What is the Difference Between Contractor Estimates and Bids?

When you need to have a remodel or renovation done on your property, you will need a contractor. It is vital to take your time searching for a seasoned, skilled, and reputable contractor to work with. Otherwise, you can face some awful contractor scams, or worse, a terribly botched job that puts your family or occupants at risk.

During your search for the right contractor, you will notice that some offer bid-style proposals, while others offer estimate-style proposals. This may confuse you since they often seem similar, which is why it is important to understand the difference before moving forward with any work.

Continue reading to learn the primary differences between contractor bids and estimates, including some pros and cons of each.

Indianapolis Roofing Contractors 317-506-1358
Indianapolis Roofing Contractors 317-506-1358


Estimate proposals are also known as “time and material” proposals or “cost-plus contracts.” This is because such proposals are written out in meticulous detail, itemizing all materials, hours worked, subcontractor labor, and everything else needed to complete the project (i.e. permits, dumpster roll-offs, portable toilets, etc.). The hired contractor includes their own fee, which is a set percentage of the total cost of the project.

Many consumers prefer estimate proposals because they are transparent. This also helps when comparing contractors’ estimates. However, estimate proposals can be very lengthy and can sometimes pose the risk of paying for higher-end subcontractors since you have no control over that aspect of the project.


Bid-style proposals are also known as “fixed-priced” proposals or “all-inclusive pricing” since a contractor will provide a comprehensive total for your project after making a full assessment. These are well-suited for small renovations or remodeling projects, such as dishwasher installation or water heater replacement. For larger-scale needs, predicting all costs can be more of a challenge.

Within a bid-style proposal, there is usually a hidden contingency fee that covers any moderate budget extensions, however, it only covers so much. In the case that a large repair or remediation is needed, the contractor will use this fee as a buffer to cover high unexpected costs that might affect their overall profit margin. Be sure to discuss this with all contractors you interview for the job.

Who to Trust for Honest Estimates and Skilled Craftsmanship

Indianapolis Roofing Contractors 317-506-1358
Indianapolis Roofing Contractors 317-506-1358

Call RMG Roofing at 317-506-1358 for professional and affordable roof work in Indianapolis, Indiana. We are veterans in the home and building construction industry, and provide a wide range of residential and commercial roofing services, including repairs, replacements, inspections, and more. We also have a general contracting division that provides residential project management and remodeling services. Request an estimate, today.

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