Guide

Contractor Bid Review Before You Sign

A contractor bid review answers a simple question: what deserves a closer look before you sign?

Start with the math. Then review the scope, allowances, exclusions, project assumptions, contractor credentials where applicable, and the items that could require more money later.

CostCheckGPT is being built to organize this review into a Bid Defense Memo.

5-step contractor bid review

Add every line item and compare the sum to the stated contract total.
Separate included work from excluded work and allowances so you can compare bids on the same scope.
Check every allowance amount against a realistic range for the market.
Verify the contractor license number in the relevant public records.
Compare labor and material rates with what is typical for the trade and location.

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What is a contractor bid review?

A contractor bid review is an owner-side evaluation of a contractor estimate or proposal before the contract is signed. It checks whether the numbers reconcile, whether the scope is complete, whether allowances are realistic, whether exclusions are clear, and which items require clarification.

What should you check in a contractor bid?

A thorough contractor bid review covers five areas. Each can reveal a different category of problem before you commit to a renovation contract.

1Arithmetic. Sum every line item yourself. Compare it to the stated contract total. Any unexplained gap. Whether $2,000 or $60,000. Warrants a written question before signing.
2Scope completeness. Check that the bid covers all expected phases: demo, rough work, permits, inspections, finish work, and cleanup. Missing a phase means a change order after you have already committed.
3Allowance language. Every allowance is a placeholder for an unknown cost. If an allowance is too low for the market, the actual cost will come back to you as a change order. Broad "general allowance" language is a red flag. See common bid red flags. For bathroom-specific allowance benchmarks, see realistic contractor allowances for a bathroom remodel. To evaluate any allowance for adequacy, see how to check contractor allowances in a renovation estimate.
4License status. Confirm the license number is listed in the bid and verify it in the relevant public licensing records. An unlicensed contractor performing regulated work creates permit and insurance exposure.
5Pricing context. Labor and material rates vary by location, trade, and specification. A line item that looks well above or below what is typical is worth a question. Higher may reflect a different spec or padding. Lower may reflect mismatched scope or intended material substitutions.

For a printable version of this review process, see the full contractor bid review checklist. CostCheckGPT is being built to organize this review for you; join early access to be notified when contractor bid review opens.

How do you find math errors in a contractor estimate?

The most direct method is to create a simple spreadsheet with every line item from the bid. Description, unit, quantity, unit price, and extended price. Total the extended price column. Compare that total to the contractor's stated contract total.

A gap between these two numbers is a math error or an unlabeled overhead charge. Either way, it requires an explanation in writing before you sign.

Common sources of math errors in contractor bids:

1Subtotals for each trade that do not add up to the page total.
2Line items where the unit price times the quantity does not match the extended price.
3A contract total that is higher than all line items combined, with no "overhead and profit" or similar line to account for the difference.
4Duplicate line items in different sections that double-bill the same scope.

The planned Bid Defense Memo is designed to run this check against every line in the bid and report the dollar exposure of any unexplained gap.

How do I know if my contractor estimate is overpriced?

Three signals that a contractor estimate may be overpriced, and one that is often missed:

1Line-item rates that look high for the work described. Labor and material costs vary by market. If quoted rates look well above what comparable work typically costs in your area, that gap needs an explanation: upgraded spec, unusual site conditions, or padding.
2Vague or inflated allowances. A $20,000 "general allowance" for a project where itemized scope would total $8,000 is a pricing problem, not a scope problem. The allowance is doing work the line items should be doing.
3Math that does not close. A contract total higher than the sum of line items, with no overhead-and-profit line, suggests the total was set first and the line items filled in to approximate it.
4The missed one: scope that was not priced. Sometimes a bid is overpriced because work was double-counted. The same demo scope on page one and page two at full price each. Normalization catches this.

The planned Bid Defense Memo is designed to flag each of these specifically, with the supported dollar exposure attached. For a broader guide on spotting overpriced estimates, see how to know if your contractor estimate is overpriced. Once you have the flags in hand, see how to negotiate contractor bid overcharges. For a guide to the costs most commonly hidden in estimates, see common hidden costs in contractor estimates.

How do you spot missing scope in a renovation estimate?

Compare the bid's scope list against what the project physically requires. For a gut renovation, the following items should appear explicitly or be acknowledged as excluded:

Demolition and debris removal
Permit fees (building, electrical, plumbing, mechanical)
Structural work and inspections
Electrical rough-in and service upgrade (if required)
Plumbing rough-in and drain relocations
HVAC rough-in, equipment, and ducting
Insulation
Drywall and plaster
Tile, flooring, and finish carpentry labor
Fixture and appliance installation labor
Painting. Prep and finish
Final inspections and certificate of occupancy fees
Site protection and cleanup

Any item missing from the bid without an explicit exclusion note is a potential change order. If you see exclusions, ask the contractor who is responsible for those items and whether the cost has been accounted for elsewhere. For a detailed guide on permit responsibility specifically, see how to check whether a renovation bid includes permits.

How do you compare multiple contractor bids fairly?

You cannot compare bids fairly until they are on the same scope. This is called scope normalization. The process of adjusting each bid to reflect the same set of included work so the final numbers are actually comparable.

A practical approach:

1Create a master scope list covering every item the project requires.
2For each bid, mark each scope item as included, excluded, or covered by an allowance.
3Add a market estimate for each excluded item to each bid's stated total.
4Adjust allowances up or down to a realistic market figure.
5Compare the normalized totals, not the stated totals.

For a worked example and a longer walkthrough, see how to compare contractor bids side by side and how to tell whether a contractor quote is fair.

When should an experienced contractor review the bid?

A self-review using the checklist above catches obvious math errors and missing line items. Some questions benefit from an experienced contractor's judgment:

1Pricing context for the specific trade, location, and specification.
2Allowance adequacy. Whether the dollar amounts are realistic for the stated material grades and project conditions.
3Permit assumptions. Which permits are required, who pulls them, and whether the bid accounts for them.
4Trade-scope coverage. Whether specialty trades (plumbing, electrical, mechanical) are included or assumed to be owner-supplied.
5Clear questions the owner can send back to the contractor in writing.

CostCheckGPT is being built to organize these questions into a Bid Defense Memo, using the approach described on the methodology page. In the meantime, see where to get a contractor bid reviewed by a licensed GC and licensed GC vs. AI contractor bid review tools. Investors evaluating rehab bids can also see how real estate investors review rehab contractor bids.