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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 New Mexico 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 New Mexico 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 New Mexico Construction Bidding?
New Mexico requires a statewide contractor’s license from the New Mexico State Contractors Board (NSCB) for most construction over $1,000. However, there’s a limited “handyman” exemption below that amount, which applies only if no permit is required and no electrical, plumbing, HVAC/refrigeration work is involved. Note: every New Mexico contractor license must carry an NSCB license bond (amount set by the Board, typically $1,000–$500,000 based on monetary limit and other factors).
Solar installations. New Mexico does recognize solar as a specialty. Photovoltaic installers must also hold a New Mexico OSHA PV Installer license in addition to the appropriate contractor license. Local building/electrical permits are required.
Core trades. Trade contractors (electrical, plumbing and heating, and refrigeration and air conditioning) are licensed by the NSCB under specific classifications. Separate local/journeyman credentials may apply depending on the city/county.
Doing business with the State of New Mexico. Vendors register in New Mexico ePro, the State Purchasing Division’s e-procurement portal, to receive notices and respond to solicitations for goods and services. Out-of-state entities generally must qualify with the New Mexico Secretary of State (via SilverFlume) before transacting business.
Highway and bridge lettings. The New Mexico DOT conducts electronic bidding through its E-Bidding Portal; contractors must be prequalified (typically for projects over $250,000) before bidding.
Bid security. New Mexico public works solicitations commonly require a bid bond of 5% of the total bid (or equivalent security) as stated in agency instructions. Check the specific bid documents for the exact requirement.
Performance and payment bonds. For public works, the contracting body must require both a performance bond and a payment bond. Each bond’s amount is set by the public body but may not be less than 50% of the contract amount (many New Mexico bid documents specify 100%).
Other public-works particulars. New Mexico’s public-works statutes include rules on subcontractor listing and “best bid” awards for projects over $250,000. Agencies may also require bidder qualification with the State Public Works Division for building projects.
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 New Mexico Construction Bidding Process
- State-level credentials and business registration.
New Mexico issues statewide contractor licenses through the Regulation and Licensing Department’s Construction Industries Division (CID) under the Construction Industries Licensing Act. Anyone “engaged in contracting” must be licensed and must designate a qualifying party. A handyman certificate is available for individuals performing casual, minor work not exceeding $7,200 per year, but it does not allow regulated electrical, plumbing, or gas-fitting work, and certificate holders may not operate as or advertise themselves as contractors. Licensed contractors must file a $10,000 contractor license bond with CID as proof of financial responsibility. Solar work is covered under existing CID classifications (e.g., EE-98 electrical or appropriate mechanical classifications); solar PV and related systems must be performed under the proper license, with required local permits. Business entities, domestic or foreign, generally must register with the New Mexico Secretary of State and comply with New Mexico tax registration requirements before contracting in the state. - Building codes and plan review.
New Mexico adopts construction codes at the state level through CID; local jurisdictions enforce them via their permitting and inspection programs. Current adoptions include the 2021 New Mexico Commercial Building Code (based on 2021 IBC), 2021 New Mexico Residential Building Code, 2021 Existing Building Code, and related specialty codes, as amended in Title 14 NMAC. New Mexico has also adopted the 2021 IECC-based New Mexico Residential Energy Conservation Code (statewide minimum), effective 2024, enforced locally through plan review and inspections. State facilities follow these state-adopted codes under CID/State authority; local governments may enforce additional requirements only as allowed by state rule. - Environmental and water-resource permits.
Construction activities disturbing one acre or more (or part of a larger common plan) in New Mexico require NPDES construction stormwater permit coverage under the EPA Region 6 Construction General Permit, with compliance overseen in coordination with the New Mexico Environment Department (NMED). Work involving dredge/fill or structures in waters or wetlands typically requires U.S. Army Corps of Engineers Section 404 authorization plus CWA §401 water quality certification from NMED’s Surface Water Quality Bureau for non-tribal lands. Projects on state trust lands (state-owned surface/mineral estates) require leases/permissions from the New Mexico State Land Office. Development in mapped FEMA floodplains is regulated by local floodplain ordinances; a local floodplain development permit is generally required in addition to building permits. - Insurance requirements.
New Mexico law requires workers’ compensation coverage for (a) employers with three or more employees, and (b) any business engaged in activities requiring licensure under the Construction Industries Licensing Act, regardless of employee count—effectively capturing licensed construction contractors. There is no single statewide mandatory general liability (GL) requirement for all contractors in statute; however, GL coverage is widely treated as standard, and public and private project owners commonly specify minimum GL, auto, and excess/umbrella limits in contract documents. - Public works bidding and prequalification.
State agency procurements are governed by the New Mexico Procurement Code. Executive-branch goods, services, and many construction solicitations are posted through the State Purchasing Division’s Online Procurement System and related portals. Individual agencies (including universities and local public bodies) may use their own approved systems consistent with the Code. The New Mexico Department of Transportation (NMDOT) conducts highway and bridge lettings competitively and requires contractor and many subcontractor prequalification under 18.27.5 NMAC before bidding or performing work; bid opportunities and documents are issued via NMDOT’s bidding/PS&E platforms. - Bid security and final bonds.
For public construction contracts estimated to exceed $25,000, New Mexico’s Procurement Code requires bid security of at least 5% of the bid amount (bid bond or approved equivalent) unless a statutory exception applies; agencies must specify exact terms in the solicitation. Under New Mexico’s Little Miller Act (NMSA 13-4-18 et seq.), public construction contracts over $25,000 require both a performance bond and a payment bond, each generally in the amount of 100% of the contract price, issued by a surety authorized to do business in New Mexico (or other approved security). Always confirm project-specific bonding, surety, and security conditions in the bid and contract documents.
New Mexico Bid Network
Contractors and suppliers looking for State work in New Mexico rely on two primary channels:
- eProNM (State Purchasing Division – General Services Department).
eProNM is New Mexico’s statewide e-procurement portal administered by the State Purchasing Division (SPD). Vendors register online, create and maintain their profiles, and select appropriate NIGP commodity codes to receive notice of relevant opportunities. Registered suppliers can view solicitations issued through SPD on behalf of Executive Branch agencies, submit bids/proposals electronically where enabled, and track awards. Keeping your eProNM profile and commodity codes current is essential for receiving email notifications and maximizing visibility for State solicitations. - NMDOT Highway & Bridge Lettings via Bid Express (AASHTOWare Project Bids).
All competitive lettings for highway, bridge, and related transportation construction for the New Mexico Department of Transportation (NMDOT) are advertised through NMDOT’s bidding resources, with electronic bids submitted via the Bid Express (BidX) platform using AASHTOWare Project Bids. Internet bidding through Bid Express is required for NMDOT construction projects. Contractors (and, in many cases, subcontractors) must obtain prequalified status with NMDOT by submitting a complete prequalification packet to the Office of Inspector General before bidding or performing work. Letting schedules, proposals, addenda, bid results, and award information are available online.
Because eProNM and NMDOT’s Bid Express/AASHTOWare systems are structured for government-to-business (G2B) and business-to-business (B2B) transactions, they do not support direct consumer sales. By registering in eProNM and maintaining accurate vendor and commodity data, firms gain statewide visibility and automated alerts for matching State opportunities. For local government work, New Mexico does not use a single unified portal. Instead, many cities, counties, school districts, and higher-ed institutions maintain their own procurement sites or vendor registration systems (such as OpenGov, BidNet Direct, or in-house vendor lists). Vendors pursuing a full New Mexico strategy should combine eProNM registration with targeted registration and monitoring of the procurement portals used by key local entities.
Succeed in the New Mexico Construction Bidding Process
To succeed in the New Mexico 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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