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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 Missouri 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 Missouri 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 Missouri Construction Bidding?
State-level credentials and business registration. Missouri does not issue a single statewide “general contractor” license; most contractor licensing is handled by cities and counties. The state offers an optional statewide Electrical Contractor license (available since July 1, 2019); local jurisdictions must accept a valid statewide electrical-contractor license in lieu of a local electrical-contractor license for permitting and work. Plumbing and HVAC/mechanical licensing are set locally (no universal state license programs). There is no separate statewide “solar installer” license; however, grid-tied PV work must be performed by a licensed electrician and local building/electrical permits are typically required. Business entities—domestic or foreign—register with the Missouri Secretary of State (foreign entities generally need a Certificate of Authority) and, if making taxable sales, register for appropriate Department of Revenue tax accounts.
State vendor registration. Vendors that sell products and/or services to Missouri must register in the state’s MissouriBUYS eProcurement system (now “MissouriBUYS, powered by MOVERS”) to receive bid notices and transact with agencies.
Highway and bridge lettings; bid security and final bonds. The Missouri Department of Transportation (MoDOT) advertises lettings on its bidding pages; bids are submitted electronically via AASHTOWare Project Bids/Bid Express. Prime contractors must have an approved Prequalification Contractor Questionnaire on file (generally at least 7 days before the bid opening). A bid guaranty of 5% of the bid (bid bond or acceptable bank instrument) is required. After award, Missouri’s Public Works Contractor Bond statute requires public entities to obtain performance and payment bond security on public-works contracts estimated to exceed $50,000, in an amount set by the public entity (the bond must protect payment for labor, materials, and related insurance).
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 Missouri Construction Bidding Process
- State-level credentials and business registration. Missouri does not issue a single statewide “general contractor” license; most contractor and trade licenses (e.g., plumbing, mechanical/HVAC) are set and enforced by cities and counties such as Kansas City and St. Louis County. Missouri does run a statewide electrical contractor license through the Office of Statewide Electrical Contractors. Grid-tied residential PV work that interconnects to the utility must be performed by/under a licensed electrician; there is no separate statewide “solar installer” license. Out-of-state/transient employers working temporarily in Missouri must register with the Department of Revenue and post a financial assurance instrument (bond/LOC) between $5,000 and $25,000 under §285.230, RSMo. Business entities (domestic or foreign) that transact business in Missouri register with the Missouri Secretary of State and, as applicable, with the Department of Revenue for tax accounts (e.g., sales/use, withholding).
- Building codes and plan review. Missouri has no statewide building code for private construction; codes are adopted and enforced by local jurisdictions (including energy codes). The state may set standards for state-owned buildings, but for most projects you follow the locally adopted I-Codes/IECC as specified by the city/county.
- Environmental and water-resource permits. Land-disturbance activities that disturb one acre or more (or are part of a larger common plan) must obtain coverage under Missouri DNR’s NPDES Construction Stormwater General Permit before soil disturbance. Work in waters and wetlands may also require U.S. Army Corps of Engineers Section 404 authorization and state Section 401 water-quality certification from Missouri DNR. Floodplain development requires permits under local floodplain ordinances administered consistent with Missouri’s State Emergency Management Agency/NFIP guidance.
- Insurance requirements. Missouri requires workers’ compensation coverage for all construction employers with one or more employees, and for non-construction employers with five or more employees (or approval to self-insure). Missouri law does not impose a universal, statewide general-liability requirement on all contractors; liability limits are typically set by owners, lenders, or local licensing authorities.
- Public works bidding and prequalification. For state agency procurements, competitive sealed bidding procedures apply (with formal procedures at $100,000+) under Chapter 34, RSMo, and opportunities are posted in MissouriBUYS, powered by MOVERS; suppliers must register there to receive notifications and respond online. For highway/bridge work, MoDOT posts lettings via its Online Plans Room and uses AASHTOWare Project Bids/Bid Express for electronic bid submission. MoDOT requires prime-contractor prequalification (Questionnaire approved and on file 7 days before bid opening).
- Bid security and final bonds. MoDOT requires a proposal guaranty (bid security)—commonly 5% of the bid—submitted per Section 102 of the Missouri Standard Specifications (project-specific forms provided in the bid book). After award, Missouri’s Public Works Bond statute (§107.170, RSMo) requires payment (and typically performance) bonds on public works; the amount is set by the public entity (many owners require bonds equal to 100% of the contract price).
Missouri Bid Network
Contractors and suppliers looking for State and local work in Missouri track two main platforms:
- MissouriBUYS (powered by MOVERS) — State eProcurement. MissouriBUYS is the State’s web-based eProcurement portal for supplier registration, maintaining company profiles and commodity codes, viewing and responding to online solicitations, and receiving payment/contract documents as the rollout continues. After registering and selecting applicable commodity categories, suppliers receive automatic email notifications when matching opportunities are posted.
- MoDOT Bid Letting via AASHTOWare Project Bids / Bid Express — Highway & bridge work. The Missouri Department of Transportation (MoDOT) advertises lettings on its bidding pages/Online Plans Room, and proposals are submitted electronically through AASHTOWare Project Bids/Bid Express (with electronic bid-bond verification). Prime bidders must be prequalified—a Contractor Questionnaire must be approved and on file at least seven (7) days before the bid opening. Letting schedules, addenda, bid tabs/abstracts, and award information are posted online.
Because MissouriBUYS and MoDOT’s Bid Express workflows are designed for government-to-business (G2B) and business-to-business (B2B) transactions, they do not facilitate direct consumer sales. By registering in MissouriBUYS and keeping company and commodity data current, vendors gain broad visibility into statewide contracting and receive automatic alerts when new opportunities align with their profile.
Succeed in the Missouri Construction Bidding Process
To succeed in the Missouri 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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