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Grader

How Good Is Your Bidding Process? Grader

JBKnowledge ConTech Report and AGC of America estimating-industry research consistently show that contractors with standardized estimating, defined markup discipline, written change-order procedures, and active bid follow-up win materially more profitable work than peers operating ad hoc. Grade your contractor bidding and estimating process across 10 rules covering standardization, takeoff accuracy, markup discipline, scope clarity, change orders, follow-up, win-rate tracking, proposal quality, turnaround, and job-cost feedback.

Last updated: May 2026

Contractor bidding and estimating process maturity is a graded assessment of how well a contracting business runs its bidding workflow. Grade = Sum(Rule Score x Weight) / 100. Contractor gross margin discipline (NAHB) typically target 18-25% for residential builders, 15-22% for general contractors.

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What is Contractor Bidding and Estimating Process Maturity?

Contractor bidding and estimating process maturity is a graded assessment of how well a contracting business runs its bidding workflow. It scores 10 rules covering standardized estimating method, detailed and verified material takeoffs, defined markup or margin policy, scope-of-work document clarity, written change-order process, defined bid follow-up cadence, win-rate tracking by project type, professional proposal presentation, bid turnaround time, and actual-cost feedback into future estimates.

The Formula

Grade = Sum(Rule Score x Weight) / 100

Worked Example

A contracting business uses inconsistent estimating methods, has detailed manual takeoffs, applies ad-hoc markup, has reasonable scope documents, no documented change-order process, no bid follow-up cadence, no win-rate tracking, mixed-quality proposals, 10-day turnaround, no job-cost feedback.

Standardized estimating: inconsistent (fail)
Takeoff accuracy: detailed manual (partial)
Markup discipline: ad-hoc (fail)
Scope clarity: reasonable (partial)
Change-order process: undocumented (fail)
Bid follow-up: none (fail)
Win-rate tracking: none (fail)
Proposal professionalism: mixed (partial)
Turnaround time: 10 days (partial)
Job-cost feedback: none (fail)

📌 Grade lands in the lower band. Highest-leverage initial fixes in priority order: adopt construction-specific estimating software (Buildertrend, STACK, ProEst) for standardization, set a target gross margin by project type and apply consistently, build a one-page change-order form requiring written customer approval, and start tracking win rate by project type to identify which categories deserve more bid investment.

Why This Matters

Bidding-process maturity drives both win rate and profitability

JBKnowledge ConTech Report and AGC of America estimating-industry research consistently show that contractors with mature bidding processes win materially more profitable work than peers operating ad hoc. The compounding effect across many bids per year produces meaningful business outcomes within 12 months of process improvement.

Written change-order discipline is the single highest-leverage business practice

Construction industry consensus and dispute-resolution research consistently identify unwritten change orders as the single largest source of contractor-customer disputes and the largest preventable margin loss. The discipline of refusing to perform unwritten change work is one of the most important business practices contractors can adopt.

Common Mistakes

❌ Ad-hoc markup based on perceived customer price sensitivity

Markup decisions made bid-by-bid based on perceived customer price sensitivity routinely produce under-priced wins and over-priced losses; the average gross margin drifts down over time. Setting a target margin by project type and deviating only with deliberate strategic reason protects profitability.

❌ Not following up on outstanding bids

Bids submitted without follow-up routinely go cold; a 48-hour and 7-day follow-up cadence lifts close rates meaningfully without consuming significant time. The follow-up discipline is one of the cheapest bidding improvements available.

Industry Benchmarks

Category	Good	Average	Poor
Contractor gross margin discipline (NAHB)	18-25% for residential builders, 15-22% for general contractors	12-18%	Under 10% (likely under-bidding or ad-hoc markup)
Bid turnaround time	Within 5-10 business days for most projects	10-15 business days	Over 20 business days (likely losing work to faster competitors)
Win-rate tracking and analysis	Tracked by project type with monthly review	Tracked overall	Not tracked

Source: JBKnowledge ConTech Report, AGC of America estimating-industry research, and NAHB Cost of Doing Business Survey

Benchmark data sourced from JBKnowledge ConTech Report, AGC of America estimating-industry research, and NAHB Cost of Doing Business Survey.

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One of the most common mistakes we see when working with clients: ad-hoc markup based on perceived customer price sensitivity. Markup decisions made bid-by-bid based on perceived customer price sensitivity routinely produce under-priced wins and over-priced losses; the average gross margin drifts down over time. Setting a target margin by project type and deviating only with deliberate strategic reason protects profitability.

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Frequently Asked Questions

How can a contractor improve win rates on bids?

JBKnowledge ConTech Report and AGC industry research consistently identify four practices that lift contractor win rates: standardized estimating template or software, professional proposal presentation with clear scope and terms, fast turnaround within prospect-expected window, and disciplined bid follow-up at 48 hours and 7 days after submission. Each compounds with the others; standardizing the bid process is one of the highest-leverage business investments contractors can make.

What estimating software do contractors typically use?

Construction-industry estimating software includes Buildertrend, CoConstruct (now part of Buildertrend), STACK, ProEst, PlanSwift, On-Screen Takeoff, Sage Estimating, and trade-specific tools. The right choice depends on project type (residential versus commercial), volume, integration needs (project management, accounting), and budget. Most contractors who move from spreadsheets to construction-specific software report meaningful speed and accuracy improvement within 90 days.

What is a typical contractor markup or gross margin target?

NAHB Cost of Doing Business Survey research consistently shows successful residential builders targeting 18-25% gross profit margin on direct construction costs, with general contractors typically 15-22%, and trade specialists varying meaningfully by trade. The specific markup applied to bids depends on the gross-margin target plus overhead recovery; consistent margin discipline across bids is the foundation of profitable scaling.

How important are written change-order procedures?

Construction industry consensus and dispute-resolution data consistently identify unwritten change orders as the single largest source of contractor-customer disputes. A simple one-page change-order form requiring signed customer approval before performing the additional work prevents most of these disputes. The discipline of refusing to perform unwritten change work is one of the most important business practices contractors can adopt; the short-term friction prevents long-term margin loss.

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