Construction Project Proposal: What Is It & How To Write It

Intro

Construction project proposals help you win business. As a representation of your business and document that sets expectations for the client, it’s critical to deliver top notch proposals. Read on to learn how to write a construction proposal, costly mistakes to avoid, and valuable information to help you win the projects you want. 

What is a construction proposal?

Construction proposals are a detailed document that outline construction project details such as scope, budget, timeline, terms and conditions, involved parties, and so forth. Construction companies often use construction proposals to obtain commitments on projects. Ultimately, they can be used for legal protection as well as to manage expectations and clearly document the agreement between client and construction company. Construction proposals are tailored to each project and can be completed once some level of discovery has been completed. 

How do you write a construction proposal​?

In order to get to the stage of writing a construction proposal, you’ll need to do your due diligence. A construction proposal contains several sections with detailed information, which we will review below. Utilizing a project management software can help optimize efficiency and simplify the process of creating a competitive construction project proposal. 

What to include in a construction proposal?

Construction project proposals contain complex and valuable information, but should be well-organized and easy to understand. When creating a construction proposal, assume the reader knows nothing about the project. While you have the freedom to customize construction proposals, there are some key elements that should be addressed.

1. Executive summary: The executive summary of the construction proposal provides an overview or big picture of the project and scope. The normal length for an executive summary is about one page or so. 

In addition to a project overview, it typically includes information about the construction firm, client needs, and project goals.  If clients are comparing multiple proposals, the executive summary can help your firm stand out and be the obvious choice. Include an overview of your firm, history, experience, and skills that make you qualified for the job to help your firm stand out. 

1. Project scope: From start to finish, this section is your opportunity to detail the scope of the project, tasks, deliverables, and what your firm will do to support the project. Start with a clear project scope or description followed by an explanation of customer needs and or requirements. Transition to sealing the deal with a detailed overview of your proposed solution, including a list of materials and equipment required. To effectively manage expectations, you may want to include limitations or exclusions to the services you can provide. It’s extremely important that this section is clear to avoid any misrepresented expectations or misunderstanding with the client. The focus should remain on what you can do for the client. 
2. Cost estimate: While the budget can be combined with the project scope, there are benefits to leaving it as a standalone section. Regardless of where you choose to highlight the costs, they should be broken down into line items including all costs associated with the project. This includes labor costs, materials, permits, and any other associated fees. In this section you have the flexibility to offer your client options or extras that may impact the cost of the project. Payment terms should also be included in this section. Transparency is key when it comes to pricing and payments. 
3. Timeline: Include a detailed timeline including start and completion dates, milestones, and checkpoints planned throughout the project. You can also include payment schedule - and penalties for missed or late payments. 
4. Disclosures: Clearly outline the terms and conditions of your proposal that need to be agreed to to carry out the agreement. Legal requirements, dispute resolution policies, insurance coverage, warranties, company policies and procedures, and potential project delays out of your control and how they will be handled are all examples of items you may want to include in this section. 
5. Relevant authorities: This section specifies necessary permits, licenses, or certifications for the project. If you see fit you can combine this section with another section. 
6. Warranty: Detailing how you stand behind your work can offer clients confidence. Assigning an exclusive section dedicated to warranty coverage can help your proposal stand out. 
7. Owner information and acceptance: This section provides the client the opportunity to accept the proposal. Include detailed contact information, websites, and other company information. 

What’s the difference between a construction proposal and a bid?

Construction proposals and construction bids are different. Proposals are far more comprehensive than construction bids. A bid is more directed toward providing numbers and timeline for ease of comparison. Within the construction proposal there should be a section dedicated to outlining the costs associated with the project. 

Construction proposal mistakes to avoid

Construction proposals are intended to protect construction firms and manage client expectations. Taking the necessary time to develop project proposals is critical to ensuring accuracy. Let’s review some costly mistakes to avoid. 

1. Bidding all projects: Some projects will make more sense than others. Consider your qualifications, potential profit, and other details related to each project. If a project is not worth your time to bid, politely thank the client for the opportunity and move on. If you have a referral for them, this can allow you to still help them while building relationships. 
2. Inadequate research: Before delivering a construction project proposal, sufficient project research needs to be carried out. Without the right information, you cannot accurately outline and bid a project. Being off on timeline, cost, milestones, and other details can fall back on your firm and be costly. 
3. Failing to factor delays or overtime: Most projects will encounter overtime as you strive to complete the project on time, and or delays. Both should be accounted for during the project proposal stage. It is better to overestimate project costs and timelines than to underestimate. 
4. Rushing to deliver a construction proposal: While you may feel the pressure to deliver a construction proposal, taking the time you need to do it the right way is critical. 

What is construction proposal software?

Construction proposal software can streamline the process of tailoring project plan proposals. Construction project proposals contain detailed information including timelines and budgets. Leveraged as a resource to help win business, it’s important to optimize efficiency, highlight your firm, and deliver a proposal that draws the attention of the client. Construction proposal software can help you deliver higher quality, optimized proposals while saving you time. 

How long is a construction proposal valid?

The terms and conditions of a construction proposal can vary. As outlined above, the proposal should clearly outline the terms and conditions. Part of the terms and conditions should be the expiration date of the proposal. A reasonable timeframe is 30 or 60 days. 

How does ALICE help with construction proposals and bidding?

ALICE can help you find the most efficient and cost effective way to complete a project while identifying ways to reduce risk. ALICE can help you explore multiple solutions so you can find the best possible solution to propose. Our AI powered software can provide a competitive edge, thus helping you earn more projects. And that’s only the beginning of what our software is capable of.

Book a demo today to learn more about our advanced construction optimization platform.