In a recent post I wrote about the differences between residential and commercial estimating. There are also significant differences between residential and commercial proposals.
Most of the residential proposals I have seen contain three sections: price, scope and contract. For a commercial proposal, the price section can remain the same, the scope section will be enhanced, and the contract section will be eliminated.
The contract section is the major difference between residential and commercial proposals. Instead of dictating the terms with your contract, you will be negotiating the terms of the general contractor’s or owner’s contract. Because of this, your new proposal must be designed to protect you from problems in the contract and the bid documents.
First, your scope section needs to limit your work. This is because many specifications require you to include any electrical work shown on any drawing. Some specifications try to require that you provide electrical work the engineer missed. If a small detail on an obscure drawing requires electrical work, you would have to provide it if you do not limit you scope.
Start with a statement like “This proposal is based on the following documents”. Follow this statement with a list of the bid documents, including the plans, specifications and addendums. The next statement further limits your risk. It can be added right after the document list, or further down in the qualifications section. It is – “The correctness and completeness of the contract documents is the sole responsibility of those who have prepared them. This proposal covers only that work that is adequately shown, described and/or detailed in the above referenced contract documents”.
The three parts of this scope section work together to protect you from poor specifications and bad plans. This wording will protect you from those “at no additional cost to the owner” phrases.
The scope is then further defined by two lists: Exclusions and Qualifications. Exclusions are short statements defining what you are not going to do, such as “Temporary Power”, or “Utility Company Charges”. Qualifications are complete sentences meant to clarify gray areas of the bid documents, such as “The incoming service locations are not shown. The service conduits included in proposal are limited to stub outs 5′ outside the building.”
Next is your pricing section. Keep it simple and clean. Here is an example.
Base Bid – $45,657.00
Alt #1 – Add $3,432.00
Alt #3 – Deduct $5,444.0
Most word processors have a feature that allows you to line up the decimal points in a column of numbers, which looks very good. In Microsoft Word, you can use a decimal tab.
Close your proposal with a brief sentence. Most I have seen look something like “Please call me if you have any questions”.
Follow this with your signature and title, and you done. Send the proposal to the GC’s at least one day before the bid. This gives them time to respond to your exclusions and qualifications. If you don’t give them time, your proposal may end up in the circular file.