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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 Maine 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 Maine 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 Maine Construction Bidding?
In Maine, contractors will need a valid contractor’s license in order to bid on state or federal construction projects. This lets the project owner know that you have the licensing requirements that adhere to state laws.
Most public projects will also require certain surety bonds, such as bid bonds, performance bonds, and payment bonds.
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 rate 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 Maine Construction Bidding Process
- In Maine, contractors are generally not required to hold a state-issued general contractor’s license for most construction work. However, specific tradespeople such as electricians, plumbers, and HVAC professionals must obtain state licenses through the Maine Office of Professional and Occupational Regulation. Additionally, some local jurisdictions have their own licensing or registration requirements.
- Construction projects in Maine must comply with the Maine Uniform Building and Energy Code (MUBEC), which outlines environmental and safety standards appropriate for the state’s climate. Specifically, structures must be designed to withstand heavy snow loads, high winds, and cold temperatures. Coastal areas may have additional requirements related to erosion control and flood zones.
- Projects near wetlands, coastal zones, and other protected environmental areas are subject to strict regulations in Maine. This may involve obtaining additional permits and ensuring compliance with the Maine Department of Environmental Protection (DEP). Federal agencies like the U.S. Army Corps of Engineers may also have jurisdiction over certain projects, especially those impacting waterways or wetlands.
- Maine contractors with employees are required to carry workers’ compensation insurance. While general liability insurance is not mandated by state law for all contractors, it is highly recommended and often required by clients or project owners to protect against potential risks associated with construction activities.
- Maine follows specific public procurement laws for public sector projects, as outlined in the Maine Revised Statutes. These laws typically mandate a competitive bidding process to ensure transparency, fairness, and cost-effectiveness in awarding public contracts. Contractors bidding on public projects must adhere to these regulations, which may include providing bid bonds, performance bonds, and meeting specific qualification criteria.
Maine Bid Network
Visit the State of Maine Division of Procurement Services website at maine.gov/dafs/bbm/procurementservices to see a list of current Maine bidding opportunities and recent awards and bid results. The website publishes procurement solicitations—including bid advertisements, requests for proposals (RFPs), requests for qualifications (RFQs), and requests for information (RFIs)—primarily from government agencies but also from some private organizations. It serves as a Maine government-to-business (G2B) and business-to-business (B2B) network. It is not a business-to-consumer or consumer-to-consumer site.
Succeed in the Maine Construction Bidding Process
To succeed in the Maine 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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