Hard bid, negotiated and design-assist: the kinds of commercial bids

A hard bid is a fixed price for a fully designed scope, awarded mostly on price. Negotiated work is priced with a GC or owner you already have a relationship with, with more room to discuss scope and margin. Design-assist brings you in before the design is finished. Public projects add their own rules: formal bidding, prevailing wages, certified payroll and bonds.

By Michael Reddy, IntelBid

After this lesson you can

Tell a hard bid from negotiated work and price each accordingly
Recognize public-work requirements before they catch you out
Decide where your estimating time earns the best margin

What are the main kinds of commercial bids?

Type	How it works	What it means for you
Hard bid (lump sum)	Complete drawings and specs; every bidder prices the same documents; the lowest qualified number usually wins.	Tight margins and lots of estimating hours. Your exclusions matter because there's no room to absorb surprises.
Negotiated	An owner picks a GC early, or a GC picks you, and the price is worked out together.	Fewer competitors and better margins, earned through relationships and reliable past work.
Design-assist / design-build	You help shape products and layout while the design is still in progress.	Your expertise gets used, but early budgets can become the number you're held to. Label them as budgets.
Unit price	You price per unit (per SF, LF or EA) and are paid on quantities actually installed.	Common for multi-site programs, repeat work and service agreements. Each unit price must carry its own overhead.
Time and materials	You bill labor hours and material at agreed rates plus markup.	Rare as a whole contract; common for extra work. Get hours signed off daily or you won't get paid for them.

How is public work different from private work?

Public projects — schools, government buildings, public universities, transit — spend public money, so they come with rules private work usually doesn't:

Formal bidding. Deadlines are absolute and bid forms must be completed exactly as instructed. A late or incomplete bid is often rejected.
Prevailing wage. Many public projects require paying at least the prevailing wage rates for the area and trade — under the federal Davis-Bacon Act on covered federally funded work, or a state prevailing wage law. Rates can be well above your normal wages.
Certified payroll. Weekly reports of each worker's hours, classification and pay. Budget the office time.
Bonds. Public owners typically require payment and performance bonds from the GC, and GCs often pass bonding requirements down to larger subcontracts (more in Module 1).
Bond claims instead of liens. You generally can't lien public property; your protection is usually a claim on the GC's payment bond, with strict notice deadlines.
Participation goals. Some projects set goals for small, minority-owned, women-owned or disadvantaged businesses, and GCs look for certified subs to meet them.

Price prevailing wage from the determination, not from memory

On covered projects the applicable wage determination is part of the bid documents and lists required rates by classification. Using the wrong classification or an outdated rate is a common and expensive mistake — and fringe benefits are part of the required rate.

Where is the margin?

Hard bids keep crews busy and build GC relationships, but they're usually the thinnest-margin work you'll price. Negotiated work and repeat relationships are where commercial flooring businesses tend to make their money — and you typically earn those relationships by performing well on competitively bid jobs first.

Track your hit rate and margin by GC and by bid type. If one GC awards you work at a healthy margin and another only calls when it needs a low number, your estimating hours should follow the first one. The win rate guide shows how to measure it properly.

What is a hard bid in construction?

A hard bid is a fixed lump-sum price for a fully designed scope, submitted in competition with other bidders. Award goes mostly on price, usually to the lowest qualified bidder.

Do flooring subcontractors have to pay prevailing wage?

On projects covered by the federal Davis-Bacon Act or a state prevailing wage law, yes. Subcontractors must pay at least the listed rates for each worker's classification and usually submit certified payroll. The bid documents state whether a project is covered.

Is negotiated work better than hard bid work?

Negotiated work usually carries better margins and fewer competitors, but it depends on relationships that are typically built by performing well on competitively bid projects first.

Key points

Hard bids win on price; negotiated work wins on relationship and track record.
Public work brings prevailing wage, certified payroll, bonds and bond claims instead of liens.
Measure margin and hit rate by GC and bid type, then spend estimating time accordingly.

In IntelBid · Dashboard → win rate

See which GCs actually award you work

IntelBid records the outcome of every bid for every client, so your win rate by GC comes from real history rather than memory — the first thing to check when deciding which invitations deserve your estimating hours.

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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.