Three roofing bids arrive for a 24,000 square foot flat roof on a garden-style apartment building: $84,000, $97,500 and $112,000. The asset manager wants the $84,000 bid approved by Friday. Read the three documents side by side and the picture changes. The $84,000 bid excludes tear-off disposal and the permit, carries a 10-year contractor warranty, and allows for ten sheets of deck replacement when the roof consultant's survey suggests forty. The $112,000 bid includes everything, carries a 20-year manufacturer's no-dollar-limit warranty, and prices forty sheets of deck. The cheapest bid is not the cheapest roof; it is the bid with the most left out.
A bid comparison template is the tool that finds that out before the contract is signed rather than in the change orders afterwards. This post gives the template, works the three roofing bids through it, explains how to write the scope of work so bids arrive comparable in the first place, lists the red flags that show up in the levelling, sets out when three bids are required by someone other than you, and covers how to record the award so the losing bids are still there when the question comes up two years later.
Definition
Bid levelling (also called bid tabulation or normalising bids) is the process of adjusting each contractor's bid so that all bids cover the same scope, the same quantities, the same allowances, the same warranty and the same terms, so that the resulting levelled totals can be compared directly. A bid comparison template is the worksheet that does it: one column per bidder, one row per item of scope, cost and risk, with the adjustments shown and the levelled total at the bottom. RIOO's rule for property managers is that the low bid is rarely the low cost until it has been levelled.
At a glance
| Question | Answer |
|---|---|
| What is bid levelling? | Adjusting each bid so all bids cover the same scope, quantities, allowances, warranty and terms, then comparing the adjusted totals |
| Why do it? | The lowest number on the cover page usually has the most excluded; the gaps come back as change orders after award |
| What goes in the template? | Line items by scope, inclusions, exclusions, allowances and unit rates, schedule, warranty, insurance, payment terms, the levelled total, and a change-order exposure estimate |
| What does the worked example show? | Bids of $84,000, $97,500 and $112,000 level to $94,550, $98,450 and $112,000; per warranty year, the dearest bid is the cheapest at $5,600 against $9,455 for the low bid |
| When are three bids required? | Commonly by owner management agreements above a spend threshold, HOA and condominium bylaws, public housing and HUD-funded work, lender covenants for capital items, and many owners' internal policies |
| What is the biggest cause of non-comparable bids? | A scope of work that leaves room for interpretation; the RFP decides how comparable the bids will be before any contractor prices them |
What bid levelling is, and why the cover-page number lies
Contractors price what the request asks for, and where the request is vague, each contractor fills the gap with its own assumptions. One assumes the owner will pay the permit; another prices it. One allows a token quantity for hidden repairs to keep the number low; another prices what it expects to find. One includes a manufacturer's warranty that costs money to register; another offers its own letter. The three numbers that result are three different jobs.
Levelling reverses that, and it is the only reliable way to compare contractor bids. For each bid, the manager identifies what is missing relative to the full scope and adds a cost for it (from another bidder's price for the same item, or from a reasonable estimate), normalises the quantities and allowances to a common basis, and records the items that cannot be priced (warranty length, schedule, payment terms) beside the number so that the decision sees them. The output is a set of levelled totals that describe the same job, plus a view of which bidder is carrying which risk.
The reason it matters in property, more than in a one-off construction project, is volume. A portfolio awards dozens of jobs a year, and a habit of taking the cover-page number compounds into a habit of paying change orders. It is also the stage of the vendor lifecycle where the rate card and the scope are set, so a poor comparison is locked in for the life of the contract.
The bid comparison template
The template is a worksheet with one column per bidder and the rows below. It works for a capital project (roof, paving, elevator modernisation), for a service contract (landscaping, cleaning, snow) and, in a shorter form, for comparing rate cards from trade vendors. Fill every row for every bidder; a blank is an assumption.
| Section | Row | What to enter | Why it matters |
|---|---|---|---|
| Header | Bidder, date, bid validity period, contact, licence and insurance confirmed | Basic identification; a bid that expires before the owner meets is not a bid | Filters out bids that cannot be accepted |
| Base scope | Line items from the scope of work, each with quantity, unit and the bidder's price | Line-by-line, not lump sum; if a bidder gave a lump sum, ask for the breakdown before levelling | Lets scope gaps be found and priced |
| Inclusions | Items the bidder has confirmed are included: permits, disposal, protection of finishes, site clean-up, mobilisation, supervision, testing, as-builts, training | Mark included, excluded or unclear for each | The unclear column is where the change orders live |
| Exclusions | Items the bidder has expressly excluded, with a cost to add from another bid or an estimate | Priced and added to that bidder's total in the levelling section | Makes excluded scope visible as a cost, not a footnote |
| Allowances | Any item priced as an allowance (unknown quantity or specification), with the quantity and unit rate assumed | Normalise every bidder to the same quantity using each bidder's own unit rate | Low allowances are the commonest way to win a bid and lose the job |
| Unit rates for extras | The rate for likely additional work (per square of deck, per linear foot of curb, per hour of labour, materials markup) | Requested in the RFP; used to price allowances and to estimate change-order exposure | Decides what the job costs when the unknowns arrive |
| Schedule | Start date, duration, working hours, phasing, weather assumptions, liquidated damages if any | Recorded, not priced; converted to a cost only where the property can quantify it (a longer roof job in a leasing season, a lift out during move-ins) | A cheaper bid that takes four weeks longer is not always cheaper |
| Warranty | Contractor workmanship warranty (years); manufacturer material or system warranty (years, type, registration cost, transferable or not) | Recorded; the levelled total divided by warranty years gives a cost-per-year comparison | The single biggest hidden value difference between bids on roofing, paving and plant |
| Insurance and bonding | Limits confirmed against the trade minimums; performance and payment bond offered and its cost | Included or added | See the onboarding checklist for the minimums by trade |
| Payment terms | Deposit percentage, progress payments, retention (retainage) percentage and release, final payment conditions | Recorded; large deposits are a risk item | A 50% deposit shifts the property's risk to the contractor's cash flow |
| Qualifications and references | Comparable projects, references contacted, crew size, subcontractors named | Recorded | Capacity to do the job on the schedule |
| Levelled total | Base scope plus priced exclusions plus allowance normalisation | The number to compare | Same job, three prices |
| Change-order exposure | The manager's estimate of likely extras beyond the levelled scope, priced at each bidder's unit rates | An estimate, labelled as such, added to give an expected final cost | The bid that wins on paper and loses on change orders shows up here |
| Cost per warranty year | Levelled total divided by the longer of workmanship and manufacturer warranty, for long-life assets | A comparison figure, not a payment | Turns warranty length into money |
| Award note | Which bid, why, who approved, date; losing bids retained | Written at award and filed with the bids | The record that answers the question two years later |
Two disciplines make the template work. First, every adjustment is written down with its source: "disposal added at Bidder B's price of $6,500" rather than a silently altered total. Second, the manager does not change a bidder's numbers; the manager adds rows to make bids comparable and, where a bidder's assumption is unclear, asks the bidder in writing and records the answer. A bid that has been levelled by adding the bidder's own answers is defensible; a bid that has been edited is not.
Worked example: three roofing bids levelled
The building is a garden-style apartment community with a 24,000 square foot flat roof, TPO over an existing built-up roof, full tear-off specified. The roof consultant's survey estimates roughly forty 4×8 sheets of deteriorated deck to replace. Three bids arrive.
| Item | Bidder A | Bidder B | Bidder C |
|---|---|---|---|
| Bid total (cover page) | $84,000 | $97,500 | $112,000 |
| Tear-off and disposal | Tear-off included; disposal excluded | Included | Included |
| Permit | Excluded | Included | Included |
| Deck replacement allowance | 10 sheets at $95 | 30 sheets at $95 | 40 sheets included |
| Workmanship warranty | 10 years (contractor letter) | 15 years (contractor) | 20 years contractor plus 20-year manufacturer NDL system warranty |
| Schedule | 3 weeks | 4 weeks | 4 weeks |
| Payment terms | 50% deposit, balance on completion | 30% deposit, progress, 10% retention | 10% deposit, progress, 10% retention |
| Unit rate for extra deck | $95 per sheet | $95 per sheet | $110 per sheet |
Levelling, with every adjustment shown:
| Levelling step | Bidder A | Bidder B | Bidder C |
|---|---|---|---|
| Cover-page total | $84,000 | $97,500 | $112,000 |
| Add excluded disposal (at Bidder B's itemised price) | + $6,500 | included | included |
| Add excluded permit (at the city's fee) | + $1,200 | included | included |
| Normalise deck allowance to 40 sheets at each bidder's own rate | + 30 × $95 = $2,850 | + 10 × $95 = $950 | included |
| Levelled total (same scope, same quantities) | $94,550 | $98,450 | $112,000 |
| Warranty basis | 10 years | 15 years | 20 years, manufacturer-backed |
| Cost per warranty year | $9,455 | $6,563 | $5,600 |
| Deposit at signing | $42,000 | $29,250 | $11,200 |
Read across. On levelled cost alone, A is still lowest at $94,550, but the gap to B has narrowed from $13,500 to $3,900, and the gap to C from $28,000 to $17,450. On cost per warranty year, the order reverses: C is the cheapest roof at $5,600 a year, A the dearest at $9,455. On risk, A wants half the money before a sheet of membrane is on the roof, and A's 10-year letter is only as good as the contractor's survival for ten years; C's manufacturer warranty survives the contractor.
The change-order exposure row completes it. The consultant's forty sheets is an estimate; if the tear-off reveals sixty, A and B charge $95 a sheet for the extra twenty ($1,900) and C charges $110 ($2,200). That is small against the other differences and confirms that the allowance normalisation, not the unit rate, was where A's number had been kept low.
What the owner sees is then a decision, not a number: A is $17,450 cheaper on a levelled basis over a 10-year horizon, and C is $3,855 a year cheaper over a 20-year one. For an owner holding the asset for five years, A may still be right, with the deposit negotiated down. For a long-hold owner, C is the lower-cost roof. Either way, the $84,000 on the cover page was never the price of the job.
Writing the RFP so bids arrive comparable
Most of the work of levelling can be avoided by writing the scope of work so that there is nothing to assume. The scope of work comparison in the template is only as hard as the scope was vague.
The request for proposal should contain, at minimum: a line-item scope with quantities where they are known and a stated basis where they are not (the consultant's survey, the drawings, the site walk); a list of the items the bidder must include (permits, disposal, protection, clean-up, supervision, testing, close-out documents) with an instruction that anything excluded must be listed and priced; a required allowance quantity for every unknown, so that every bidder carries the same forty sheets of deck; a request for unit rates for the likely extras; the warranty required, with the manufacturer system warranty specified where one exists; the insurance and bonding requirements; the schedule constraints (occupied building, leasing season, working hours); the payment terms the property will accept; and a bid form that makes the bidders fill in the same rows in the same order.
The bid form is the part most managers skip and most regret. Three contractors each submitting their own proposal format produce three documents that have to be reverse-engineered into the template. Three contractors filling in the property's bid form produce the template, already populated. Apples-to-apples bids are made in the RFP, not in the levelling.
A pre-bid site walk with all bidders together, with questions and answers circulated to all in writing, removes the last set of assumptions. A bidder who did not attend, or whose bid contradicts the written answers, has told you something about how they will run the job.
Red flags in a bid
Some of what the levelling reveals is a scope gap; some of it is a warning. The items below are the ones to take seriously.
| Red flag | What it looks like | What it usually means |
|---|---|---|
| Unbalanced pricing | Early-stage items (mobilisation, tear-off) priced high; late-stage items priced low | Front-loading cash; the contractor is paid most of the money before most of the work, and the incentive to finish weakens |
| Allowances well below the survey | Ten sheets of deck against a survey of forty | The number was built to win; the difference arrives as change orders |
| Large deposit | 40% to 50% up front on a job with no long-lead materials | Cash-flow stress at the contractor, or a habit of funding one job from the next |
| Lump sum with no breakdown | A single figure and a one-paragraph scope | Cannot be levelled; ask for the breakdown, and treat refusal as an answer |
| Exclusions in the fine print | Permits, disposal, engineering, testing or protection listed at the end in small type | Standard tactic; price them in |
| Warranty by letter only | "We warrant our work for 10 years" with no manufacturer system warranty on a roofing or paving job | The warranty is worth what the contractor is worth in year eight |
| No named subcontractors on specialist scope | Electrical, plumbing or fire work on a general contractor's bid with no sub named | Either self-performed without the licence, or not yet priced |
| Bid well below the others | One bid 20% or more under the levelled field | A misread scope, a missing item, or a contractor who needs the work badly; find out which before awarding |
| Bid well above the others | One bid 20% or more over | Often a contractor who does not want the job; occasionally the only one who read the survey |
| Insurance below the minimums or expiring | Limits under the trade schedule, or a certificate expiring mid-job | Cannot be onboarded until fixed; see COI tracking |
The general rule: a bid that needs a lot of levelling to compare is telling you how the job will go. The contractor who priced the full scope, named the subcontractors, matched the allowances to the survey and asked for a reasonable deposit has already shown the discipline the job will need.
When three bids are required
Many property managers treat three bids as a habit. For a large share of the work, it is a requirement imposed by someone else, and the requirement usually comes with rules about how the bids are obtained and recorded.
| Who requires it | Typical rule | What to check |
|---|---|---|
| Owner management agreement | Competitive bids (often three) above a spend threshold, commonly $5,000 to $25,000; owner approval above a higher threshold | The exact threshold, whether it is per job or per vendor per year, and whether emergency work is exempt |
| HOA and condominium associations | Bylaws or board policy requiring multiple bids for contracts above a threshold; some states regulate association procurement | The bylaw text; board minutes recording the bids and the award |
| Public housing and HUD-assisted properties | Federal procurement standards (2 CFR 200 for federal awards; HUD procurement handbooks for public housing agencies) set methods by dollar range, from micro-purchases to sealed bids, with documentation requirements | Which method the dollar range triggers; cost or price analysis; records retention |
| Lenders and agency loans | Capital repair reserves and replacement reserve draws often require bids or a cost estimate before release | The loan agreement's reserve draw procedure |
| Insurance claims | Adjusters commonly want competing estimates for repair work above a threshold | The carrier's claim procedure |
| Institutional owners and fund policies | Internal procurement policies with thresholds and approved vendor lists | The owner's policy document, which usually also specifies the award record |
| UK: RICS service charge code and residential Section 20 | For leasehold residential property in England and Wales, statutory consultation (Section 20 of the Landlord and Tenant Act 1985) applies where any leaseholder would pay more than £250 for works, with a process for obtaining and notifying estimates | The consultation stages and timescales; failure caps recovery at £250 per leaseholder |
Where a rule applies, the bid comparison template is also the compliance record: it shows that the bids were sought, how they were compared and why the award was made, which is what an auditor, a board or a funder will ask for.
Recording the award and the losing bids
The award is a decision with a reason, and the reason is the levelling. The award note should state which bid was accepted, the levelled totals of all bids, the non-price factors that decided it (warranty, schedule, deposit, references), who approved it and under which authority (management agreement threshold, board vote, owner email), and the date. It is filed with all the bids, including the losing ones, and the RFP, the pre-bid Q&A and any bidder correspondence.
The losing bids are kept for three reasons. They are the evidence that the process was competitive if an owner, a board or a funder asks. They are the benchmark for the next job of the same kind, which is how a portfolio learns what a square of TPO costs in its market. And they are the source of the unit rates used to level the next set of bids, so that the manager is pricing exclusions from real numbers rather than guesses.
Retention follows the strictest rule that applies: the owner agreement, the association's records policy, the funding rule (federal awards commonly require three years from the final report) or the lender's requirement. Where none applies, keep them for the life of the asset the work relates to plus the warranty period, because the roof warranty claim in year twelve will begin with "what exactly did we buy".
Key facts
- Bid levelling adjusts each contractor's bid to the same scope, quantities, allowances, warranty and terms before comparing totals; RIOO's rule is that the low bid is rarely the low cost until it has been levelled.
- In the worked example, cover-page bids of $84,000, $97,500 and $112,000 levelled to $94,550, $98,450 and $112,000 once excluded disposal and permit were added and the deck allowance was normalised to forty sheets.
- On cost per warranty year, the order reversed: $9,455 (10-year), $6,563 (15-year) and $5,600 (20-year manufacturer-backed).
- Every levelling adjustment is written down with its source; the manager adds rows to make bids comparable and never edits a bidder's numbers.
- Apples-to-apples bids are made in the RFP, through a line-item scope, required allowance quantities, a list of mandatory inclusions, requested unit rates for extras and a common bid form.
- Allowances well below the survey, a deposit of 40% or more, a lump sum with no breakdown, exclusions in the fine print and a bid 20% or more below the field are the red flags to resolve before award.
- Three bids are commonly required by owner management agreements above a spend threshold, HOA bylaws, federal procurement rules for HUD-assisted housing, lender reserve procedures and, in England and Wales, Section 20 consultation for residential leasehold works over £250 per leaseholder.
- The award note and the losing bids are filed together and kept for the longer of the applicable records rule and the asset's warranty period.
Recording the comparison in the system
A bid comparison done in a spreadsheet on one manager's laptop is lost when the manager leaves, and the losing bids in an email thread are lost when the mailbox is archived. The comparison, the award note and every bid belong on the record for the job, linked to the vendor that won it and to the asset the work was done on, so that the next roof bid starts from what the last one cost and the warranty claim in year twelve starts from the contract.
In RIOO on NetSuite, service request and task management centralises vendor communication, documentation and task assignment, and supports comparing proposals, monitoring performance and managing contracts, which is where the bids, the levelling and the award note are kept against the job. The award becomes a purchase request that runs through approval to a purchase order in vendor management and accounts payable, and the contractor's progress invoices are matched to that PO, with duplicates flagged before they reach approval. The winning bidder's record, if new, goes through the onboarding checklist before the first payment.
Put the template to work. Take the last capital job you awarded, put the bids through the fourteen rows above and see whether the levelled total and the cost per warranty year would have changed the decision. To see how bids, purchase orders and invoices sit against one job record, book a walkthrough of RIOO's vendor management and AP module.
Frequently asked questions
Q1. What is a bid comparison template?
A worksheet with one column per bidder and rows for the scope line items, inclusions, exclusions, allowances, unit rates for extras, schedule, warranty, insurance and bonding, payment terms, qualifications, the levelled total, an estimate of change-order exposure, cost per warranty year for long-life assets, and the award note. It is used to level bids so that they describe the same job before they are compared.
Q2. How do you level contractor bids?
Identify what each bid excludes relative to the full scope and add a cost for it, using another bidder's itemised price or a reasonable estimate; normalise every allowance to the same quantity using each bidder's own unit rate; record the non-price items (warranty, schedule, deposit) beside the totals; and write down every adjustment with its source. Never edit a bidder's numbers; add rows and, where an assumption is unclear, ask the bidder in writing.
Q3. Why is the lowest bid not always the cheapest?
Because contractors price what the request asks for and fill gaps with their own assumptions. The lowest cover-page number is often the bid with the most excluded (permits, disposal, protection), the smallest allowances for unknowns, the shortest warranty and the largest deposit. In the worked example, an $84,000 bid levelled to $94,550 and cost $9,455 per warranty year, against a $112,000 bid at $5,600 per warranty year.
Q4. When do property managers need three bids?
When an owner management agreement requires competitive bids above a spend threshold (commonly $5,000 to $25,000), when an HOA or condominium bylaw requires them, on HUD-assisted or other federally funded work under the applicable procurement standards, when a lender's reserve draw procedure requires estimates, for insurance claims above the carrier's threshold, and, for residential leasehold works in England and Wales, under Section 20 consultation where any leaseholder would pay more than £250.
Q5. How long should losing bids be kept?
For the longer of the applicable records rule (owner agreement, association policy, funder requirement, lender covenant) and the life of the asset the work relates to plus its warranty period. Losing bids are the evidence that the process was competitive, the benchmark for the next job and the source of unit rates for levelling future bids.
Note : Figures in the worked example are illustrative. Where an owner agreement, association bylaw, lender covenant or public funding rule sets a bidding procedure, that procedure governs.
Related reading
- Vendor management in property management: the lifecycle guide
- Vendor onboarding checklist for property management
- Vendor SLA for property management: template with the three clocks
- The vendor you cannot replace: concentration risk in property operations
- COI tracking for property managers: what a certificate actually proves
- Understanding property management accounts payable basics
