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Obtaining an estimate versus a bid for a construction development

| May 21, 2020 | Development |

Whether looking to build on or renovate a piece of Orange County property, it will most likely be necessary to hire a construction contractor. Depending on the size of the planned development, property owners and investors will want either an estimate or a bid for the project. What some newer developers may not realize is there is a difference between the two.

When receiving an estimate regarding the project, a construction contractor may provide a preliminary cost estimate. Even though the contractor will need to provide a fairly reasonable estimate of what the job will cost the customer, it does not necessarily serve as a final commitment to do the work for a particular price. What it does is provide the property owner some numbers to work with.

When receiving a bid regarding a development, the property owner receives a firm commitment from the construction contractor to do the job by a certain date and for a certain price. The bidding process often takes longer than receiving an estimate. However, it will most likely be more thorough since the contractor may not have the opportunity to go back and change things after work begins.

An Orange County property owner may reasonably expect a construction contractor to know his or her business well enough to give fairly accurate estimates that can easily turn into bids for a certain development. It would be advantageous to gain an understanding of what constitutes a good estimate or bid before just signing on the lowest bidder. Saving money on a project is a priority, but not at the expense of quality construction work. Otherwise, the money saved at the beginning could end up being spent in the end correcting issues that should never have arisen in the first place.