What Is a Bid Proposal?
A bid proposal is a formal document that a contractor submits to a potential client. The proposal expresses interest in a specific project, outlining the contractor’s expertise, experience, and resources. It can serve as the basis for the final contract between the contractor and the client if they win the right to undertake the project.
What Should a Bid Proposal Include?
The bid proposal covers several critical pieces of information:
- Background of the contractor
- Proposed scope of work on the project
- Detailed budget
- A payment schedule
- Other terms, including how any disputes will be resolved
The bid proposal is a detailed summary of what the contractor offers and what the client should expect if the bid is successful.
How to Write a Bid Proposal
Writing a clear, professional bid proposal can help you stand out in a competitive field. Whether you’re responding to a request for proposal or submitting a pitch for a private project, following a structured process ensures you include everything a client needs to make a decision. Follow the steps below to build a strong proposal that showcases your skills, outlines your plan, and explains your pricing.
1. Gather Project Details
Start by outlining the specific services you’ll provide. Include all phases of the project, from start to finish. Talk to your team to ensure nothing important is missed.
For example, a home renovation bid might include:
- Demolition and debris removal
- Construction and finishing work
- Site cleanup after completion
- Subcontracted tasks like electrical upgrades or asbestos removal
Even if you’re outsourcing certain work, note that you’ll take responsibility for completing those tasks as part of the full scope.
2. Write a Clear Project Scope
Define the timeline and boundaries of the work you’ll complete. Break down the project into key milestones and include estimated timeframes for each.
Example – Playground project:
- Remove old structures – one week
- Level ground and prepare site – one week
- Build new equipment – one week
Also note any exclusions, such as: “This proposal includes playground equipment installation but excludes fencing.”
If relevant, include:
- Quality checks at key stages
- How and when you’ll share progress updates with the client
Listing what’s not included in your scope helps manage expectations and avoid confusion.
3. Outline Your Qualifications
Show the client why you’re a strong choice for the job. Include:
- Basic info: Company name, address, website
- Credentials: Licenses, certifications, years in business
- Insurance: Coverage details, limits, and exclusions
- Team structure: Note any subcontractors or partners involved
You can also include a short list of completed projects with names, locations, and dates to build trust. If you’re a newer contractor, it’s okay to skip this section or keep it brief. Double-check the client’s bid requirements, they may require specific licenses or insurance levels.
If your bid involves a building or renovation project, consider pairing it with our construction contract template to finalize terms with the client.
4. Provide an Accurate Cost Estimate
Include a total estimated project cost and a summary of what that cost covers. The summary might reference categories of labor costs, equipment rental, supplies, and materials. You can also add a detailed cost breakdown with amounts of each line item.
Before you begin to put together your budget, check the tendering documents from your potential client. The client might require all bids to include detailed budget breakdowns.
Besides a cost estimate, you should include your proposed payment timeline. Consider whether you will be paid in installments as certain parts of the project are completed or whether payment will be due on a specific date. You can outline procedures for approving cost overruns in the event that your project exceeds original budget projections.
5. Add Legal Terms and Deadlines
Set clear legal terms to protect your business and manage expectations. Include:
- Proposal expiration date: Limit how long your proposal is valid to avoid outdated pricing or terms.
- Change and dispute guidelines: Define how changes to the project scope will be handled and propose timelines for resolving disagreements—ideally through mediation, not court.
- Basic contact info: Double-check that your contact details, the client’s information, the project name, and bid reference number are all accurate, especially for larger clients with multiple teams.
If you’re hiring subcontractors, use a service agreement template to outline responsibilities and expectations.
6. Review and Submit
At this final stage, you can read back the whole bid proposal. You can use the Legal Templates preview function to easily make a document for review. Carefully reflect upon all of the terms you have put forward, as a bid proposal will be legally binding if the bid is accepted. You might ask other members of your team to review the proposal for accuracy before entering the tendering process.
Sample Bid Proposal
If you’re wondering what a bid proposal looks like, check out this sample, which you can customize with our document editor.
