The exception is a contract that gives the owner cost-audit or open-book rights, as cost-plus and guaranteed-maximum-price contracts can. There the contract decides what you show.
A ballpark given before the drawings are complete is a fifth thing: a budget range. Say what it rests on and that it is not a quote. A bid estimate is the version built from complete bid documents.
Takeoff first: the quantities every later document uses
A takeoff measures. An estimate prices what the takeoff measured. That is the difference between a takeoff and an estimate: quantities on one side, and labor, material, equipment, subcontracts, overhead and profit on the other. A line such as 7,560 SF of gypsum board belongs to the takeoff. The estimate multiplies it by hours per unit and a rate, then adds material.
Every later document inherits those quantities. If the takeoff misses a wall, the estimate misses it and so does the proposal. Subs and suppliers measure for themselves, so each quote rests on someone else's takeoff, and scope gaps hide between quotes. How a takeoff is built covers the measuring.
What a bid estimate is, and what it does not promise
A bid estimate is the working file behind your number. It holds quantities tied to sheets, a unit cost with a source and a date for each line, labor hours, the subcontract quotes you rely on, general conditions, named risks, overhead, profit and your assumptions. How a pre-bid number is built walks through each step.
It promises nothing to anyone, so it can show what a quote or a bid keeps inside one number: your markup, your contingency and your open questions. That makes it the file to open when an owner asks why the number moved. Takeoff Services LLC delivers its priced estimates as a workbook with labor burden, general conditions, overhead and profit on separate rows, so a change to the profit line shows in the price; the layers of a priced estimate are listed on the service page.
An agency's engineer's estimate is a different file. On federal construction above the simplified acquisition threshold, FAR 36.203 calls for an independent government estimate prepared in as much detail as though the government were competing for award, and it limits who may see it. TxDOT describes its engineer's estimate as a table of bid items with a unit price and a quantity for each. Those serve the owner. Yours serves you.
Quote: a price held open for a stated time
A quote is a price for a defined scope that the sender says it will hold for a set time. Suppliers and subcontractors send quotes to you, and you build them into your estimate. You send one yourself when an owner wants a firm price for a small, fully defined job. Before you rely on a quote, check six things.
Sheets and addenda are named by number and date.
What the price includes is stated: tax, freight, delivery, installation.
Exclusions are written out, not implied.
Validity is a date, not only "30 days".
Lead time and payment terms appear.
Sender, issue date and contact are on the page.
Federal rules show one legal edge. In simplified acquisitions, FAR 13.004 says a quotation is not an offer, so the government cannot accept it to form a contract. That is a federal example. Whether a private sub may withdraw a quote after you relied on it depends on state law and the documents involved, so do not assume either answer. Ask for a written extension when a quote will lapse before award. Then put the quotes on one basis; how to level sub quotes shows the method.
Proposal: the document that carries scope, price and terms
A proposal puts scope, price and terms into one document that the owner can accept. It is a common document on private and negotiated work. A quote answers "how much for this?" A proposal answers what you will do, for how much and on what terms. For the sections in reading order, see a bid proposal template with sample wording.
A proposal can fail in four ways: scope that reads two ways, a price with no stated basis, terms that clash with the owner's contract documents, and a validity date that runs past the shortest quote under it when you have not priced the gap. Without a basis, nobody can tell which drawings or addenda the price covers.
Public work: the sealed bid is a different document
On a public sealed bid, the owner writes the document and you fill it in. The invitation sets the form, the deadline, the addenda and any bid security. The federal rule is a useful model. FAR 14.301 says a bid must comply in all material respects with the invitation to be considered for award. It lets a bidder's own form or letter count only if the bidder accepts every term of the invitation. State and local rules differ, so read the instructions to bidders. On a private proposal you control the scope wording, the terms and the validity. On a sealed bid you control the numbers you enter and the signature. The owner's bid form gets its own checklist.
If the owner's forms are what slows your week, Takeoff Services LLC's bid desk drafts invitations in your account for you to send, chases the replies, levels the quotes and assembles the forms pack against the owner's bid form. The pricing and the signature stay with you.
One job walked through all four documents
The job is invented: a 3,000 SF office suite build-out, priced by a general contractor for a private owner and, in the last table, for a public one. Every dollar amount below is illustrative: a made-up round figure that keeps the sums simple. None is a market price, wage rate or quote, and your own jobs will price differently.
The quantity list
The takeoff comes first and holds no prices.
Item | Quantity | Unit | How it was measured |
|---|---|---|---|
Metal stud partitions, 9 ft high | 420 | LF | Plan walls |
Gypsum board, both faces | 7,560 | SF | 420 x 9 x 2, openings not deducted |
Suspended ceiling | 2,700 | SF | Room areas |
Hollow metal door and frame | 14 | EA | Door schedule |
Paint, walls | 7,560 | SF | Same faces as the board |
The bid estimate
The estimate prices every line. In this lump-sum job none of it goes to the owner. The amounts are illustrative.
Row | Basis | Amount (illustrative) |
|---|---|---|
Partitions and board | Own crew, 7,560 SF of board | $22,000.00 |
Ceiling | Own crew, 2,700 SF | $8,000.00 |
Doors and frames | Own crew, 14 EA | $8,000.00 |
Paint | Own crew, 7,560 SF | $6,000.00 |
Electrical | Sub quote | $25,000.00 |
Plug: temporary power | Placeholder for scope the electrical quote excludes | $1,000.00 |
Mechanical | Sub quote | $18,000.00 |
Flooring | Sub quote | $12,000.00 |
Direct cost | Sum of the eight rows | $100,000.00 |
General conditions | 5 weeks x $1,200.00 per week | $6,000.00 |
Risk: quotes lapse | $55,000.00 x 4% x 50% | $1,100.00 |
Cost with risk | $100,000.00 + $6,000.00 + $1,100.00 | $107,100.00 |
Overhead | 8% of $107,100.00 | $8,568.00 |
Profit | 6% of $115,668.00, cost plus overhead | $6,940.08 |
Price | $107,100.00 + $8,568.00 + $6,940.08 | $122,608.08 |
Sub quotes carry $55,000.00 of the $100,000.00 direct cost, so more than half of the direct cost rests on other people's documents. A plug is a placeholder price for scope that no quote covers. Permit fees stay out of the price and appear in the exclusions below.
The risk row is invented for illustration. It assumes a 50% chance that the three quotes are repriced 4% higher. If all three were repriced, cost would rise by $2,200.00, so the row is a hedge, not cover.
The quotes coming in
Bid day is day 0, and the owner says award comes on day 45. Each quote is good for 30 days from its issue date.
Quote | Amount (illustrative) | Issued | Lapses | Days uncovered |
|---|---|---|---|---|
Electrical | $25,000.00 | 10 days before bid day | Day 20 | 25 |
Mechanical | $18,000.00 | 7 days before bid day | Day 23 | 22 |
Flooring | $12,000.00 | 12 days before bid day | Day 18 | 27 |
The flooring quote lapses first, on day 18. You have three choices.
Extend: ask each sub for a written extension to day 45. The risk row goes, and the price falls from $122,608.08 to $121,348.80.
Shorten: limit your own proposal to day 18. That also needs no risk row and prices at $121,348.80, but it asks the owner to accept well before the expected award.
Carry: hold the proposal to day 45 and keep the risk row, as the estimate does. The price stays at $122,608.08.
What goes out: the same job as quote, proposal and bid
A quote comes in. The proposal and the bid go out, each written for a different reader. On a small, fully defined job you may send a quote instead; the quote view of an estimate sheet shows how the same rows print for a customer. The table keeps the same illustrative dollars.
Part | Quote in (electrical) | Proposal out (private owner) | Bid out (public owner) |
|---|---|---|---|
Scope | Electrical, sheets E1.0 to E3.2, addenda 1 to 3 | All trades, the full drawing set by sheet number and date, addenda 1 to 3 | The owner's bid items, in the owner's words |
Price | $25,000.00 lump sum | $122,608.08 lump sum | Base bid $122,608.08; alternate 1 adds $2,289.60 |
Exclusions | Temporary power, permit fees | Permit fees, furniture, data cabling | Only where the form has a place for them |
Validity | Through day 20 | Through day 45; the gap after day 18 sits under the $1,100.00 risk row | As the invitation states |
Terms | Payment per your subcontract | 5-week schedule, monthly billing | The owner's contract, accepted as written |
Signed by | The sub's authorized person | You and the owner | Your signer, on the owner's form |
On a public bid the owner usually sets the hold period in the invitation, so day 18 is not yours to choose. Written extensions and the risk row are the options left.
Alternate 1, an upgraded ceiling tile, is $2,000.00 of cost. It carries overhead and profit: $2,000.00 x 1.08 x 1.06 = $2,289.60.
This example is simplified: no sales tax, bond, escalation or unit prices. Real estimates have far more rows, and the dollar figures, the 4% repricing, the 50% chance and the markups are invented. Use your own records.
Which document are you asking an outside estimator for?
Takeoff Services LLC sells outsourced takeoffs and estimates, so read this table as a way to test any provider, including us. When you ask an outside estimator for numbers, name the document you need: a quantity list, a priced estimate or a bid-ready number, because each one carries different assumptions.
You need | Ask for | What comes back | What stays with you |
|---|---|---|---|
Quantities to price with your own rates | A quantity list | Counts, lengths, areas and volumes tied to sheets | Every price and the markup |
A priced number to check or use | A priced estimate | Quantities with unit costs, labor, subs, general conditions, overhead and profit on separate rows, plus written assumptions | The bid or no-bid call, and the final markup |
A bid-ready number for the owner's form | A priced estimate and a forms pack | The estimate and a forms pack assembled against the owner's bid form | The pricing call and the signature |
If your own staff already measures well, you may need only the first row, or none of them. When you do send the measuring out, measured quantities tied to sheets let you price with your own rates.
A sub's quote cannot come from an outside estimator, because only the sub can stand behind its own price for its own work. When a provider quotes you a price for the estimating work itself, check what that quote puts in writing; a scorecard for any outside desk lists the terms to score. Delivery runs 24 to 96 hours from an approved quote at Takeoff Services LLC.
Insurance restoration uses "estimate" in another sense. A claim estimate and its supplement are line-item repair documents that a carrier reads, not bid documents.
Frequently asked questions
What is the difference between an estimate and a quote?
An estimate is the calculation of cost and price, and in commercial work it usually stays inside your firm. A quote is a price for a defined scope that the sender says it will hold for a set time, and someone else relies on it. Everyday talk often flips this, using estimate for a rough range, so confirm what the other person expects.
Is a bid the same as a proposal?
A bid is a formal offer in response to an invitation, usually on the owner's form, and the owner's terms control. A proposal is your own document with scope, price and terms, and it is common on private and negotiated work. Private subs often say bid when they mean a quote, so read the contents.
What does a bid estimate include?
A bid estimate holds quantities tied to sheets, a unit cost with a source and a date for each line, labor hours, the sub and supplier quotes you rely on, general conditions, named risks, overhead, profit and written assumptions. It promises nothing to anyone, which is why it can hold your markup. Keep it inside your firm unless the contract gives the owner a right to see costs.
What is the difference between a takeoff and an estimate?
A takeoff lists measured and counted quantities with units and no prices. An estimate prices those quantities and adds labor, equipment, subcontracts, general conditions, overhead and profit. The takeoff answers how much work there is. The estimate answers what it costs and what to charge. Some people use the word takeoff for both, so ask whether prices are expected.
