Arkansas Construction Bidding Process

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Surety Bond Professionals is a family-owned and operated bonding agency with over 75 years of experience. With access to a broad range of surety markets, our expert agents are ready to assist with all of your construction bond needs.

What is the Bid Process in Construction?

The construction bidding process involves five steps: bid solicitation, bid submission, bid selection, contract formation, and project delivery. For a contractor in Arkansas to achieve success in the construction bidding process, you need to plan and improve in each of these areas.

If you’re a new contractor or are looking to secure more bids more often, follow our guide below.

What Should a Construction Bid Include?

Successful construction bids generally contain the total cost of building the structure, including expenses for subcontractors, general contractors’ costs, overhead profit, and scope of work. A bid will also need to contain information such as company details, the date, a clear definition of the work, and a project name. Without all of these elements combined, you may not meet the necessary standards.

How Do You Estimate a Construction Bid?

An accurate estimate is not only vital for winning a bid but it can also determine which Arkansas Construction bonds you may need. A professional estimate will include:

Direct costs: This includes materials, labor, and equipment expenses tied directly to construction activities.
Indirect costs: Consider costs that don’t involve direct construction work, like permits, utilities, security, quality control, administration, and legal fees.
Labor hours: Wages paid to construction teams should be factored in, including potential overtime.
Subcontractor expenses: Don’t forget to calculate costs associated with hiring subcontractors for specialized tasks like plumbing, electrical work, or HVAC installation.

What Are the Five Steps in the Process of Bidding?

Bid Solicitation: This is when the project owner or general contractor invites contractors to submit bids.
Bid Submission: Contractors prepare and submit their bids with all necessary details, such as pricing, scope of work, and deadlines.
Bid Selection: The owner of the project will look over bids, including the contractor’s costs, qualifications, and the scope of work suggested. Based on this information, they will choose a bid they believe is best.
Contract Formation: Once the project owner chooses a bid, they will set up a contract with the winning contractor.
Project Delivery: At this phase, the contractor will begin work on the project and secure any further surety bonds they may need.

What Licenses and Bonds Do You Need for Arkansas Construction Bidding?

In Arkansas, contractors bidding on state-funded public construction projects must adhere to specific licensing and bonding requirements to ensure compliance with state regulations. Any contractor bidding on projects valued at over $20,000 is required to hold a valid contractor’s license issued by the Arkansas Contractors Licensing Board.

For projects exceeding $50,000, contractors must provide a bid bond, which serves as a financial guarantee that the bidder will honor the terms of the bid if awarded the contract. Additionally, once a contract is awarded, performance and payment bonds are typically required to protect the project owner and ensure that subcontractors and suppliers are paid. These requirements promote accountability and safeguard the interests of all parties involved in public construction projects.

It’s imperative to work with a professional surety bond agency, like Surety Bond Professionals, that knows how to secure bonds successfully at the best price so you can submit a competitive bid.

Common Mistakes Made While Bidding

Even a well-prepared contractor can be rejected for a bid. Some common reasons this might happen are:

Incomplete documentation, such as proof of bonds and licenses.
Inaccurate cost estimates, where your estimate is much higher or lower than average.
Lack of experience, unproven track record.
Simple mistakes, like not following the guidelines for the bid strictly or missing paperwork.
Ambitious timelines, if your proposed timeline does not align with the average timelines submitted you may face rejection.

State vs. Federal Bids?

Understanding the difference between state and federal bids can help you stay compliant when you submit your bid.

Topic	State	Federal
Procurement Laws and Regulations	State-specific procurement laws and regulations, varying by state.	Must comply with the Federal Acquisition Regulation, which is stricter and more rigorous.
Bonding Requirements	Often need state licensing and bonds like bid bonds and performance bonds.	Also needs bonds but is often required from a federally approved surety company.
Project Scope	Projects can range from small repairs to large public works in a specific area.	Contracts can be large-scale, spanning multiple states.
Set-Aside Programs	Some states have set-aside programs for small businesses, minority-owned, or veteran-owned businesses, but this varies.	The federal government has many set-aside programs for small businesses, veteran-owned, women-owned, and disadvantaged businesses through programs like 8(a) or HUBZone.
Competition	Often limited to nearby areas, reducing competition.	Open to contractors nationwide, increasing competition and opportunities.

Unique Aspects of the Arkansas Construction Bidding Process

In Arkansas, most construction work requires a valid contractor’s license issued through the Arkansas Contractors Licensing Board. Contractors must hold an active license before offering, bidding on, or performing construction services for projects exceeding $20,000. Specific trades, such as electrical or plumbing, may require additional specialized licenses. Local municipalities, such as Little Rock or Fayetteville, may also impose permitting or registration requirements, so contractors should verify local rules and regulations before starting any project.
Construction in Arkansas must comply with applicable building codes, which are often based on the International Building Code (IBC) and the International Residential Code (IRC). Local jurisdictions frequently modify these codes to address specific conditions, such as extreme weather or soil stability issues. While Arkansas does not enforce a universal statewide energy code, various municipalities or agencies may adopt energy-efficiency standards that contractors must adhere to.
Projects near wetlands, floodplains, or waterways in Arkansas may fall under the jurisdiction of the Arkansas Department of Environmental Quality (ADEQ). Depending on the project’s scope and its potential environmental impact, additional permits, studies, or inspections may be required. Federal agencies, such as the U.S. Army Corps of Engineers, may also have authority over certain activities affecting navigable waters or wetlands, necessitating compliance with federal regulations.
Under Arkansas law, employers with one or more employees are generally required to provide workers’ compensation insurance, subject to specific exemptions. While the state does not mandate general liability insurance for all contractors, carrying such coverage is strongly recommended and often required by project owners or lenders. Comprehensive insurance policies help mitigate financial risks related to accidents, property damage, or other liabilities and are frequently a prerequisite for securing contracts.
Public contracting in Arkansas is governed by state procurement laws, which establish competitive bidding requirements for public projects exceeding monetary thresholds. For projects valued at over $50,000, contractors must meet qualification standards, adhere to prescribed bidding procedures, and provide required bonding, such as bid, performance, and payment bonds. Contracts are typically awarded to the lowest responsible and responsive bidder, although factors such as experience, qualifications, and compliance with project specifications may influence the selection process.

Arkansas Bid Network

In Arkansas, contractors and suppliers seeking public construction bidding opportunities can explore the BidNet Direct portal or the bid index on the Arkansas .gov website. These platforms provide a comprehensive list of public procurement solicitations, including bid advertisements, Requests for Proposals (RFPs), Requests for Qualifications (RFQs), and Requests for Information (RFIs), as well as information on recent awards and bid results. These systems align with Arkansas’s competitive bidding laws, ensuring compliance with procurement statutes and promoting transparency in government-to-business (G2B) transactions.

Prospective bidders can use these portals to access opportunities from state agencies, municipalities, school districts, and other public entities seeking qualified vendors. Each solicitation includes detailed project descriptions, submission guidelines, and legal requirements, enabling bidders to understand the scope of work and adhere to state procurement regulations. While these platforms are dedicated to G2B engagements, they do not support business-to-consumer or consumer-to-consumer transactions, maintaining a focus on public and institutional procurement activities.

Succeed in the Arkansas Construction Bidding Process

To succeed in the Arkansas construction bidding process, you need accurate estimates and documentation as well as a solid grasp of the requirements and nuances of state vs federal bids. However, one of the most important components of your bid is securing the right surety bonds, such as bid bonds, performance bonds, and payment bonds. When you choose a reliable surety bond agency, you can feel confident that your bond will meet all legal and regulatory requirements. At Surety Bond Professionals, we know the challenges you may face and are here to support you with all your bond needs.