How to evaluate construction bids and choose the right contractor

It’s time to renovate your storefront or condo complex, and you’ve collected construction bids from multiple contractors in town. The only problem? The bids are overwhelming, to say the least. You have no idea how to choose the right contractor for your commercial construction project.

Fortunately, you’re in the right place. This guide overviews the most important parts of a construction bid and offers tips to ensure you work with the best commercial contractor in Virginia for your project.

Read it carefully

Before deciding on a contractor for your commercial renovation, you want to accept bids from multiple contractors. These should be local, licensed contractors with great reputations (though we’ll get to how you evaluate a contractor’s reputation later).

Once all construction bids are in, read each one carefully. Highlight anything you don’t understand and write down any questions. Take those questions and points of clarification into a final conversation with contractors before deciding who to work with. 

Scope of work

The most important, and often overlooked, part of a construction bid is the scope of work. For each bid you receive, judge how well the contractor described the work that would be done and if they set a realistic timeline to finish the work. 

When evaluating scope, the inclusion of a general conditions clause is a good sign that the contractor understands the work necessary to complete the project. A general conditions clause lays the groundwork for how a contractor supervises and manages projects. 

This clause will also lay out the pricing for specific parts of the project, like administrative work and having a project manager on site. It will also review different processes the contractor has in place to successfully manage your project. A clear, defined general conditions clause is a good sign of a transparent contractor who understands the manpower, supplies, and logistics of completing your renovation, remodel, or build out.


While the scope and price are important, the reputation of the contractor matters too. At a minimum, you want to work with a licensed commercial contractor. But this is at a minimum.

You should also look for other signs of a contractor who knows what they are doing and is excellent at communicating about projects. These signs include:

  • Experience local to Virginia Beach and the surrounding area
  • Strong communication during the initial bidding process
  • Successful past projects and glowing testimonials from other clients
  • The ability to stay on budget and on time 
  • A dedication to building the future of the local area

Proposal quality

While it’s important to judge a contractor’s reputation, you should also look at the overall quality of a proposal. If a construction bid leaves you scratching your head or correcting the myriad typos, it’s a sign that the contractor may not be the best communicator. 

The construction bid you accept should also be professionally designed, and there should be a way to reach out to the contractor if you have any questions about what’s in the proposal.


The feature most people pay attention to in a commercial construction contract is the price. We get it; price is important, but maybe not in the way you’d expect.

And you don’t want to hear about pricing and estimates until a contractor has reviewed the scope of the work.

Let’s say you get three construction bids for a building renovation. Two are around $10,000, and the other is only $7,000. It may seem like a no-brainer to choose the third option, but all three contractors have to pay for the same supplies and cost of labor. How is the third company able to offer it for less?

Typically, it’s because that price is too good to be true. Either they’ll cut corners in their work or they didn’t estimate the cost right and will end up going over budget.

You also want to see if change orders, or amendments to an existing contract that changes the scope, are included in the price or will be charged separately.  

Conversations with the contractor

Along with evaluating the physical proposal, you also want to have a conversation with the contractor. Typically, these take place in person and many contractors will visit the renovation site with you before they create a construction bid. 

When contractors visit the site or in the initial conversation, ask any questions or voice any concerns you have about the project. You should also be candid about your budget and expectations so a contractor can assess if the scope of work needed fits the budget and if they can meet your expectations. 

This conversation also sets the tone for what it would be like to work with this contractor. If they are easy to talk to, you’ll most likely have an easier time completing the project. You want to feel comfortable, heard, and understood in conversations with a contractor before accepting their construction bid. 

Frequently asked questions

Still have questions? We have answers. Check out some of the questions we are most frequently asked about construction bids. 

How do you evaluate a contractor’s proposal?

Evaluating a contractor’s proposal should be a holistic process that takes into account the price, scope of work, quality of proposal, and contractor’s reputation. Many people make the mistake of only comparing bid prices, which often leads to subpar work, hidden costs down the line, and other headaches. Instead, evaluate the entire proposal and choose the best one overall. 

How do you review a construction proposal?

When reviewing a construction proposal, pay attention to the defined scope of work and the deadline a contractor has set. You want both to be realistic and comprehensive to your needs. You should also pay attention to the overall quality of the proposal and any in-person meetings or virtual communication you have with a contractor. 

What is bid analysis in construction?

A bid analysis is when a contractor systematically reviews different bids from subcontractors and chooses the best option for their contract. While it doesn’t involve you, the client, directly, you can take inspiration from how a contractor analyzes a bid (i.e., by placing equal emphasis on the quality of the work, scope of work, and price) when deciding which initial construction bid to accept.

JP Carlton

J.P. Carlton

J.P. Carlton is the founder of Carlton Building Services, a Hampton Roads-based construction company.