Construction Doc #1: The CONSTRUCTION PROPOSAL
Obviously, the construction proposal itself is the most important document for the construction industry. My father in his prime was a master carpenter by trade pointed out to me, a minimum of 40 hours is invested in each construction proposal, often requiring even more time.
The work of estimating and aligning all aspects of costs and materials is the time consuming part of the construction proposal process. This requires you to return to the proposal time and again to make adjustments as new pricing and new labor costs are factored in to the overall price of the job.
This process, as you know, doesn’t get a whole lot easier no matter what you do. It’s always going to be a process of interacting with prospective clients, suppliers, sub-contractors, and other entities to refine the construction proposal into a winning bid.
The actual sections of a construction proposal template are much like the parts of other types of proposals.
The table of contents generally follows this type of pattern:
Cover Letter
A cover letter is an important part of any business proposal. The construction proposal cover letter should address your recipient (by name), introduce you and your company, and explain why you are submitting the proposal briefly, as well as summarize why your company is the right one for the project.
Company Profile
The next section of a construction proposal should highlight your past work and illustrate for the recipient that you are capable of completing the work required. Consider including information about how long you have been in business, what professional certifications you and your team have, and what local, regional, or national accolades you have received.
Contact Information
Very simply, you want to make sure the recipient knows how to get in contact with you, should they have any questions about the proposal – or want to accept it immediately (as would be ideal!). Make sure you give your recipient plenty of options for getting in contact with you.
Costs
Making it clear that you are providing an estimate, you want to list all costs related to direct labor, materials, subcontractors, and equipment fees and other costs. You will eventually replace these costs with detailed estimates a little later in the project (see Document #2).
Agreement Terms
Note that although the last page of a construction proposal is usually an agreement, this agreement is not the construction agreement, which is a separate document (see Doc #2 in this article). The agreement here is an agreement to be signed between both parties, agreeing to the terms laid out in the proposal, as well as the proposed cost estimate.
Takeaway Tip: Since the very nature of a construction proposal involves referencing dozens of other documents (material quotes, sub-contractor estimates, etc.), you can make that process all the more simple by putting all the support documents in the online, in the cloud.
We’ve covered in several aspects of writing winning business proposals around our blog. You can find a great primer right over here. And here. And here, too. Okay, last one.
Using an online document management platform (like our companion app, PandaDoc) to scan, send, track, measure, and (above all) keep up with the various forms that get thrown around during the process will make managing all the documents that inform your construction proposal much easier.
Construction Industry Doc #2: SERVICE CONTRACT
The service contract is our next essential document for the construction industry. After the construction proposal has been accepted, the negotiation is far from over. Your project may encounter cost overruns, unforeseen delays, or other things that call for adjustments to be made.
The construction service contract becomes the governing document of the project once the bid has been accepted. To help you avoid any unfortunate misunderstandings, it is important to put in place a construction contract that clearly outlines your (and your customer’s) responsibilities.
With this type of document, you basically hope for the best and plan for the worst. Construction projects can go horribly wrong and end up in litigation if this document is botched. All of the terms agreed to in the proposal are reflected in this document; its purpose is simply to expand upon and clarify the parties’ respective obligations, liabilities, and options.
The basic parts of a construction service contract are:
Names of parties
Definitions (services/deliverables/project)
Statement of work to be performed
Term (duration of the project)
Detailed costs
Payment terms
Details of deliverables
Acceptance terms
Warranties and remedies
Limitations of liabilities
Indemnification
Termination
Delay or suspension terms
Confidentiality
Subcontracting
General terms
Pay careful attention to the template below. As several sections are incredibly detail-oriented. This is one document in which you want to cover all your bases. This document is where the detailed costs and hard deadlines are established. The more detail you impart in writing this document, the easier it will be to manage and complete the project.
Takeaway Tip: Simply put, don’t wing it! Consult with your legal adviser and have him or her look over each construction service contract that you plan to sign. It’s better to pay for consultation than litigation in a courtroom. An ounce of prevention… okay, okay, you get the point!
Construction Industry DOC #3: SUBCONTRACT AGREEMENT
Subcontracting is another highly important (and common) element in the construction industry. If you are the primary contractor, you will need the subcontractor agreement to serve as the governing document when dealing with subcontractors, making certain that the cost, timing, and work to be performed by the subcontractor are all clearly laid out in the agreement.
If you are a subcontractor, you will want to know exactly what is expected of you and how you will be compensated. Often, the primary contractor will be working against his or her own set of deadlines, expectations, and budgetary concerns. This can place tremendous pressure on you to get the job done on time and in budget. You undoubtedly want to meet those expectations, but the only way you can know how efficiently you are completing the project is to have the subcontractor agreement in hand.
A carefully thought out subcontractor agreement is the best way to make sure that both parties know what to expect throughout the project.
Takeaway Tip: Pay careful attention to the TASK ORDERS section of the template below. Note that that section effectively details the description of the work performed and the delivery schedule of completion of all subcontracted work. If something is essential to the project on the part of the subcontractor, it has to be here or it can’t be expected to happen.
Construction Industry Doc #4: FLOORING INSTALLATION / REPAIR PROPOSAL
Although you may be subcontracting work throughout the build, and the subcontractor agreement mentioned above will work for various purposes, flooring is a highly skilled trade and it may require you to enter into a specialized agreement.
Often, if the eventual owner of the new construction has a special request or need when it comes to flooring, you’ll turn to a dedicated flooring installation company to complete the work.
Takeaway Tip: If you are a flooring contractor, it’s a great idea to include some photos of your prior work in the proposal. If you are a contractor looking to hire-out flooring repairs, it’s a good idea to include stock images in the proposal of the type of flooring you need, to be certain the prospective flooring contractor can meet your expectations.
Construction Industry Doc #5: ARCHITECTURAL PROPOSAL
The only way to build is to follow the blueprint.
If you are a contractor, you will likely work with an architect at some point. Often they will prepare architectural proposals to submit to you. If, on the other hand, you are an architect, you may find yourself bidding in competition against other architects for special builds.
In that scenario, you will need submit a proposal that conveys that your design is sound, can be built within budget, and meets with local building codes – not to mention that it will appeal to the customer’s aesthetic expectations. What’s more, you’ll be doing this without the final blueprint. This means you’ll want to spend adequate time writing out clear and concise descriptions of the design.
Like the subcontractor, the architect is in the tough position of needing to fit his or her work within the context of the overall project. This places pressure on the architect to get things right on paper that will work exactly as planned in the real world. The architectural proposal must convince the primary contractor that the plan can come to life – in budget.
Takeaway Tip: As with our flooring example above, pictures are your friends. Providing examples of earlier blueprints and images of final builds is a great way to convince the prospective architectural customer that your firm is the right one for their project.
Here are some Bonus Templates:
There you go Quote Ballers! I hope these 5 documents come in handy during your next winning bid. What other documents or tips are important to the construction industry in your opinion? I'd love to hear from you in the comment space below.
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