How to compare contractor bids

Before looking at the totals, list what each bid actually includes: demolition, preparation, materials and their grades, permits, disposal, site protection, cleanup, and warranty. A bid that includes permits, disposal, and a named material grade is a different project than one that leaves them out.

A lower total that excludes permits and disposal can end up costing more than a higher total that includes them.

Put the bids side by side and match line items across them. Gaps will jump out quickly:

• An item present in one bid and missing from another
• A firm price in one bid vs. an allowance in another
• Named brands and model numbers vs. generic descriptions
• One bid bundling several trades into a single lump sum

An allowance is a placeholder budget, not a commitment. If one bid carries a $3,000 flooring allowance and another prices specific flooring at $5,500, the bids are not directly comparable until you know what the allowance would realistically cover for the material you actually want.

Once you know where the bids differ, send each contractor the same short list of questions: what is included in demolition, who pulls permits, what happens if hidden conditions are found, what the payment schedule is, and what the warranty covers. Their answers make the bids comparable — and tell you a lot about how each contractor communicates.

A meaningfully lower bid deserves the same scrutiny as a high one: it may reflect a leaner scope, lower-grade materials, or optimistic assumptions that surface later as change orders. The goal of comparing bids is not to find the cheapest number — it is to understand what each price actually buys.