with some of the pay for proposal threads the question came up in my mind.
what is your definition/contents of, and commitment associated with
bid
estimate
quote
proposal
any similar term.
_____________________________
bobl Volo, non valeo
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bobl,
As I use the terms;
Quote = repeating exactly what someone else said.
Estimate = What I guess it is going to cost (ballpark) before I create the proposal, always a broad range, given during the first meeting with a propective client. (Scott, part of the sales pitch.) Used to see if the HO smiles or faints, so I'll know if their budget fantasies are realistic.
Bid = what you give in response to a Request for Bids from an entity wanting something built. It is an offer in a reverse auction, where all parties are bidding on the same item; A Proposal (see below.)
Proposal = shorthand for Scope of work, Detailed Plans, Materials List, and Cost Analysis. (Even if Detailed Plans are provided by the prospective client, I must still critically analyze them for errors and ommissions and "do-ability.")
Contract = An agreement to do what the Proposal says for the total price in the Cost Analysis using the material specified in the Materials List to the measurements in the Detailed Plans.
An individual gets an Estimate, a Proposal, and a contract from the GC(s).
A government or corporate entity gives many GCs Proposals and gets Bids from many GCs and gives a contract to one of them.
I guess it comes down to 'sophistication' (ask Scott/SHGLAW.) A Proposal must be created by a sophisticated party as it is a complex and detailed work piece.
SamT
Bid--given in response to a formal bid solicitation, like those put out by governmental entities. You have to provide a cash bid deposit with your bid.
Estimate--an educated guess about what something will cost or take. In my opinion an estimate is always a range, not a single number. Sometimes given over the phone, sometimes at the first meeting.
Proposal--an offer to do a given piece of work for a specific price and/or on specific terms (might include t&m terms).
Quote--similar to a proposal... in my mind a quote usually applies to an offer to retail or wholesale goods.
our Proposal lists all of the terms of the Agreement.
when it is executed in duplicate Originals,by both parties, and the deposit check is paid, it becomes the Contract.
a bid is an informal term meaning different things to different people. it can be a fixed price, an estimate, it may be written, or verbal, it can have a scope of work, or not..it can be a single number written on ripped scrap of paper...or it can be 30 page form from an architect.. who knows ?
an estimate is a guess... we don't guess.. we choose not to guess..
we will give examples of previous work during our presentation..
Mike Smith Rhode Island : Design / Build / Repair / Restore
the problem is that most contractors and tradesmen , and most customers, do not have any idea what a "bid" is, or an 'estimate".. or any other term commonly used..
in construction contracts, it pays to go to a source.. such as "Contractor's Legal kit, or the AIA, or a knowledgeable construction lawyer..
or another source is NAHB, or your Remodeler's Council... or your Public Library.. there are MANY books on construction contracts
or read a bunch of municipal and state contracts or state agency contracts.. many of the proper terms come from those documents..
with your background in federal contracting.. your terminololgy should be a good starting point.. your ( the generic "your").. is that residential contracting is different....but not that much...
a Proposal.. spells out all of the documents that are included in the "scope of work", all of the boiler plate language required by the jurisdiction, all of the Exclusions,
any Allowances included, any special conditions, the payment schedule, start and finish times (even if they are just ranges... )
and any Remedies, such as an Arbitration clause...
when the proposal is signed by both parties, the binder (check ) is tendered, and the recission period is past, the Proposal becomes the Contract.
in other words.. the Proposal defines the Contract.. all of the other terms batted around , may amount to the same thing.. it depends on what is agreed to by the parties.. if there is a dispute, the legal system gets to determine what was agreed to..
if you want to leave your fate in the hands of the legal system.. you can be as informal as you want
but hey, whadda i no ?Mike Smith Rhode Island : Design / Build / Repair / Restore
"the problem is that most contractors and tradesmen , and most customers, do not have any idea what a "bid" is, or an 'estimate".. or any other term commonly used.."
that's impression
and why I asked
hoping at least here, BT, there might be a little common meaning of terms.
so easy to talkof two different meanings to a word._____________________________
bobl Volo, non valeo
My proposal, mailed last week to my out-of-state client, has all the features in it discussed by Mike Smith.
It isn't an estimate. An estimate is what I did to build the proposal. It isn't a bid . . . there isn't any competitive bidding on this project.
It is 20 pages of fine print, makes reference to and ties into it a set of specifications and a 28-page set of plans, and fine print on 8 of the 20 pages spells out spec detail and allowance pricing info not called out in the other documents.
It was "wet signed" by me when mailed. When it is signed by the client, and returned with the specified deposit payment, within the specified time limit, it becomes a contract.
If the client makes changes to the contract and initials the changes in margins, his return to me of the proposal with changes becomes a counter-proposal, and then the dance begins.
I've been involved in these when we go through as many as three rounds of negotiations on details and terms.
Edited 9/22/2004 12:09 pm ET by Bob Dylan
"there's a sign on the wall but she want's to be sure 'cos you know sometimes words have two meanings"
spent a little time on the mass.gox site
an excerpt?
Hiring a Home Improvement Contractor
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Solicit Bids
Selecting a contractor is the most important part of the home renovation process. You should always interview at least three contractors and have each contractor bid on the project using identical plans and specifications. A bid is an offer to perform the work. Bids allow you to compare prices and contractors. Be sure the bid is detailed and in writing.
Discuss the bids with each contractor and make sure you understand the reasons for any variations in price. DO NOT NECCESARILY GO WITH THE LOWEST BIDDER. Sometimes a higher price may be worth it, if the materials to be used are of higher quality or the work is more extensive. In addition, be aware that professional contractors who carry insurance will have greater overhead expenses and their bids may be more expensive than those from contractors who take business shortcuts._____________________________
bobl Volo, non valeo
This sentence does not make sense:
"Sometimes a higher price may be worth it, if the materials to be used are of higher quality or the work is more extensive."
If they are supplyiing "bids" based upon "identical plans and specifications" then there should be NO difference in materials or more "extensive work." Un less of course, the plans and specifications are ambiguous, in which case, they are worthless.
The article refuses to address the "non-substantive" parts of a remodeling project. As such, the content of the article is worthless.
that domes from the Massachusetts gov't hope page on advice to hiting a contractor.
so it's aimed at the general public.
I can see what you mean.
but I can guess at what it means.
an example, you ask for a new roof, minimum 30 year shingles.
someone offeres 40 year shingle.
no, they are not bidding the same
but it also could be 30 yr for X, 40 for X+ 100
just guesses._____________________________
bobl Volo, non valeo
I'm not a lawyer, but we discussed these terms in a business course I took. Here's what I have from notes.
The three terms are different, and have legal definitions. So, you really need an answer from a lawyer, or from a reputable textbook.
Bids are binding on both parties and cannot be negotiated. If an owner requests bids, the owner cannot then negotiate for alternate terms afterwards, nor can the bidder. Government agencies generally use bids because all the terms and specs are put forth to all parties up front, and there is no room for negotiation (which can lead to unethical practices if someone were so inclined). Being government agencies, the bids are opened in public and read aloud so everyone present can witness that the winning bidder did in fact have the best bid. Just because the process is a bid doesn't mean the lowest bidder must be accepted. Laws usually require that for government bid, but may provide otherwise, such as 10% credit for using recycled materials.
Quotes are binding on the supplier, but not the owner, for a limited period of time. They are negotiated, alternates may be submitted, and ideas brought forth from one competitor can be shared with another. Quotes are generally what homeowners ask for whether they realize it or not. So, different contractors may give a price (per job, t&m, or whatever) and also suggest alternatives, like, suggesting that ice and water shield be used under shingles, for example, when it wasn't asked for in the request. The owner may choose to go with any supplier he wishes, and can go back to another and ask, how much more if you use ice and water shield. Quotes are a starting point from which an owner may negotiate, but, the supplier is bound by the terms of what he quoted. So, if a supplier quotes a job at $5000, the supplier cannot then say, plywood prices went up since I wrote the quote so I can't do it for that price now. That's why smart contractors always say for how many days a quote is good for, and any other contingencies.
A proposal is intellectual property, that is, knowledge. They are negotiated. Information cannot be disclosed to other suppliers. Suppose you request proposals from several consulting firms about how to improve your marketing. You pay them to give you ideas. You cannot then go to one of the suppliers and say, for example, that one of the others said they will conduct a market survey to make recommendations to you, why don't you. Because they are selling you knowledge rather than stuff, giving one supplier's ideas to a competitor is like taking one supplier's lumber and giving it to his competitor.