What distinguishes a “Bid” from an “Estimate”?

The distinction between a "Bid" and an "Estimate" is primarily rooted in their formality and purpose in the contracting process. A Bid is a formal offer submitted by a contractor in response to a request for proposals, often involving specific terms regarding pricing, scope of work, timelines, and conditions. It is detailed and binding, meaning that once accepted, it creates a legal obligation for both parties to adhere to the proposed terms.

On the other hand, an Estimate typically refers to a rough calculation or approximation of costs associated with a project. It is not binding and serves as a guideline for potential expenses rather than a definitive price quote. Estimates allow clients to understand the potential costs involved but do not obligate the contractor to deliver the work at that price.

This distinction highlights why identifying a Bid as a formal offer and an Estimate as a rough calculation is essential in the context of contracts and pricing in the construction industry.