Pricing the Bid

Turn quantities into a price that wins work and makes money — not one or the other.

Build the number up

1. Material — quantities × unit cost (get current supplier quotes).
2. Labor — hours × fully-burdened labor rate (wages + taxes + workers' comp + benefits).
3. Equipment — rental/ownership, fuel.
4. Subcontractors — their quotes, scope-checked.
5. Overhead — your business costs (office, insurance, truck, software) spread across jobs.
6. Profit — your margin for risk and reward.

Markup vs. margin (don't get this wrong)

A 20% markup on cost is only a ~16.7% margin of the sell price. To make 20% margin, divide cost by 0.80 (markup ≈ 25%). Mixing these up quietly erases profit.

Contingency

Add contingency for unknowns and risk (tight schedule, vague scope, new client). Price the risk you're taking, not just the materials.

Takeaway: Build the price up — material, burdened labor, equipment, subs, overhead, profit — and never confuse markup with margin (20% markup ≠ 20% margin); add contingency for the risk you're taking on.

Educational overview — bid requirements vary by owner and jurisdiction; always follow the specific invitation-to-bid and instructions to bidders.