Construction Estimate Versus a Construction Bid

Construction Estimate Versus a Construction Bid

by Proforma Construction Inc, March 25, 2021

Learn what differentiates a construction estimate from a bid.

While customers often use the terms “estimate” and “bid” interchangeably, construction experts assign a distinct meaning to each word.  Each term refers to a different part of calculating the cost of commercial construction in the Bay Area.  Curious to learn exactly what each term means?  Then here’s what you need to know.


Contractors need to know what it will cost to handle the different aspects of a construction project—from the cost of building materials to labor to hiring specialized subcontractors.  Within the broad category of construction estimates, there are different types of estimates that contractors deal with.  For instance, here are some of the types of estimates that contractors will calculate:

  • Preliminary estimate– “ballpark estimate” that allows contractors and customers to determine the feasibility of a project.
  • Square-foot estimate– if a project is deemed feasible, then a square-foot estimate calculates industry-standard unit costs per square-foot of the project.
  • Assembly estimate– more detailed estimate that considers each separate part of a construction project. For instance, this estimate takes into account the cost of foundation work, flooring, roofing, windows, sanitation, etc.
  • Final estimate– the most detailed and accurate estimate. Final estimates require written commitments from partners and subcontractors.  Final estimates form the basis of a bid, or official commitment to your customer.


Following the estimate process, contractors need to make a firm offer to their client.  This offer is known as a bid.  In a bid, the contractor commits to specified construction work at a given price within a given time frame.  If the customer accepts the bid, then the contractor is expected to carry out the work as laid out in the bid.

 When to Use an Estimate?

Estimates help you determine the approximate cost of a construction project and assist clients with budgeting. You can use estimates when you want to manage your client’s expectations by detailing the services that are relevant to their requirements. Estimates are subject to change when your client adds or removes any service.

Generally, an estimate includes:

  • Costs for equipment, labors, subcontractors, and materials
  • The services you will provide so that clients can understand your work and  what each service entails
  • Project scope
  • Exclusions to avoid disputes in future
  • Timelines and completion dates

 When to Use a Bid?

Bids are common in construction contracts, and they offer more details than estimates. Bids are used where the scope of work is clear. For example, an agency looking for contractors to complete a project will detail their requirements and make them available. Contractors will then bid by specifying how much it will cost to complete the project.

Generally, sub-contractors will submit bids to a general contractor for completing a specific part of the project. Once a bid is submitted by a contractor or sub-contractor, the final cost of the project won’t deviate much, provided the cost of unforeseen problems is also included.

This is the difference between a construction estimate and a construction bid.  Do you have more questions about your commercial construction in the Bay Area?  If so, then contact your Pleasanton contractor at Proforma Construction.  Serving Pleasanton and the surrounding California area, our highly-trained team is ready to make your commercial construction dreams a reality.