1. A clear scope of the work to be done. This should be as specific as possible, meaning that the sub works from a good set of plans, and initials each page of the plans on which their proposal is based.
2. Anticipated start and completion dates, along with requirements for advance notice.
3. Insurance provisions: who is providing coverage and for what.
4. The bid price: how and when it is to be paid (the draw schedule). How long the bid will hold.
5. Conditions that require withholding all or partial pay. Such conditions would be if you have a retainage with a bank you should pass that on to subs that require sign off on final inspections. Normally, this is not more than 10%. Also, a bank can be negotiated with on their retainage.
6. How change orders will be handled.
7. Clean up responsibility!

After bids are in, you need to review them carefully, and make sure they have all of the items listed above. Once you have 3 bids with these items on them, make a comparison sheet for the bids, and summarize the line items.

By doing this you get a clear idea of how "comparable" two (or more) bids really are. Money is not the only thing you need to compare. For example, while the price of one bid for insulation might be $2,000, and the price of another $4,000, it doesn't mean the bids aren't comparable. If the $2,000 bid only covers the bare minimum, and uses inferior products, the $4,000 bid might be a better value because it might include wrapping the house in a vapor barrier, insulating all windows, cutouts, and intrusions, and insulating the basement ceiling.

It is very important to know that the best price is not always the best deal. When comparing bids, make sure you do it accurately and completely. Consider what the quality of the materials being used is? Will the sub be able to meet your time-frame? What upgrade options are available? Are the bids for the exact same items, or does one bid include extras (like insulating the garage as well as the house)? There are plenty of questions to ask, and options to consider when comparing bids. For example, one bid for insulation might include insulation for sound as well as heat, while another is just heat. So, you have to make sure when comparing prices that the work is comparable.

If you do the research, and know what an appropriate budget for the project is, then if you find a sub you want to work with that doesn't meet your budget, you can talk to them and say that you think it can be done for a certain amount, and see if there is anyway they can resubmit their bid to fit within your budget.

It really pays to follow up your bids and negotiate. So, to be a good negotiator, and get the best price for the best value you always should do the following:

1. Compare bids line by line as we talked about.


2. Choose a preferred subcontractor (even if they don't meet your price)


3. Call them, tell them you want to work with them, but only have _____ amount of money to devote to that item.


4. Ask if they can do it for that.

If you never ask, you will never know. Subs want to make as much money as possible, and you want to pay as little as possible, so when it comes to negotiating you want to make both parties happy. It can be done.