Upon what factors are bids usually based?

Bids are typically based on labor and material estimates along with overhead because these factors provide a comprehensive view of the expected expenses involved in a project. Labor estimates involve calculating the number of hours required for the workforce and the associated wages, while material estimates account for the costs of raw materials needed to complete the project. Overhead includes indirect costs such as insurance, utilities, and equipment depreciation, which are crucial for ensuring that all costs associated with the project are adequately covered.

Accurate labor and material estimates are essential not only for pricing the bid competitively but also for ensuring profitability. By incorporating overhead into the bid, contractors can safeguard against unforeseen expenses during the project's execution, making it a fundamental aspect of bid preparation. This approach helps in presenting a well-rounded and financially sound bid to clients.