In construction, what does the term 'bid price' refer to?

The term 'bid price' specifically refers to the price submitted by a contractor for a project during the bidding process. This figure is the contractor's offer to perform the work required for the project and encompasses their estimated costs for labor, materials, overhead, and profit. By presenting a bid price, the contractor is competing with others in an attempt to win the contract for construction work. This amount is typically calculated based on the detailed plans and specifications provided by the project owner.

Understanding this definition is crucial as it highlights the nature of the bidding process and the competitive landscape in construction, where contractors must provide a bid price that is both appealing to the project owner and financially viable for themselves. The bid price can serve as a foundation for negotiations or might be adjusted later based on the scope of work modifications or contract negotiations, but at its essence, it represents the initial price a contractor is willing to accept for undertaking the job.