How to Read a Contractor Bid, What a Houston Construction Consultant Looks for Before Any Client Signs
Most investors and developers have no idea they are being underbid until the change orders start arriving.
By then the contractor is already on site, already paid a draw, and already in a position where you need them more than they need you. That is not an accident. That is a strategy.
Here is how to read a contractor bid before you sign anything.
What a Contractor Bid Actually Is
A contractor bid is not a promise. It is a list of what the contractor is agreeing to do for the number they quoted. Everything not on that list is a change order waiting to happen. The best contractors in the business know exactly what to leave off a bid to win the job and add back later at full margin.
Your job before you sign is to find what is missing.
A Real Example
I reviewed a repositioning bid for a commercial property that included a complete exterior overhaul. New facade, resealed and stripped parking, new lighting package. The numbers looked competitive. The scope looked thorough.
But the bid did not include the structural supports required for the new parapet. It did not include the roof modifications the parapet addition required. Two line items that were not optional, they were code requirements for the work being proposed.
The contractor knew they were missing. They were not an oversight. They were a calculation. Win the job at a number that looks good, then surface the structural and roofing scope as a necessary change order once demolition has already started and walking away is no longer a realistic option.
That change order would have been a six figure addition to a budget that looked balanced on paper.
What to Look for in Every Bid
Read the scope of work line by line and ask one question about every item, what does completing this work actually require that is not listed here.
New facade work requires structural attachment points. Are they included.
Parking lot reseal requires crack repair, drainage correction, and ADA compliance review. Are they included.
New lighting requires electrical panel capacity review and potentially a service upgrade. Is that included.
Roof modifications require engineering sign off and permit fees. Are those included.
Material specifications should list exact products with lead times noted. If allowances are used instead of specifications that is where costs balloon after the contract is signed.
Permits should be listed as a line item with a realistic cost. If they are missing entirely that cost lands on you later.
Demolition and debris removal should be explicit. Vague language like site cleanup means nothing legally.
The Line Items That Are Almost Always Missing
After 25 years of reviewing commercial construction bids these are the items most commonly left out intentionally or through genuine incompetence, and the result is the same either way.
Engineering and inspection fees. Windstorm certification on structural work. Temporary protection during demolition phases. As-built documentation. Warranty paperwork collection. Final cleaning. Utility reconnection fees. Dumpster and haul off costs. Touch up and punch list labor.
None of these are glamorous. All of them cost real money. None of them show up in the bid until you know to ask for them.
What to Do Before You Sign
Get the bid in writing with a detailed scope of work, not a summary, a line item breakdown. Then take it to someone who has written bids from the other side of the table and ask them what is missing.
That conversation is almost always worth more than the cost of having it.
If you want a line by line review of a contractor bid on your next Houston project before you commit to it, let's talk.
📅 Book a free 15-min strategy call: calendly.com/jeph-reit
🌐 reiguideservice.com