Understanding Bid Contracts and Takeoffs

Typically, a company purchases material and labor using one of these purchasing methods:

• Bid contracts

• Takeoffs

Typically, you will select a purchasing method based on the subcontractors with which your company works.

With bids, the subcontractor is responsible for purchasing the labor and materials needed to build a specific plan and elevation within a specific community. A bid contract is a lump sum bid from a subcontractor or supplier that represents an agreement of pricing for labor and materials. Using bid contracts for subcontracting work is also known as turnkey building.

With takeoffs, a subcontractors does not have the capital to purchase materials for the construction and therefore the builder is responsible for purchasing and delivering the materials to the job site. Unlike bid contracts, the builder typically purchases the materials and labor separately. A takeoff is a list of materials and quantities that are required for the job.