Pricing Federal Construction Work
How to build an estimate that is competitive and still profitable on a federal job.
Winning federal construction work is not only about the lowest number. It is about a price that is competitive on the evaluation and still covers your real costs.
Build up from the scope
- Start from the statement of work and drawings, not from a competitor's number.
- Price labor at the correct classification and wage, including burdens and fringe.
- Include material, equipment, freight, and applicable taxes.
- Add bonds, insurance, permits, and mobilization.
- Separate general conditions (supervision, temporary facilities, cleanup) from direct work.
Overhead and profit
Overhead is more than office rent: it includes administrative staff, estimating, safety, and the cost of carrying the work. Profit must reward risk — federal jobs carry bonding, compliance, and payment-timing risk that should be reflected, not ignored.
Concentrate on the evaluation
If price is scored, understand how — lowest price technically acceptable rewards efficiency; best value may reward quality. Check whether the estimate is realistic for the schedule, and whether liquidated damages for delay could swallow the margin.
General information for construction small businesses, not legal advice.