Module 2: Bids, Estimates & Contracts

Core promise: By the end of this module, you can take a bid request from the first message to a signed contract. You'll collect and compare subcontractor quotes, build a clean proposal from the contractor's numbers, follow up on time, and prepare contracts and purchase orders for signature.

Request → Quote → Proposal → Follow up → Contract → Order

An important boundary: The contractor sets the prices and makes the decisions. Your job is to organize the information, prepare the documents, and make sure nothing falls through the cracks.

In this module

1. The Bid Process and Your Role
2. Reading a Scope of Work
3. Collecting and Comparing Sub Quotes
4. Building the Proposal
5. The Bid Log and Follow-Up
6. Contracts and Subcontractor Agreements
7. Purchase Orders
8. Hands-On Exercises
9. Knowledge Check

Module learning objectives

By the end of this module, you will be able to:

• Describe each step of the bid process and what you do at each one.
• Read a scope of work and write questions that close the gaps.
• Collect subcontractor quotes and compare them side by side.
• Build a complete proposal from the contractor's numbers and proofread it.
• Keep a bid log and send follow-ups on a steady schedule.
• Prepare contracts, subcontracts, and purchase orders for review and signature.

Lesson 2.1: The Bid Process and Your Role

A bid is a chain of small steps, and most of them are admin work. That's good news for you: the contractor does the thinking and pricing, and you keep everything moving.

Lesson 2.2: Reading a Scope of Work

The scope of work is the heart of a bid. It says exactly what the contractor will do, and just as important, what they won't. Most disputes later come from a scope that was vague. Reading it carefully is one of the most valuable things you can do.

What a good scope includes

• Inclusions: the work and materials that are part of the price.
• Exclusions: what is not included, such as appliances or flooring repairs.
• Allowances: placeholder amounts for items not yet chosen.
• Assumptions: conditions the price depends on, such as "existing plumbing is in good condition."

How to spot gaps

As you read, ask: who supplies this, who installs it, and is it included in the price? Any item where the answer isn't clear goes on a list of questions for the contractor. You are not changing the scope. You are making sure it's complete before it reaches the owner.

Example: a scope with gaps

Remodel the Hartley kitchen per the drawings. Includes demolition, new cabinets, quartz countertops, tile backsplash, new lighting, and painting. Plumbing fixtures to be selected.

Notice what's unclear: who pays for the fixtures, whether the permit is included, who hauls away debris, and what "painting" covers. You'll write the questions yourself in the exercises.

Lesson 2.3: Collecting and Comparing Sub Quotes

Before the contractor can price a job, they need quotes from the subs who will do parts of it. You request them, chase them, and organize them.

What to include when you request a quote

• The project name, address, and the contractor's contact.
• The scope for that trade, with the drawings attached.
• The date you need the quote by, and the expected project timeline.
• A request that the quote list inclusions, exclusions, and how long the price is valid.
• A request for their license number and certificate of insurance.

Level the quotes

Quotes rarely cover the same things, so the lowest price isn't always the lowest cost. Leveling means putting the quotes in one table with the same rows so differences are easy to see. The contractor chooses. You make the choice easy to make.

Harbor's price looks lowest, but it leaves out the gas line and the permit fee, so the real cost would be higher. That's the kind of difference your table makes visible.

Lesson 2.4: Building the Proposal

The proposal is the document the owner reads before deciding. It should be clear, accurate, and complete. You build it from the contractor's scope, numbers, and terms.

The parts of a proposal

1. Company information: name, address, phone, email, and license number.
2. Owner and project information: owner names, job site address, date, and proposal number.
3. Scope of work: what's included.
4. Exclusions and allowances: what's not included and the placeholder amounts.
5. Price and payment schedule: the total and when payments are due.
6. Timeline: the estimated start date and duration.
7. Terms: how changes are handled, warranty details, and how long the proposal is valid.
8. Signature lines for the owner and the contractor.

Example: the Hartley payment schedule

Rules about deposits and payment schedules vary by location, so always use the contractor's approved terms. You'll see this same schedule again when you bill the Hartley job in Module 6.

Proofreading checklist

• Owner names and job site address are spelled correctly.
• The payment schedule adds up to the total price.
• The scope matches the contractor's notes and the sub quotes.
• Exclusions and allowances are listed.
• The proposal shows how long it's valid.
• The file is named clearly, for example "Hartley Kitchen Proposal v1."

Lesson 2.5: The Bid Log and Follow-Up

Most bids that go quiet aren't lost. The owner is busy. A steady, polite follow-up wins more work than almost anything else a contractor can do, and it's exactly the task contractors forget.

The bid log

A bid log is a simple spreadsheet with one row per bid. It tells the contractor, at a glance, where every bid stands.

A follow-up schedule

Sample follow-up messages

Day 3
Subject: Your kitchen remodel proposal

Hi Priya and Tom,

I'm following up for Marcus at Ridgeline Builders to make sure you received the proposal for your kitchen remodel. If you have questions about the scope or pricing, I'm happy to pass them to Marcus or set up a time to talk.

Thank you,
[Your name]

About 1 week
Subject: Checking in on your kitchen proposal

Hi Priya and Tom,

Just checking in on the proposal Marcus sent. It's valid through [date]. If you'd like to adjust anything or talk it through, let me know and I'll set it up.

Thank you,
[Your name]

Lesson 2.6: Contracts and Subcontractor Agreements

Once an owner says yes, the proposal becomes a contract. Contractors work with two kinds of agreements.

What these agreements usually contain

• Names and addresses of both parties.
• The scope of work, matching the approved proposal or quote.
• The price and payment terms.
• The schedule, including the start date.
• How change orders are handled.
• Insurance requirements (mainly in subcontracts).
• Warranty terms and signature lines.

Your role

You prepare the document from the contractor's approved template, fill in the details, check it against the proposal or quote, send it for e-signature, and file the signed copy. Common e-signature tools include DocuSign, Dropbox Sign, PandaDoc, and Adobe Sign.

Pre-send checklist

• Names and addresses are spelled correctly.
• The scope matches the approved proposal or quote.
• The price and payment schedule match exactly.
• Dates make sense (for example, the start date comes after the permit is expected).
• Insurance requirements and any attachments are included.
• Signature blocks exist for every party.

Lesson 2.7: Purchase Orders

A subcontract hires a business to do work. A purchase order (PO) orders materials or products from a supplier. It's a short, specific document that leaves no room for misunderstanding about what is being ordered.

What a purchase order includes

• A PO number, so everyone can refer to the same order.
• The date, the supplier, and the project it's for.
• Items, quantities, and prices.
• The delivery date and delivery address.
• A contact person and payment terms.

Example: the Hartley cabinets

Purchase Order #1001
Date: [date]
Supplier: Oakline Cabinets
Project: Hartley kitchen remodel, [job site address]
Items: Kitchen cabinet package per approved drawing: 8 base, 5 wall, 1 pantry; shaker style, white
Price: $11,200
Delivery: [date], to the job site
Contact: Marcus Webb, Ridgeline Builders
Please confirm this order and the delivery date in writing.

Cabinets are a long-lead item, so the order goes in early. After sending a PO, save the supplier's confirmation and compare the delivery date to the schedule. If the date slips, tell the contractor right away.

Lesson 2.8: Hands-On Exercises

Try each exercise on your own first. Then open the self-check answers to compare.

Lesson 2.9: Knowledge Check

Answer each question in your own words, then check yourself.

1. Who sets the price in a bid, and what is your role?
2. Why shouldn't you recommend the lowest sub quote without leveling the quotes first?
3. Name four things every proposal should include.
4. What's the difference between a subcontract and a purchase order?
5. When should you flag a request to the contractor instead of fixing it yourself?

Before you move on

You're ready for Module 3 when you can say yes to each of these:

• I can read a scope of work and list the gaps.
• I can request, chase, and compare sub quotes.
• I can build and proofread a proposal from the contractor's numbers.
• I can keep a bid log and follow up on a schedule.
• I can prepare a contract or purchase order and check it before sending.