Understanding Bids: How to Compare Contractors on More Than Just Price

When you’re staring at a stack of contractor bids, it’s tempting to circle the lowest number and call it a day. But in construction—especially in higher‑stakes projects like fire rebuilds—the cheapest bid can cost you the most in change orders, delays, and quality issues. A strong comparison digs into scope, assumptions, schedule, team, quality, risk, and contract terms—not just price.

Here’s a practical framework to compare contractor bids with confidence.

1) Align the Scope: Are They Bidding the Same Work?

• Look for a detailed scope of work with inclusions and exclusions. The more specific, the fewer surprises.

• Ask each contractor to reference the same plans, specs, and addenda. If you’ve had changes, send a single, dated scope package to all bidders.

• For fire rebuilds:

  • Confirm demo, debris removal, and hazardous materials handling (e.g., asbestos, lead, smoke‑soot remediation) are included or explicitly excluded.

  • Verify structural assessment and engineering are accounted for; fire often compromises framing, foundations, and trusses.

  • Ensure code upgrade allowances (Title 24/energy, fire sprinklers, egress, smoke/CO detectors, insulation R‑values) are addressed—insurers may only cover “like kind,” but the jurisdiction will require current code.

Red flag: Vague scopes (“all work per plans”) with long exclusion lists. Ask for a line‑item scope and a responsibilities matrix for trades.

2) Normalize Allowances and Assumptions

Bids often include allowances for items not fully specified (fixtures, finishes, appliances, custom millwork).

• Ask for a list of allowances with unit costs or per‑room budgets.

• Compare apples to apples by normalizing: if Contractor A carries $20/sf for flooring and B carries $8/sf, adjust totals to a common standard so you can see the real delta.

• For fire rebuilds, confirm allowances for remediation, temporary utilities, and content manipulation/storage.

Tip: Request a “schedule of values” breaking the bid into divisions (sitework, framing, MEP, finishes). It makes normalization and later change‑order control easier.

3) Vet the Schedule: Duration, Sequencing, and Dependencies

• Look for a baseline schedule with milestones: permit issuance, demo, framing, MEP rough‑in, inspections, finishes, substantial completion.

• Ask what lead times they assumed for long‑lead items (windows, electrical gear, custom doors, cabinets). Are alternates proposed if lead times slip?

• For fire rebuilds:

  • Ensure time for environmental clearances, utility re‑service, and structural inspections is included.

  • Ask about temporary weather protection for partially damaged structures to prevent secondary damage.

Ask for: A Gantt or milestone schedule and a manpower plan (peak crew size, key subs, overlaps).

4) Understand the Build Team and Subcontractors

• Who’s your day‑to‑day superintendent and project manager? How many concurrent jobs do they run?

• Request a list of proposed subcontractors and check licenses, insurance, and local experience.

• For fire rebuilds: Prefer teams with documented restoration experience—smoke odor elimination, air scrubbing, negative air containment, and material selection compatible with remediation chemicals.

Call references for similar projects, not just any project.

5) Review Quality Controls and Warranty

• Ask about QA/QC processes: pre‑construction checklists, mockups, third‑party inspections, photo documentation.

• Clarify warranty terms: duration, what’s covered (workmanship vs. manufacturer), and response time.

• For fire rebuilds: Confirm they’ll perform thermal imaging or smoke‑intrusion testing where appropriate; verify sealing/priming protocols (e.g., shellac‑based primers for smoke odor control) are included.

6) Risk Allocation: What Could Go Wrong—and Who Pays?

• Contingency: Is there a contractor contingency? Owner contingency? How will it be used and reported?

• Unknown conditions: How are concealed damage, existing code violations, or utility conflicts handled?

• Escalation: Does the bid include material price escalation clauses?

• For fire rebuilds: Expect hidden damage behind walls and in attics. Consider a shared contingency and a pre‑agreed unit price schedule (e.g., $/LF for sistering studs, $/SF for sheathing replacement).

Get it in writing: a change‑order process with pricing transparency and approval steps.

7) Contract Type and Payment Structure

• Fixed price (lump sum): Good for well‑defined scopes; watch for change‑order exposure.

• Cost‑plus (with or without GMP): Transparent but requires vigilant oversight; a Guaranteed Maximum Price can cap risk if the drawings are mature.

• Milestone payments: Tie to inspected progress, not just calendar dates.

• For fire rebuilds: If working with insurance, ensure the contractor understands ACV/RCV terms, depreciation, supplement requests, and documentation needed for adjusters.

Ask for: A sample pay application, lien releases, and proof of builder’s risk insurance requirements.

8) Permitting, Inspections, and Code Coordination

• Who pulls permits? Who attends inspections? Who manages corrections?

• For fire rebuilds: Jurisdictions may require additional inspections (structural, electrical service replacement, smoke‑damaged wiring). Confirm these costs and durations are included.

9) Safety, Site Logistics, and Neighbor Impact

• Site fencing, signage, sanitation, material staging, and daily cleanup should be defined.

• For rebuilds in tight neighborhoods or multi‑unit buildings, plan delivery windows, parking, and debris hauling routes.

• For fire rebuilds: Air quality controls and containment are essential to prevent cross‑contamination to adjacent spaces.

10) Documentation and Communication

• Expect weekly progress reports with photos, a 3‑week look‑ahead schedule, and a live issue log.

• Use a shared platform (Procore, Buildertrend, Google Drive) for RFIs, submittals, and change orders.

• For insurance‑driven rebuilds: Ensure the contractor can supply detailed Xactimate or line‑item invoices, certificates, and moisture/smoke remediation logs.

11) Insurance, Licensing, and Financial Health

• Verify license status, bonding capacity, GL and workers’ comp coverage. Ask for endorsements naming you as additional insured.

• For fire rebuilds: Confirm pollution liability coverage if they’re handling smoke/soot remediation and demolition.

Check: How long in business, litigation history, and supplier references for payment reliability.

12) Price—But With Context

When you’ve normalized scope and allowances, price matters. Use this checklist:

• Is the low bid missing scope others included?

• Are allowances unrealistically low?

• Are long‑lead substitutions inflating risk?

• Does the schedule rely on optimistic assumptions?

• Is contingency appropriate for project complexity?

If bids cluster around a range and one is an outlier, treat the outlier with caution and ask clarifying questions before proceeding.

Practical steps to compare bids:

1. Issue a bid comparison matrix:

   • Columns: Contractor A/B/C

   • Rows: Scope line items, allowances, schedule duration, contingency, exclusions, warranty, insurance, key subs, contract type, unit rates.

2. Normalize allowances to your chosen standards and adjust totals.

3. Conduct clarification calls with each bidder and document answers.

4. Request revised best‑and‑final offers after clarifications.

5. Check references and walk at least one active job per finalist.