Winning work in the construction world is extremely tough. It’s not uncommon for a large construction project to have dozens of bids on the table. In the eyes of the project owner, comparing several contractors with the lowest pricing feels like comparing apples to apples. Proposals that are professionally written can make the difference between winning and losing a construction job, especially when competition is fierce.
In this article, learn how to customize a construction proposal template that you can use when participating in bids. We also included a list of free template resources that you can download, and customize to suit your needs.
Proposal for Construction Projects: What Is It?
Construction companies participate in various bidding processes to fill their pipeline. They submit a project proposal, or a detailed plan, and try to stand out from other companies that want to work on the same project.
They do this by accurately informing the client of the requirements, timeline, conditions, and expenses necessary to complete the project. The contractors would look into a project’s specifications and objectives. Then, they come up with a cost estimate that factors in their direct and indirect costs such as subcontractor quotes, labor, taxes, profit markups, and overhead.
Benefits Of Using A Construction Proposal Template
Drafting a construction project proposal from scratch is tedious and time-consuming. A ready-to-use proposal template not only makes it easier to create proposals but it offers other advantages such as:
Having the opportunity to make a good first impression. Project owners are more likely to trust companies that look well-organized.
Making your company look more professional.
Reducing the time it takes to respond to proposal requests and bid notices.
Standardizes what exactly goes into every proposal thus ensuring that no information is left out regardless of who writes it.
What to Include in your Proposal for Construction Projects
Communication is key in construction. An effective proposal covers important information and shows your clients how prepared you are for the job. These are the key elements that you must include in all your project proposals.
It's important to list the contact information for both the construction company and the potential customer at the top of the document for immediate visibility when reviewing the proposal.
The following information needs to be included:
Project Owner’s Name and Designation
Client Contact Numbers & Email Address
Your Company Information
Your Company Representative’s Name
Job or Proposal Tracking Number
It’s important to get as detailed as possible. Be sure to write out the extent of work, and services you will be rendering. Begin this section by writing a project brief that summarizes the project background and requirements. Then, articulate how you intend to meet the client's objectives by laying out your project activities, deliverables, responsibilities, labor requirements, equipment, and procedures for completing the job.
Here’s an example of a project scope template by Big Rentz:
In the project schedule, you need to outline how you intend to accomplish the project’s work scope and note the milestones that help measure how far along the project is. The schedule should stipulate a start and target completion date. List out work-specific activities, how long they’re going to take, and their sequence. To minimize schedule-related liabilities such as delays due to adverse weather, you should include risk reduction clauses in this section.
As part of the bidding process, you will likely have a few occasions to visit the site while preparing your proposal. Based on your site evaluation, make sure to explain in writing what impact these existing conditions have on your project scope, who handles such responsibilities, and outline your risk mitigation plans for such.
Cost Breakdown and Fees
This is where you show the project owner how much it would cost to carry out the construction of their project. Your cost estimate should itemize each line item plus cost subsections such as materials, labor, equipment, taxes, permits, bonds, and other relevant fees.
Be upfront with all your direct and indirect costs because the goal here is to avoid disputes and financial problems deep into the project schedule. Failure to accurately compute your cost estimate could sink your profit margins into negative territory.
This section is where you need to be as thorough, and proactive as possible. Use this section to lay out what costs would be incurred should the project go over the scope and other risk mitigation clauses.
Here’s a sample calculation with fictional numbers using the template by Big Rentz:
Be clear about the payment timeframe, deadlines, and intervals you require. It’s common practice to use milestones or project completion percentages as a basis for payment intervals. Also, make sure to list what payment methods your company accepts, and to whom the invoice must be addressed.
Limitations & Exclusions
While being specific about what is within scope is a requirement, it's also equally crucial for a client to understand what’s not included within your scope to prevent false expectations and liabilities. Include what work other parties will perform that you won't be responsible for, such as work performed by other trades. Relevant Documentation
A construction project will normally involve various parties that manage different aspects of the project. This section aims to delineate the responsibility of each stakeholder to help prevent confusion and increase the overall accountability of everyone involved. Be sure to list out all the parties involved in your project, who the authorized representatives are, and their contact information.
A proposal should always include signature fields to signify your client’s acceptance of the proposal. Be sure to add your representative’s signature on the proposal as well.
3 Tips for Creating an Effective Proposal
A professional project proposal not only looks impressive but also helps you stand out from the competition. Go the extra mile, and take note of these tips that could help give you that winning edge.
Personalize Your Proposal
Not all projects are awarded solely on being the lowest bidder. Use your proposal as a medium to impress your clients. Personalizing your proposal goes beyond changing fonts, and writing your client’s names on the proposal document.
To set yourself apart from the competition, you need to hyper-personalize your proposal.
a. Customize Your Cover Letter
Your custom cover letter should articulate why your company is the best fit for the job at hand. Stay away from generic templates and take time to review the project requirements. But make sure you don’t overdo this portion. You want to sound convincing but not pushy.
b. Showcase Similar Projects You’ve Done in the Past
Another great way to personalize your proposal is by showcasing similar projects that you’ve completed in the past. Social proof helps to establish your credibility and will hopefully, gain the trust of your prospective client.
Include a Tracking Number
This may sound basic but it’s often the small details that add up to make a great proposal. There may be instances where different versions of a proposal were submitted due to revisions or adjustments. You want to make sure that you and your client are looking at the same proposal whenever discussions are taking place.
Double Check Your Proposal Details
They say that the best course of action for bid errors is to never make one in the first place. Clerical and computational errors not only put you at severe risk, but it also damages your credibility as a business.
Errors in your proposal, even small ones, raise red flags that could affect your chances of winning the work. That being said, you want to first make sure that your takeoffs are detailed, comprehensive, and accurate. Aside from double-checking your estimates, have one or two people review the proposal before it gets sent out to make sure all bases are covered and verified. Finally, take time to proofread the proposal and make sure that grammar and spelling are on-point.
Free Construction Proposal Templates
In a pinch to create a proposal? We’ve rounded up a list of free construction project proposal templates that you can download now. Remember to always customize by adding a personal touch to your project proposals.
When responding to proposal requests, time is of the essence. Although templates help write faster proposals, it does little in helping you come up with an actual estimate, which is one of the most time-consuming parts of a proposal.
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