Base Bid

Definition

A base bid is a stipulated sum of money specified in the contract documents for a construction project. It represents the initial, core cost proposed by a contractor to complete the work as outlined in the project specifications and drawings, excluding any alternates or additional work.

Purpose

The base bid establishes a clear, baseline financial proposal for a construction project. It allows clients and stakeholders to understand the fundamental cost of the project as per the provided specifications. This helps in budgeting, comparison of bids from different contractors, and ensuring that the core requirements of the project are met without considering optional or additional work.

Examples of Use

1. Project Tendering: When a client invites contractors to bid on a construction project, each contractor submits a base bid reflecting the cost to complete the project as specified in the contract documents.
2. Contract Awarding: Clients review base bids from multiple contractors to select the most competitive and suitable bid for their project needs.
3. Cost Management: The base bid serves as a reference point for managing project finances, ensuring that any additional costs are justified and agreed upon separately.
4. Change Orders: If changes or additional work are required during the construction, they are addressed through change orders, which are separate from the base bid.

Related Terms

• Alternate Bid: A proposal for optional work or materials not included in the base bid, often used to offer different options or upgrades.
• Bid Estimate: The detailed calculation of costs that forms the basis of a contractor’s bid, including labor, materials, equipment, and overhead.
• Addendum: A document issued during the bidding process that modifies or clarifies the contract documents, which can impact the base bid.
• Bid Bond: A type of surety bond submitted with a bid, providing financial assurance that the contractor will honor their bid if selected.
• Change Order: A formal document that authorizes changes to the original scope of work, specifications, or contract amount, separate from the base bid.

Notes

• The accuracy of the base bid is crucial for both the client and the contractor to avoid disputes and ensure the project stays within budget.
• Contractors must thoroughly review contract documents to develop a comprehensive base bid that covers all specified work.
• Any exclusions or assumptions made in the base bid should be clearly stated to avoid misunderstandings later in the project.
• The base bid does not include any allowances for unforeseen conditions or client-requested changes, which are typically handled through separate negotiations and change orders.