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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 Illinois 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 Illinois 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? 

1. Bid Solicitation: This is when the project owner or general contractor invites contractors to submit bids. 
2. Bid Submission: Contractors prepare and submit their bids with all necessary details, such as pricing, scope of work, and deadlines. 
3. 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. 
4. Contract Formation: Once the project owner chooses a bid, they will set up a contract with the winning contractor. 
5. 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 Illinois Construction Bidding? 

Illinois does not issue a blanket “general contractor” license at the state level, but specialty trades are regulated. For example, roofing contractors must hold a license from the Illinois Department of Financial & Professional Regulation (IDFPR) under the Roofing Industry Licensing Act. Highway and bridge bidders must be prequalified by the Illinois Department of Transportation (IDOT) and obtain an annual Certificate of Eligibility before they can receive an “Authorization to Bid.” All firms must register for an Illinois Business Tax (IBT) number/Certificate of Registration with the Department of Revenue before doing business with the State. 

Under the Illinois Procurement Code, state agencies (and most local public bodies) require a bid bond or other bid security (typically 5% to 10% of the bid price) to accompany sealed bids. The security is forfeited if the low bidder refuses to enter a contract. 

Illinois’ Public Construction Bond Act obligates the successful bidder to furnish performance and payment bonds equal to 100 % of the contract price. 

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 Illinois Construction Bidding Process 

1. State-level credentials and business registration. Illinois does not issue a statewide “general contractor” license. Instead, home-rule municipalities (e.g., Chicago, Rockford, Peoria) license or register general contractors individually. Specialty trades are licensed at the state level. Contractors that sell taxable materials or services must obtain an Illinois Business Tax (IBT) number/Certificate of Registration from the Department of Revenue to collect and remit sales & use tax. Bidders on state or local highway/bridge work must be prequalified and hold a Certificate of Eligibility from the Illinois Department of Transportation (IDOT) before they can receive an “Authorization to Bid.” 
2. Building codes and plan review. Illinois is a home-rule state, so most jurisdictions adopt and amend the International Building Code (IBC) and International Residential Code (IRC) locally. State-funded vertical construction follows Capital Development Board (CDB) rules. A statewide Illinois Energy Conservation Code—based on the 2021 IECC with Illinois amendments—took effect January 1, 2024, for all new permits. Local amendments may add requirements for seismic design in southern Illinois or highwind design along Lake Michigan. Always verify the current code set and amendments with the authority having jurisdiction. 
3. Environmental and water resource permits. Construction sites that disturb one acre or more must file a Notice of Intent (NOI) and operate under the IEPA’s General NPDES Permit for Construction Site Activities. Work in floodways, public waters, or wetlands may require permits from the Illinois Department of Natural Resources–Office of Water Resources (IDNROWR) and Section 404/401 approvals from the U.S. Army Corps of Engineers. Additional environmental reviews may be required if a project lies within a protected habitat or impacts threatened species. 
4. Insurance requirements. Under the Illinois Workers’ Compensation Act, every employer with one or more employees must carry workers’ compensation insurance—no minimum-hour exemption. Illinois does not mandate statewide general liability insurance for all contractors, but many public owners, lenders, and municipalities make it a condition of bid prequalification or permit issuance (e.g., Chicago requires $1 million CSL for licensed general contractors). Maintaining GL and excess liability coverage is, therefore, functionally necessary to secure most construction contracts. 
5. Public works bidding and prequalification. State-funded projects are governed by the Illinois Procurement Code (30 ILCS 500), which requires competitive sealed bidding for construction contracts exceeding $100,000 and public notice in the Illinois Procurement Bulletin.  
6. Bid security and final bonds. A bid bond (usually 5–10% of the bid price) is required with most sealed bids. The Public Construction Bond Act (30 ILCS 550) obligates the awardee to post performance and payment bonds equal to 100% of the contract price. Effective January 1, 2024, through January 1, 2029, the statutory threshold triggering these bonds is temporarily increased from $50,000 to $150,000 under P.A. 103570; public bodies may still require bonds below that amount by ordinance or resolution.  

Illinois Bid Network 

In Illinois, contractors and suppliers looking for public-sector opportunities rely on BidBuy—the State’s eprocurement portal—and the suite of Illinois Procurement Bulletins (General Services, Construction, and Higher Education). These official platforms list open and archived solicitations, award notices, bid results, and related documents in one searchable location, streamlining vendor interactions with state agencies, universities, and many local governments. 

All postings—whether Invitations for Bid, Requests for Proposals (RFPs), Requests for Qualifications (RFQs), or Requests for Information (RFIs)—must follow the Illinois Procurement Code (30 ILCS 500), which mandates public notice in the Procurement Bulletin and sets minimum advertising times to ensure open, fair, and competitive bidding.  

Prospective vendors can monitor BidBuy and the relevant Bulletin for detailed project descriptions, submittal instructions, evaluation criteria, and statutory references. Because these systems are designed exclusively for government-to-
business (G2B) and business-to-business (B2B) transactions, they do not support consumer-facing sales. By registering in BidBuy (linked to the Illinois Procurement Gateway) and keeping their vendor profiles current, firms gain full visibility into statewide contracting opportunities and award data while remaining compliant with Illinois procurement regulations.  

Succeed in the Illinois Construction Bidding Process 

To succeed in the Illinois 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. Contact us today for a quote. 

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