Alternates, allowances and unit prices in a bid

Published 6 October 2026. Updated 6 October 2026.

Three terms show up in almost every commercial bid and get mixed up: alternates, allowances and unit prices. Each one says something different about how the price can move. Writing them clearly is the difference between a bid that is easy to compare and one that starts an argument after award. This guide defines each, shows how it is priced, and covers the mistakes that cause trouble.

The base bid comes first

The base bid is the price for the work exactly as the documents describe it, with nothing optional in it. Everything else in this guide sits next to the base bid, not inside it. If a reader cannot find the base bid in one glance, the proposal needs work. See how to write a commercial HVAC bid proposal for the overall structure.

Alternates

An alternate is an option priced separately, as an add to or a deduct from the base bid. Bid documents often list alternates the owner wants priced. Contractors can also offer their own, called voluntary alternates, where the bid documents allow them. Some bid forms, especially on public work, do not.

Examples in mechanical work:

• Add: upgrade a rooftop unit to a higher efficiency model.
• Deduct: use a different pipe material where the specification permits it.
• Add: extend controls to an additional zone.

How to price one

1. Number it: Alternate 1, Alternate 2.
2. Describe exactly what changes from the base bid.
3. Price the change in cost: the difference in equipment, material and labor.
4. Add your overhead and profit, the same as in the base bid, unless you state otherwise.
5. Label it clearly as an add or a deduct, with the dollar amount.

As an invented example: an upgrade that costs $2,640 more than the base unit, with 15 percent overhead and profit added, becomes an add of $3,036. The base bid does not change. The owner picks the alternate or does not.

Alternate mistakes

• Folding the alternate into the base bid total.
• Stating a cost without markup when the base bid carries markup, or the reverse, without saying which.
• Not saying how long the alternate price holds.
• Describing the alternate loosely, so the scope change is unclear.

Allowances

An allowance is a set amount for work whose scope or cost is not known at bid time. It is a placeholder, not a promise. Hidden conditions behind existing walls and owner-selected finishes are typical cases.

Points to state:

• The amount. "Allowance of up to $6,500 for hidden conditions."
• What it covers. Which kinds of work can draw on it.
• Whether it is in the contract price. There are two common ways to write it. Inside the contract price, the allowance amount is carried in your total and the difference from actual cost is settled later, as a credit to the owner or an added cost. Outside the contract price, the allowance is listed separately and billed only if used. Say which one you mean.
• How it is billed. At actual cost, at actual cost plus markup, or another stated method. Say whether your markup is inside the allowance amount or added on top.
• What happens to the unused part. Inside the price it comes back as a credit; outside the price it is simply not billed.

The choice matters for deposits and progress billings, which are figured from the contract price. Many standard contract forms carry allowances inside the contract sum, so if the bid documents set out how allowances work, follow them and match the proposal to it.

Unit prices

A unit price is a price per unit of work, such as per fixture, per diffuser or per linear foot of pipe. It suits work where the quantity is uncertain or the job repeats the same operation many times, such as replacing fixtures across a multi-family building.

A typical statement reads: "42 fixtures at $685 each, $28,770, billed as fixtures are replaced." The total shown is an estimate based on the quantity assumed. The final bill follows the quantity actually done.

Unit price points to state

• The unit and exactly what the price includes. State whether overhead and profit are in the unit price.
• The assumed quantity.
• How quantity differences are handled, for example above or below a stated range.
• What is excluded from the unit, such as patching or access work.

Unit price mistakes

• Giving a unit price with no quantity, so the total cannot be checked.
• Mixing lump sum and unit work without separating them.
• Forgetting that a unit price job can end above or below the estimate, and not telling the buyer.

Comparison

Keep them separate on the page

Give base bid, alternates, allowances and unit prices separate headed sections, each with its own numbers. A reader should be able to total the base bid without reading the rest. If an allowance is carried inside the price, say so next to the base bid. Pair this with a clear list of what is left out. See what to exclude in a plumbing bid proposal.

How ScopeClerk handles this step

ScopeClerk drafts alternates, allowances and unit-priced work from the estimate and job facts you upload. The totals are computed by ordinary code, not by the model. By default, code applies your markup to an alternate's cost, and an alternate your estimate says already includes overhead and profit is not marked up again. Each alternate is shown as an add or a deduct beside the base bid, never inside it. An allowance is shown separately and is never part of the base bid. In the unit-price sample on the site, the deposit is computed on the contract price and the allowance does not change it. If your contract carries allowances inside the price, edit the draft to say so.

A second, stronger AI model reviews every result, fixes what it can, and lists what is left for you to decide. Results are model output checked by code and by a second model; they are not verified by a person. A proposal draft is 25 credits and a revision round is 25 more. To try it, sign up.

Questions

Should markup be included in an alternate price?

State it either way, but be clear. Many contractors carry the same overhead and profit on an alternate as on the base bid. If your number already includes it, say so, so the buyer does not add it again.

Can an alternate change the price after the contract is signed?

Owners often accept or reject alternates at award, and an accepted alternate becomes part of the contract price. Some contracts let the owner accept an alternate later, within a stated period, at the bid amount. That is why each alternate should say how long its price holds. Check your contract.

Who sets the quantity for unit pricing?

The bid documents often give an estimated quantity, and billing follows the quantity actually installed. If the documents give none, state the quantity you assumed so a count that moves is not a surprise.