Unlike with auctions, in the construction industry, prizes are auctioned off to the lowest bidder. The prizes in this scenario are construction jobs or contracts.
However, this isn’t always the case.
Just as you wouldn’t always pick the cheapest option when choosing materials to decorate your house, those posting construction jobs won’t always go with the most affordable bid.
There are other factors involved in creating an effective bid, so your ability to persuade a client that you’re the right person or agency for the job isn’t solely based on rates.
In this guide, we’ll break down what exactly a construction proposal is, the importance of writing a good one, and how to draw them up with or without templates.
What is a construction proposal?
A construction proposal is a document that details the scope, budget, and other relevant information about a job.
The typical process of sending a construction project proposal looks like this:
- The client posts a job and invites bids from contractors, based on calculations they’ve made and specifications for the project
- The contractor reviews the site and draws up a construction proposal detailing pricing terms, scope, and other pertinent information
- The client goes through the proposals they receive and awards the job to a contractor based on various factors such as price, reliability, and reputation
- The contract is drawn up and signed by both parties, at which point the work can begin
What’s the difference between a construction proposal and a bid?
Whereas a construction proposal covers all details about the project in-depth, a bid is simply an attempt to win a job with a quote. For the purpose of this guide, though, we’ll use the terms interchangeably to refer to the process of securing a construction job via proposal.
In a construction project proposal, the goal is to provide as much information as possible pertaining to the job, to give the client a clear idea of what they can expect with the project.
Here are some examples of useful information to include:
- Contact information of both the party submitting the bid and the party receiving it
- The scope of the work involved, e.g., what tasks need to be completed
- Price and payment terms
- Space for both parties to sign
- Date
While you want the bid to contain as much relevant information as possible, it’s also a good idea to keep it concise. Stick to the essential project-specific information the client needs to know, and you can’t go wrong.
Why is it important to write a good construction proposal?
A construction proposal is not only how you win jobs and earn money, it’s also how you present your company. As such, it’s as much a reflection of the value proposition as it is your brand.
Build brand identity
A construction proposal is one of the most valuable marketing assets available to you and should be treated as such. If you can create polished construction proposals time after time, you’ll build a trustworthy reputation in the industry and put yourself in pole position for jobs you bid on.
Building a strong brand identity pays dividends as it can differentiate your company from other bidders. Using custom brand assets, colors, and other personalized touches can win you bids even if you don’t have the lowest offer.
Clarify expectations
When you write a construction proposal, you’re assuming that the job will be yours. As a result, everything you write will be more or less set in stone for both you and the client. The construction proposal is therefore a perfect opportunity to lay out in no uncertain terms what the client can expect when you execute the project.
When you have everything in writing, there can be no room for misinterpretation or confusion. You’re much less likely to run into issues with the client later down the line as you’ll have made everything clear upfront.
If you complete the project exactly how you said you would, you’ll also build a relationship of trust with the client who may be more inclined to work with you again in the future.
Inform stakeholders
Your construction proposal is your word that you’ll complete the project as outlined. This acts as a reassurance to both the primary decision-maker and any stakeholders with a vested interest in the project.
By detailing all the potential obstacles you may encounter and how you plan to overcome them, you can put stakeholders’ concerns at ease and set yourself apart from the competition.
Plan resources
Knowing how many raw materials, labor, and other resources you’ll need to commit to the project can be challenging.
That’s why drawing up a detailed construction proposal is essential — it allows you to thoroughly think through every aspect of the project. With this prior planning, you can inform your resource planning strategy and make sure you’re not caught short.
How do you write a construction proposal?
If you’ve recently set up a construction firm or work as a freelancer, it pays to know how to write a good construction proposal.
Using a template is a good idea in the beginning, but if you want to put your own stamp on your proposal, let’s take a look at how you can draw one up from scratch.
Contact information
Much like any formal correspondence, a construction proposal should start with relevant contact information.
First, put your name, company name, and other contact information at the top of the document. Then, do the same for the client you’ll be working with.
Here’s a quick rundown of what to include:
- Name
- Company name
- Address
- Phone number
If you want to put a unique spin on your construction proposals, you can also use the space at the top of the letter to display your company logo and other branding assets.
Scope of work
One of the most important elements of any construction proposal, the scope of work (SOW) section is where you’ll outline in detail what exactly the project will involve.
This is where you’ll answer questions such as the following:
- What tasks need to be completed for the success of the project?
- What equipment and raw materials do you need to fulfill the job?
- How will you approach the project?
In the SOW section, your main goal is to inform the client as to how you’ll get the job done and reassure stakeholders that you’ve planned everything out accordingly. It’s where you’ll lay down the general expectations for the project, such as timing and the specifics of how you’ll work.
If it’s relatively brief you can simply add it to the body of the proposal document, but if it runs long you can consider attaching it as a separate document.
While the SOW is generally set in stone, it is possible to make changes during the execution of the project through change orders and deductive change orders.
- Change order: A document to outline any changes to the priorly agreed-upon project scope. In the SOW you would typically describe the process for change orders that both parties understand.
- Deductive change order: When the SOW that was initially agreed upon is reduced.
Cost breakout
A cost breakout or breakdown is where you’ll lay out the financial terms of the project. Specifically, you’ll include the following:
- Overall cost
- Itemized pricing breakdown for materials, labor, equipment, etc.
- Pricing terms and a payment plan
It’s this section that most clients’ eyes will be drawn to straight away, as many bids are decided based on what’s most cost-effective.
If you can be flexible with how you receive payment, that can work in your favor once the time comes for the client to make a decision and award the job to a bidder.
Terms and conditions
While it’s the least interesting part of the proposal to draw up, the terms and conditions are as important as any other.
It’s here that you’ll outline the terms and conditions of the working relationship as pertains to the project. One of the most important pieces of information to include is an expiry date for when your bid is no longer viable, as you don’t want to waste time and energy thinking about a project that won’t materialize.
Signature line
At the end of the construction proposal, you should include a space for signatures where you and the client can sign on the dotted line and make it official.
Construction proposal templates
The first time you try to draw up a construction proposal, it can be an overwhelming process. You don’t want to miss any key details and you want to make a good first impression on the client to win the bid.
If you doubt that you can create an effective construction proposal from scratch, why not try filling out a template instead?
With a construction proposal template, you can use the existing framework to ensure you don’t forget anything. It’s a quick and easy way to put together multiple proposals, so you can send out your bids as and when you need to.
Here are some construction proposal examples you can take inspiration from or use for your own bids:
Excel template
This Microsoft Excel template is basic, but a good option if you want to send a brief summary of what you can offer to prospective clients.
In it, you’ll find spaces to include everything from contact information for you and the client to itemized pricing.
If you’re interested in testing the waters with a simple project bid, the Excel template is good to have on hand.
TemplateLab template
This TemplateLab template is another basic option that presents you with fields for information including the following:
- Contact information
- SOW
- Pricing information and payment plan
Jotform template
The Jotform construction proposal template is a much more detailed option if you want to include more information.
There are pre-built sections, including the following:
- Contact details
- Brief introduction
- Company background
- Project information
- SOW
- Logistics
- Pricing information
- Terms and conditions
- Signature line
This template is an excellent place to start if you want to draw up an in-depth construction proposal to win a bid.
Final notes
Wrike has all the professional services management tools you could need to run construction management projects. While the pen-and-paper method still has a place in the construction industry, it’s the digital equipment that’ll help make sure everything aligns with your construction management plan.
With Wrike, you can fully plan out how you intend to complete a project, assign tasks and responsibilities to team members, and execute and adapt with construction project management features. It can help you as you form your construction proposal and also when the project gets underway.
Here are a few ways Wrike can help you with construction projects:
Resource allocation
Before you set out to complete any construction project, you want to be sure that the numbers add up. Poor resource planning can lead to budgetary issues and disrupt the plan you agreed on with the client, threatening to throw the entire project off course.
With Wrike, you can take control of your finances and allocate your resources accordingly for every project. Set up budget forecasts and visualize your resources and capacity at all times so you can stay on schedule.
Task prioritization and management
Projects rarely go exactly to plan, which is why you need to prioritize the most important tasks and have systems in place to ensure tasks flow through the pipeline and get completed without a hitch.
With Wrike’s task management features, you can assign projects to team members, notify them of changes in real time, and flag high-priority tasks.
You can also automate workflows so that certain actions trigger other actions, speeding up the approval request process and other important processes.
Full transparency
When you work on a construction project, you aren’t the only party interested in a successful outcome. The client and any external stakeholders will want to be updated on the progress as you go.
Wrike’s 360-degree transparency and client management features let you do just that: keep everyone who needs to know about the job posted on its progress. With @mentions, you can stay in touch with stakeholders and clue them in on milestones reached, obstacles encountered, and overall progress made.
Want to explore more? Start your free two-week trial of Wrike today.
