Bidding renovation work requires a fundamentally different approach than bidding new construction. The unknowns, constraints, and risk profiles differ significantly. Contractors who understand these differences and adjust their bidding strategies accordingly win more work and maintain better margins.
Key Differences Between Renovation and New Construction
Site and Access Differences
New Construction
- Clean, open site (usually)
- Controlled access
- Logical construction sequence
- Purpose-built staging areas
Renovation
- Existing building constraints
- Limited access points
- Working around occupied spaces
- Restricted staging and storage
Documentation Differences
New Construction
- Complete drawings and specs
- Defined scope
- Coordinated documents
- Few unknowns
Renovation
- Existing conditions may differ from drawings
- Hidden conditions expected
- As-built accuracy varies
- Scope develops as work proceeds
Risk Profile Differences
New Construction
- More predictable conditions
- Defined quantities
- Known materials
- Schedule control
Renovation
- Unknown conditions likely
- Quantity uncertainty
- Material matching challenges
- Schedule disruptions common
Estimating Renovation Projects
Existing Conditions Assessment
Before pricing, thoroughly evaluate:
Physical Investigation
- Site visit essential (never bid renovation without visiting)
- Probe, test, and examine where possible
- Document what you find and what you can't see
- Photo document existing conditions
Document Review
- Original as-built drawings (if available)
- Previous renovation records
- Building permits and inspections
- Maintenance records
Owner Interviews
- Known problems and issues
- Previous work performed
- Building history
- Operational constraints
Pricing for Unknown Conditions
Contingency Approach
Build contingency for what you can't see:
| Condition | Typical Contingency Range | |-----------|-------------------------| | Structural behind walls | 5-15% of structural work | | MEP in walls/ceilings | 10-20% of MEP work | | Hazmat (if not tested) | Allowance + contingency | | Foundation conditions | 10-25% if not exposed |
Allowance Approach
Use defined allowances:
Known demolition: $50,000
Allowance for additional demolition: $15,000
(Owner approval required to exceed)
Unit Price Approach
For variable quantity items:
Drywall repair: $12/SF
Electrical outlet relocation: $350/each
Estimated quantity: 50 outlets
Actual quantity at unit price
Labor Productivity Adjustments
Renovation work is typically less productive:
Access Limitations
- Small openings reduce efficiency
- Elevator capacity constraints
- Long carry distances
- Material protection requirements
Working Conditions
- Occupied building restrictions
- Noise limitations
- Dust control requirements
- Work hour restrictions
Complexity Factors
- Matching existing conditions
- Unusual configurations
- Rework and adjustment
- Coordination challenges
Typical Productivity Adjustments
- Minor renovation: 10-15% reduction
- Major renovation, unoccupied: 15-25% reduction
- Occupied building: 25-40% reduction
- Historic building: 30-50% reduction
Material Considerations
Matching Existing
- Custom matching may be required
- Discontinued materials
- Specialty sourcing
- Higher costs than standard materials
Waste Factors
- Higher waste in renovation
- Fitting and cutting around existing
- Damage during construction
- Typical increase: 10-20% above new construction
Protection Costs
- Protecting existing finishes
- Dust barriers and containment
- Floor protection
- Furniture moving and storage
Estimating New Construction
Quantity-Based Approach
New construction allows systematic takeoff:
- Complete drawings enable full quantity development
- Standard calculation methods apply
- Assembly-based pricing works well
- Database pricing applicable
Productivity Assumptions
Standard productivity factors apply:
- Open site access
- Logical construction sequence
- No existing condition constraints
- Full work day availability
Material Pricing
Standard procurement:
- Bulk ordering efficiencies
- Standard products
- Normal waste factors
- Competitive supplier pricing
Risk Allocation
More definable risk:
- Scope is defined
- Quantities are calculable
- Conditions are knowable
- Contract risk more predictable
Contract Considerations
Renovation Contract Terms
Changes and Extra Work
- Clear change order process
- Unit prices for likely extras
- Differing conditions clauses
- Allowance management procedures
Schedule Terms
- Realistic schedule with owner input
- Weather days and delay provisions
- Access schedule and limitations
- Phasing requirements
Owner Responsibilities
- Access provision
- Decision timing
- Owner-furnished items
- Relocation of occupants/operations
New Construction Contract Terms
Standard Terms Often Work
- Industry standard forms
- Less customization needed
- Clear risk allocation
- Predictable processes
Key Provisions
- Schedule requirements
- Liquidated damages
- Weather provisions
- Change order process
Bid Strategy Differences
Renovation Bid Strategy
Price to Include Risk
- Don't underprice unknowns
- Contingency is essential
- Margin should reflect risk
- Document assumptions clearly
Communicate Understanding
- Show you've visited the site
- Demonstrate renovation experience
- Highlight investigation performed
- Address known challenges
Clarify Scope
- Define what's included
- Identify assumptions
- Note excluded items
- Specify allowances and conditions
New Construction Bid Strategy
Competitive Pricing
- More predictable scope enables tighter pricing
- Competition often intense
- Efficiency advantages matter
- Value engineering opportunities
Standard Approach
- Full takeoff and pricing
- Normal contingency levels
- Industry-standard terms
- Systematic bid assembly
Subcontractor Considerations
Renovation Work
Sub Selection
- Experience in renovation critical
- Flexibility and adaptability valued
- Problem-solving capability
- Communication skills important
Sub Pricing
- Expect higher pricing than new work
- Include their contingency
- Unit prices for variables
- Clear scope definition even more important
New Construction
Sub Selection
- Volume and capacity matter
- Price competitiveness emphasized
- Track record on similar work
- Standard qualification criteria
Sub Pricing
- More competitive market typically
- Standard scope packages
- Volume pricing possible
- Clearer comparisons
Schedule and Sequencing
Renovation Schedules
Duration Factors
- Limited work areas
- Phasing requirements
- Discovery and response time
- Longer duration per unit of work
Sequencing Challenges
- Occupied space constraints
- Critical path through limited access
- Dependency on discoveries
- Owner operation requirements
Contingency Time
- Build in schedule float
- Acknowledge uncertainty
- Plan for discovery impacts
- Flexible milestone approach
New Construction Schedules
Predictable Duration
- Industry standards apply
- Experience-based estimates
- Weather and season factors
- Standard sequencing
Optimization Possible
- Fast-track options
- Trade stacking
- Prefabrication opportunities
- Resource loading flexibility
Win Rate and Margin Expectations
Renovation Work
Higher Margins Expected
- Risk commands premium
- Unknowns justify contingency
- Lower competition sometimes
- Specialization valued
Win Rate Variation
- Experience differentiates bidders
- Owners value renovation expertise
- Demonstrated capability matters
- Relationships important
New Construction
Tighter Margins
- More competition typically
- Predictable scope = tighter pricing
- Volume may compensate
- Efficiency advantages
Win Rate Factors
- Price often dominant factor
- Qualifications establish threshold
- Competitive market dynamics
- Relationships still matter
Choosing Your Focus
Renovation Specialization
Consider if you have:
- Experienced renovation workforce
- Patience for complexity
- Problem-solving culture
- Tolerance for uncertainty
- Ability to price risk
New Construction Focus
Consider if you have:
- Volume capacity and efficiency
- Competitive cost structure
- Systematic processes
- Equipment advantages
- Price competitiveness
Balanced Approach
Many contractors do both:
- Diversified revenue
- Counter-cyclical markets
- Different crews/teams
- Varied opportunity pursuit
Conclusion
Success in renovation bidding requires acknowledging and pricing for the inherent uncertainties, while new construction bidding rewards efficiency and systematic pricing. Neither is inherently better - they're different, and the best contractors understand how to adjust their approach accordingly.
Before bidding any project, honestly assess whether it fits your capabilities and experience. A renovation contractor forced into new construction mentality will likely lose money or bids, and vice versa.
Know your strengths, price appropriately for the project type, and build your track record in the areas where you can compete effectively.
ConstructionBids.ai categorizes projects by type, helping you identify renovation and new construction opportunities that match your expertise and experience.
