title: "How to compare contractor bids" h1: "The cheapest bid is not always the cheapest job" description: "Ask three contractors to price the exact same project and you will probably get three different numbers."
Ask three contractors to price the exact same project and you will probably get three different numbers.
That does not necessarily mean one contractor is expensive and another is cheap.
One may have included demolition. Another assumed you would handle it. One may be using a better material. One may have allowed three days while another expects five. One may want a larger margin. Another may simply want the job.
The number at the bottom is only useful after you know what is inside it.
Comparing totals is easy. Comparing what those totals actually buy is the hard part.
Here is how to line them up.
1. Get three bids for the same job
Two bids give you two opinions. If they are far apart, you still do not know which one is unusual.
Three gives you a middle.
You usually do not need more than three or four bids. Bidding is unpaid work, and contractors remember who repeatedly asks them to price jobs but never hires them. Do it often enough and you develop a reputation as someone who collects numbers rather than awards work. Good contractors eventually stop bidding, respond slower, or give your estimate less attention, because they have learned the odds of getting the job are low.
Every bid you ask for spends a little bit of your credibility. Ask for enough to make a good decision, but not so many that contractors stop believing there is a real job to win.
More importantly, give everyone the same scope.
If one contractor prices quartz, another prices granite, and the third assumes countertops are owner supplied, you do not have three bids for the same job.
You have three different jobs.
2. Ignore the totals for a minute
Before deciding who is cheapest, take the bids apart.
Contractors rarely write proposals the same way. One may send a detailed spreadsheet. Another sends four paragraphs and a price. Another has exclusions buried on page three.
For every part of the job, identify:
- what is included and separately priced
- what is included but not separately priced
- what is optional or an add on
- what is not mentioned at all
The fourth category is usually where the money is hiding.
It is easy to compare two numbers that are written down.
The expensive part is noticing the number that is missing.
And do not combine separate items just to make the comparison cleaner. If gas to the generator is $3,500 and gas to the pool heater is $3,500, keep them as two separate lines.
The point is not to make the bids look alike.
The point is to expose where they are different.
3. Put the same work on the same row
This is where the bids finally become comparable.
Put demolition across one row. Dumpster and haul off across another. Flooring, ceilings, paint, permits, cleanup, material allowances. Each gets its own line.
Then the differences become obvious.
Maybe two contractors included demolition and the third did not.
Maybe two included ceiling repairs and one specifically excluded them.
Maybe one bid includes paint while the other two expect you to buy it.
Suddenly a $15,000 price difference may turn into a $3,000 price difference.
The lower contractor was not necessarily cheaper. He may simply have quoted less work.
That distinction matters.
Some of the most common gaps are also the least glamorous:
permit fees, demolition, haul off, dumpsters, allowance amounts, dust protection, daily cleanup, final cleaning, subfloor repair, drywall patching, ceiling repair, code upgrades triggered by the work, and who is actually supplying the materials.
None of these are unusual.
They are simply the things everyone assumes someone else included.
And assumptions are where change orders come from.
4. Ask about the gaps, not the contractor's margin
Once the bids are lined up, make a short question list for each contractor.
Ask:
"What does this price include, and what does it leave out?"
Not:
"Why are you charging this much?"
You need to understand the scope, not audit the contractor's business.
Most residential contractors are not going to give you their labor cost, material cost, overhead and profit structure, and asking for it can turn a normal clarification into a negotiation before you have even hired them.
Also, never use one contractor's bid to interrogate another.
Do not say, "The other guy included this."
Do not send someone else's pricing.
Do not ask a contractor to beat another contractor's number.
You are trying to understand his bid, not make contractors bid against information they gave you privately.
And read the entire proposal before asking questions. If page two already says permits are included, asking whether permits are included tells the contractor you did not read his bid.
If something is listed as an option, it is already telling you it is not included in the base price. Ask what the option covers or what it would cost, not whether it is included.
5. Fix the bid before you sign it
A contractor can tell you something during a walkthrough.
It can be on the architectural plans.
Everyone in the room can agree that it is obviously part of the job.
But if the proposal does not include it, you should not assume the price does.
Before accepting a bid, get important clarifications added to the proposal in writing.
Because once the work starts, the conversation changes.
Before signing, the question is:
"Is this included?"
After signing, the question becomes:
"Who is paying for it?"
That is why comparing bids correctly is not really about finding the lowest number.
It is about finding the true number.
The rule to remember
Never compare the bottom line until you have compared the lines above it.
Three contractors can bid the "same job" and still price three different jobs.
Your job is to make them the same before you decide who is cheaper.