The Differences Between Construction Takeoff, an Estimate and a Bid

In the preconstruction phase, to be confident in your data and assured of the competitiveness of your bid you have to understand the various elements involved. Determining appropriate timelines and creating accurate budgets allows you to manage more profitable jobs.

Takeoff, estimates and bids, in their own way, are processes used to determine the schedule and costs for a project. Despite being independent facets of preconstruction, they’re also heavily dependent on each other. Contractors can’t create accurate estimates if the takeoff performed is outdated. Similarly, bids are directly affected if estimates include incorrect pricing.

We’re here to help you recognize why each process is important on a micro and macro level before it gets confusing. In this article, we break down these processes so you can see how everything works together.

Key Takeaways About Construction Estimating Software:

• Construction takeoff refers to measuring the dimensions and quantities of the materials, labor and other resources required to complete a construction project.
• A construction estimate is a complete summary of expenses that equals the assumed total cost of a construction project.
• A construction bid is a formal proposal submitted by a contractor to show how their company would complete a project at a specific price and timeline.
• Using sophisticated construction estimating software to facilitate the estimating and takeoff process helps create more accurate bids.

What is Construction Takeoff?

Essentially, takeoff data is when you count the required elements for a project. Takeoff refers to measuring the dimensions and quantities of the materials, labor and other resources required to complete a construction project.

This takeoff data is compiled to produce quantities for materials, which is important for the pricing process and will be used to determine the accuracy of an estimate.

During the takeoff process, estimators will carefully review architectural and engineering drawings, project specifications and any other relevant documentation to gain a comprehensive understanding of the size of the land/room/building and what items are needed to fit in these spaces.

What is a Construction Estimate?

A complete summary of expenses that equals the assumed total cost of a construction project is a construction estimate. It acts as an itemized cost breakdown which also lists a description, quantity, unit cost and total cost for each item.

Typically included in an estimate:

• Project Scope: This determines the tasks, goals, constraints and deliverables of a project by reviewing the project plans, blueprints and specifications.
• Takeoff Calculations: This is completed after the project scope is determined to help define the labor and equipment needs.
• Supplier and Vendor Pricing: Estimators determine the cost of each aspect of the project after each item is assigned specific prices.
• Subcontractor Fees: This is dependent on certain projects but if a subcontractor is hired, the estimator may need to determine the cost of specifics within the project with a quote.
• Contingency: This reflects a portion of the budget set aside for possible changes or unexpected costs during a project’s completion.
• Final Estimate: The sum of all the costs as well as a detailed breakdown of materials, labor rates and any additional expenses.

As the foundation for the project budget, estimates are used to monitor production, and estimate data can be used to improve budget expenses on similar projects going forward.

With this historical data, reviewing estimates, change orders, drawings and takeoff documents can help project managers and foremen track inventory, scheduling and cost overruns.

What is a Construction Bid?

A construction bid is a detailed proposal made by a contractor to show how their company would complete a project at a specific price and timeline. A bid acts like an offer, outlining:

• Contractor Information: Includes contact details and relevant licenses that identify the company submitting the bid.
• Project Understanding: This demonstrates the contractor’s grasp of the project scope, specifications and requirements.
• Cost Breakdown: The estimate that accounts for all estimated materials, labor, equipment, permits and other project-related expenses.
• Timeline and Schedule: Proposes a realistic timeline for completing the project, while outlining key milestones and probable completion dates.
• Qualifications and Experience: Highlights the contractor’s relevant experience, expertise and past performance on similar projects.
• Contractual Terms: Includes warranty details, liability and dispute resolution procedures that outline the proposed contract terms.

The owner typically selects the most qualified and cost-effective proposal, making the bidding process extremely competitive. This is why an estimate and all takeoff calculations must be accurate.

How Do They All Work Together?

Typically, construction estimators begin the estimating process by reviewing the bid package, the project specifications and contract documents. Estimators then move into performing quantity takeoff and after quantifying the materials, labor and other resources, they will design the estimate. The estimate will be used by the contractors to nail down the best quality of service at the most reasonable price or a competitive bid.

Estimates are used to calculate what materials are needed, how much inventory is required and what manpower is expected. Looking at past takeoff and estimating documents from previous projects helps developers adjust processes or repeat successful counts for future projects.

How Does Construction Estimating Software Help?

Construction estimating software allows estimators to digitally measure and calculate quantities, automate the pricing process and generate detailed reports and estimates. Using sophisticated software to facilitate the estimating and takeoff process helps create more accurate bids.

The most robust solutions allow you to complete estimating and takeoff in one system, keeping all the required budgeting information on one drawing in one place. These tools can streamline the estimation process and improve accuracy and efficiency. With built-in templates per trade, estimators can use the software to upload information quickly while building bids.

See How You Can McCormick Systems Can Improve Your Construction Estimating

Taking the time to understand the importance of how takeoff, estimates and bids work together can help save time and money for your company.  is crucial to analyze whether your estimating process is effective and it helps to determine if completing a construction project is even feasible.

If you work in the electrical, plumbing and mechanical trades consider McCormick. We are the nation’s leader in construction estimating and digital takeoff for MEP contractors offering trade-specific, customizable databases that have helped estimators create accurate bids for decades.