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Know When to Bid, When to Pass

That sealed envelope may hold your ticket to a fat new job--or it may be an exercise in futility.

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This story appears in the December 2008 issue of Entrepreneur. Subscribe »

For contractors who earn most or even part of their revenue through bidding, there are some secrets to being more effective.

1. Give a range. George Monzures, 38, owner and founder of Scottsdale, , general contracting firm Monzures Development, says the market downturn has made customers more price-conscious than ever. He prefers working with a modified guaranteed maximum price, or GMP, bid because it gives a range of for many line items. "It has a safety level for the owner and the contractor, especially if there are some parts of the job that still need to be decided on," he explains. "If the owner isn't sure what type of granite will be used, you could have a $50,000 to $60,000 differential."

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