Essential Contractor Bid Checklist Before Signing

Contractor bid checklist

Use this checklist on every bid before you sign. A missing item does not always mean that the bid is bad. But each gap is a question to ask the contractor in writing.

Area	What the bid or contract must show	Ask the contractor when
Contractor	Legal business name, address, phone and license number	The name is different from the license record, or the bid has no license number
Insurance	Current certificates for liability, workers’ compensation and property damage	The contractor only says “we are insured”
Scope	Each task, with materials named by brand, model, size and color	The scope is one line, for example “bathroom remodel”
Exclusions	The work that the price does not include, for example permits, debris removal or painting	The bid excludes nothing
Price	Labor, materials, permits, equipment and other costs as separate lines	The bid gives one total only
Allowances	A budget for items that you select later, and the name of the person who selects them	An allowance is too low for the items that you want
Payments	A small deposit, then payments for finished stages of work	Most of the money is due before work starts, or the contractor accepts only cash
Schedule	Estimated start date and completion date	The bid has no dates
Permits	The name of the party that gets the permits	The contractor asks you to get them
Change orders	A written process for changes, with the cost and the effect on the schedule	The contractor says that changes “get sorted out on site”
Warranties	Workmanship and material warranties, their length, their limits and who honors them	The warranty terms are missing or unclear
Cleanup	The party that cleans up and removes debris	The bid does not mention cleanup
Right to cancel	A written notice of your right to cancel, if you signed at home	The notice is missing

Most of these items come from the FTC guide to hiring a contractor and its advice on home improvement scams. Contract rules are different in each state. Ask your state or local consumer agency about the rules where you live.

Research the contractor before the price

1. Get the license number from the contractor.
2. Look up the license with your state or county licensing office. Make sure that the business name on the bid is the same as the name on the record.
3. Ask for copies of the insurance certificates. Make sure that each certificate is current.
4. Ask the contractor if the job uses subcontractors. If it does, make sure that each subcontractor has current insurance and, where your state requires it, a license.
5. Ask for at least three clients with similar projects. Ask each client if the job finished on time, if there were unexpected costs and if the crew cleaned up.

Do not hire a contractor without current insurance. According to the FTC, you can be liable for injuries and damage during the project if the insurance is not current.

Scope of work and exclusions

Most disputes start with the scope. “Bathroom renovation” is not a scope. A usable scope lists the work step by step. For example: remove the old tile, install plumbing for a new shower valve and add recessed lights. Then it names the floor tile by size and color, the paint for walls and ceiling, and the debris removal.

Use this test: can a different contractor build the same thing from this text? If not, ask for more detail before you compare the bid with other bids.

Read the exclusions with the same care. A good bid tells you what it does not include. If a bid has no exclusions, the gaps can come back later as change orders.

Price breakdown

One total price hides the numbers that you need to compare bids. Ask for these lines:

• Labor, as a total for each phase, or as an hourly rate with estimated hours
• Materials, with brand, model, quantity and unit price
• Permit fees, and the name of the party that applies for the permits
• Equipment rental and disposal fees
• Overhead and profit
• Contingency and allowance amounts
• Sales tax, and a statement that tells you if the total includes it

If one bid includes tax and another bid does not, the real difference between them is not the difference between the totals.

Payment schedule

• Deposit: Keep the deposit small. Some states set a limit. In California, the down payment on a home improvement job cannot be more than $1,000 or 10% of the contract price, whichever is less. Later payments in California cannot be more than the value of the work done.
• Progress payments: Connect each payment to a defined stage of finished work, not to a date. If the work is late, the payments are late too.
• Payment method: Do not pay in cash. The FTC lists a request for full payment up front or for cash only as a sign of a scam.
• Final payment: Pay it only after a walkthrough shows that the work agrees with the contract.
• Lien waivers: Ask the contractor, and each subcontractor and supplier, for a lien release before the final payment. In some states, an unpaid subcontractor or supplier can file a mechanic’s lien against your home, even if you paid the contractor.

A lien waiver (or lien release) is a signed release of the right to file a lien. A mechanic’s lien is a legal claim against your home for unpaid work.

Change orders

A change order is a written approval for work that is not in the contract. Renovations often find problems that nobody priced, for example a rotted subfloor or old wiring. Make sure that the bid tells you how changes work:

1. The contractor writes down each change before work on it starts.
2. The change order gives the new work, its cost for labor and materials, and its effect on the schedule.
3. You and the contractor both sign the change order.

Also find out how the contractor prices changes. A fixed price for each change gives you a known cost. Time-and-materials pricing (you pay for hours and materials used) has no upper limit. If the contractor uses it, ask for a maximum amount.

Warranties and dispute terms

• Workmanship warranty: its length, what it covers and what it excludes
• Material warranties: transferred to you, with the name of the party that honors each one (contractor, distributor or manufacturer)
• Dispute resolution: a statement that tells you if mediation or arbitration comes before a lawsuit

Read the dispute clause before you sign, not after a problem starts.

Compare bids side by side

Put the bids in one table. Then add the cost of the excluded work to each total. In this example, the lowest bid is not the lowest after you add back the excluded work:

	Contractor A	Contractor B	Contractor C
Bid total	$78,000	$92,000	$65,000
Excluded work	None	None	Permits, debris removal, painting
Adjusted total	$78,000	$92,000	About $80,000
Materials	Builder grade	Commercial grade	Builder grade
Workmanship warranty	1 year	2 years	90 days
Deposit	30%	15%	50%

Fill in the same rows for each of your bids. If a bid leaves a row empty, ask the contractor about that row next.

Use this checklist with Claude or ChatGPT

Claude or ChatGPT can do a fast first pass. Paste the checklist into the chat and attach one or more bids. Then ask the AI to go through each item:

Below is my contractor bid checklist, followed by three bids.
For each bid, go through the checklist item by item and say whether
the bid covers it, quoting the line that does. List every missing
item as a question I should ask the contractor. Then fill in a
side-by-side table with the rows from the checklist.

Do not trust a finding until you find it in the bid yourself. The AI can miss a line or report something that the bid does not say. Remove your address, phone numbers and account details before you upload a bid. For a large contract or a dispute, ask a construction lawyer or your state’s contractor licensing board.

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