Guide

How Property Owners Should Compare Contractor Bids

By Curtis Holder, BidCraft · Last updated September 30, 2026

The lowest number is not automatically the best bid, and the highest is not automatically the safest. Bids can only be compared once they cover the same work. The process of making them comparable is called bid leveling.

Before you request bids

• Write one scope and send it to everyone. If each contractor describes the job in their own words, you'll get prices for different jobs. See what to include in a scope of work.
• Ask for the same format. A simple bid form with the line items you want priced, plus required fields for exclusions, allowances, schedule and payment terms.
• Invite enough bidders. Three is a common rule of thumb for getting a sense of the market; more for larger or specialized work.
• Give everyone the same information and deadline, and answer questions in writing to all bidders, not just the one who asked.

Level the bids

Put the bids side by side in a spreadsheet with one row per scope item and one column per contractor. Then work through:

1. Inclusions. Does each bid cover every scope item? Mark gaps.
2. Exclusions. Read them closely. A bid that excludes permits, disposal or repairs to hidden damage is not comparable to one that includes them.
3. Allowances. If one contractor carries a fixture allowance at a much lower amount than another, the lower bid may simply be pushing cost into a future change order. Normalize allowances to the same amount.
4. Quantities. Where bids show quantities, compare them. Large differences suggest someone misread the drawings.
5. Materials and specs. Confirm each bid prices the specified products or an approved equal.
6. Schedule. Start date, duration, and what the contractor needs from you to hold it.
7. Payment terms. Deposit size, milestone schedule, and retainage if any.
8. Warranty. Length and what it covers.

Once gaps are priced in and allowances are equal, you have a like-for-like comparison.

Question the outliers

If one bid is well below the rest, ask the contractor to walk you through it before celebrating. They may have a genuine efficiency, or they may have missed scope, misread a quantity, or planned to recover the difference through change orders. A bid well above the rest may reflect a risk the others didn't price, or simply a contractor who is busy. Ask in writing and keep the answers.

Don't share one contractor's prices with another to drive the number down. It damages trust, and many contractors will stop bidding your work.

Check the contractor, not just the price

• License. Verify it with your state's contractor licensing board and confirm it covers the type of work.
• Insurance. Ask for a certificate of insurance for general liability and workers' compensation, issued by the agent, and consider asking to be named as an additional insured on commercial work.
• References and recent work of a similar type and size.
• Who does the work. Their own crews or subcontractors, and who supervises on site.
• Communication. A contractor who answers questions clearly during bidding is more likely to do so during the job.

Red flags

• No written bid or contract, or pressure to sign immediately.
• A large upfront payment in cash, or payment far ahead of work completed.
• Vague line items ("Materials and labor — $X") that can't be compared.
• Reluctance to provide a license number or certificate of insurance.
• A suggestion to skip required permits.

Decide on value

With leveled bids in hand, weigh price alongside scope completeness, schedule, credentials, warranty and your confidence in the contractor. Put the chosen bid, the scope and any clarifications into the contract, and tie payments to verified milestones rather than dates.

Comparing bids on BidCraft

On BidCraft, property owners post a project once and contractors submit structured, line-item bids against it, so bids arrive in the same shape and can be compared line by line; AI bid analysis flags scope gaps and pricing that looks out of line. For payments worth protecting, the optional Verified Completion add-on sends a licensed inspector to document a milestone with a photo checklist and signed certificate before payment is released. If you'd rather have someone run the process, start with Project Help.