Checking your bid price and setting a walk-away number

Before a price goes out, compare its cost per square foot and its labor share with similar past jobs, re-check the scope against the finish schedule, and look for anything priced as a percentage that should be a line. Then set your walk-away number — the lowest price you'll accept, usually direct cost with contingency removed, priced to still cover your overhead and a floor profit — before bid day, so a GC asking you to sharpen your pencil gets a decision you made calmly.

By Michael Reddy, IntelBid

After this lesson you can

Run quick sanity checks on a finished bid
Compare a price with your own past jobs
Set a walk-away price before negotiation starts

What should you check before sending?

Cost per SF against similar jobs
Divide the price by total floor area and compare it with past jobs of the same type and product mix. Way outside the range means something is missing or doubled.
Labor share of the price
Compare labor as a share of the total with similar jobs. Too low on a room-heavy or phased job is a red flag.
Every product code priced
Every floor and base code in the finish schedule appears in your estimate, and nothing in your estimate is missing from the schedule.
Lines, not percentages
Base, transitions, stairs, prep, mobilization and attic stock are quantities, not a percentage of area.
Assumptions written down
Moisture, prep, hours, mobilizations, submittal timing and tax are all stated in your qualifications.
Addenda and alternates
All addenda acknowledged by number; every requested alternate and unit price filled in.

Sanity-checking the price stack exampleWorked example · illustrative numbers

Bid price: $97,145
Total floor area: 14,000 SF
Your past similar office jobs (example): $6.20 – $7.10 per SF

Price per SF: $97,145 ÷ 14,000 = $6.94 per SF — inside your own range.
Labor share: $10,100 ÷ $97,145 = 10.4% — compare with your similar jobs before trusting it.
Price ÷ direct cost: $97,145 ÷ $46,215.50 = 2.1× — about double, as planned.

In range on price per SF. If the labor share is far below your history for this building type, recheck production rates before sending.

How do you set a walk-away number?

A walk-away number is the lowest price you'll accept for this job. Set it before bid day, from the same estimate:

Start from direct cost. Material, labor and job-specific costs don't get cheaper because a GC wants a lower number.
Decide what contingency you'd give up — only if the identified risks are actually lower than you priced.
Keep your overhead percentage in the margin. Overhead doesn't disappear either.
Set a floor profit you're willing to take for this GC and this kind of work.
Keep the bond in the math if the job requires one.

Walk-away price for the same jobWorked example · illustrative numbers

Direct cost without contingency: $46,215.50
Overhead (share of revenue): 25%
Floor profit you'll accept: 5%
Bond rate: 1.5%

Walk-away price: $46,215.50 ÷ (1 − 0.25 − 0.05 − 0.015) = $46,215.50 ÷ 0.685 = $67,467.88.
Room to negotiate: $97,145 − $67,468 ≈ $29,700 — but every dollar of it is profit you give up.

Anything below about $67,500 doesn't cover your overhead and a minimum profit. Decide that now, not on the phone.

When a GC asks you to cut

Ask what changed — is it scope, a competitor's number, or a budget problem? Scope changes are a re-price, not a discount.
Trade, don't just cut — a lower price for a deposit, better payment terms, fewer mobilizations or a scope reduction.
Offer value engineering — an alternate product or method that lowers cost without lowering your margin.
Walk away at your number. The jobs you win below cost are the ones that hurt for a year. Losing them is how you keep capacity for the ones that pay.

How do you check a bid price before submitting?

Compare cost per square foot and labor share with your own similar past jobs, confirm every product code and addendum is covered, make sure linear and count items are priced as quantities, and check that assumptions are written in your qualifications.

What is a walk-away price?

The lowest price a contractor will accept for a job, set before negotiation from direct cost, any contingency that can safely be removed, the company's overhead percentage and a floor profit.

Should a subcontractor lower their bid when a GC asks?

Only above your walk-away number, and preferably in exchange for something: reduced scope, better payment terms, fewer mobilizations or an alternate. Below it, the job costs more than it earns.

Key points

Check cost per SF and labor share against your own past jobs.
Set a walk-away price before bid day: direct cost ÷ (1 − overhead − floor profit − bond).
Trade price for terms or scope instead of just cutting.

In IntelBid · Bids, proposals and win rate

Your own history to check against

Every proposal you've sent lives on its bid in IntelBid with its line items, version history and outcome by GC — so “what did we charge for a job like this, and did we win it?” is a lookup, not a memory test.

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End of Module 6Take the Module 6 quiz · 5 questions

About the author. Michael Reddy builds IntelBid, bid management software for commercial flooring subcontractors. These lessons come from the bid desk: how the work is priced, won and paid for.