The tender, which is submitted by the competing firms, is generally based on a bill of quantities, a bill of approximate quantities or other specifications which enable the tenders to attain higher levels of accuracy, the statement of work.
For instance, a bill of quantities is a list of all the materials (and other work such as amount of excavation) of a project which have sufficient detail to obtain a realistic cost, or rate per described item of work/material.
Either the costs that the contractor incurs are greater than the price he is charging the client (as a consequence of a lower tender determining the contract sum), and thus is likely to go insolvent, or he will claim for "loss and/or expense" due to discrepancies in the contract documents (this can be done deliberately).
In addition to the bid number, the contractor must be technically qualified and carry liability insurance.
These services act as a gateway for project owners to release project information to a large group of contractors, general contractors or subcontractors in an attempt to solicit bids.
Many of these services are subscription based or charge a flat rate for project data.
The language of the bid or offer can impact the court's determination of whether the subcontractor intended for further negotiations to take place, or whether the bid was intended to be an option or unilateral agreement to enter into a contract upon acceptance of the offer.
This process begins with an owner selecting an architect to prepare construction documents.