Tennessee Estimating & Bidding
In Tennessee a contractor must be licensed to bid, and the bid itself must disclose the license. This chapter covers the profit math, the bid-law disclosure, and the quantity takeoff.
Markup versus margin
Margin is profit as a share of the selling price. For a target margin, divide cost by (1 minus the margin): a $60,000 job at a 25% margin is bid at $60,000 / 0.75 = $80,000. Multiplying cost by 1.25 gives $75,000, which is only a 20% margin - the recurring markup-versus-margin trap.
The bid-law disclosure
Because a contractor must be licensed before bidding, Tennessee's bid law (T.C.A. §62-6-119) requires a bid on work requiring a license to disclose the contractor's license number, the classification allowing the work, and the license expiration date. For many public bids this information goes on the outside of the bid envelope, and a bid that omits it can be rejected.
The quantity takeoff
A quantity takeoff measures and counts the work quantities from the plans so they can be priced. For concrete, convert thickness to feet and divide by 27 to get cubic yards: a 20 ft by 30 ft slab at 6 inches thick is (20 x 30 x 0.5) / 27 = about 11.1 cubic yards. Accurate takeoffs keep the bid from running short.
State-specific details
State exam facts
- State regulator
- Tennessee Board for Licensing Contractors (TBLC), Department of Commerce and Insurance
- Passing score
- 73%
- Scored questions
- 50
- Time limit
- 140 minutes
Does Tennessee require a state contractor license?
Yes. The Tennessee Board for Licensing Contractors (TBLC) licenses contractors under T.C.A. Title 62, Chapter 6. A license is required before bidding at $25,000 or more for general building work, $3,000 for masonry, and any dollar amount for electrical/plumbing/mechanical.
What is on the Tennessee Business and Law exam?
The Business and Law exam is 50 questions, 140 minutes, and requires 73% to pass. The monetary limit is the lesser of ten times net worth or ten times working capital; a reviewed or audited CPA financial statement is required for a limit above $1,500,000.
What are Tennessee's bid-law and lien rules?
Bidders must disclose license information under §62-6-119. Tennessee lien law (T.C.A. §66-11) gives the prime contractor a one-year enforcement period, and there is a 5% retainage-escrow rule (§66-34-104). Tennessee has no state income tax on wages.
Sources: https://www.tn.gov/commerce/regboards/contractor.html