What this calculator is for
This is a conceptual bid — the number you produce for a go/no-go conversation, a budget letter to an owner, or a sanity check against a takeoff that already exists. It stacks four layers on a base cost per square foot: direct cost, overhead, contingency, and profit. It is not a substitute for a quantity takeoff, and it does not price a specific set of drawings.
How each input moves the number
Project type and quality level together select a cost range. Nine building types each carry three ranges. Commercial office at standard quality runs $350 to $500 per square foot; a warehouse at standard runs $120 to $180; a data center at standard runs $1,200 to $1,800. The calculator uses the midpoint of whichever range you land on, so the standard office midpoint is $425 per square foot. The spread itself is discarded, which is worth remembering when you are pricing a project that clearly sits at one end of its band.
Stateapplies a multiplier to that midpoint. The multipliers are derived from BLS QCEW average construction wages rather than a generic regional index, computed as the material share plus 0.35 × (state wage ÷ national average wage). Texas lands at 1.014. Because only the labor share is indexed, the spread between the cheapest and most expensive states is narrower than headline wage differences suggest.
Overhead, contingency, and profit are the three percentage fields. Overhead and contingency are each calculated on direct cost, not on one another. Profit is calculated on the subtotal, which already includes both. The fields cap at 30% overhead, 20% contingency, and 50% profit, and square footage has a floor of 100.
The order of operations
Direct cost = adjusted cost per square foot × square footage. Overhead = direct cost × overhead rate. Contingency = direct cost × contingency rate. Subtotal = direct + overhead + contingency. Profit = subtotal × profit rate. Recommended bid = subtotal + profit. The markup multiplier reported next to the headline number is simply bid ÷ direct cost.
Worked example, using the defaults
Commercial office, standard quality, Texas, 10,000 SF, 12% overhead, 5% contingency, 8% profit. The $425 midpoint × 1.014 gives $430.95 per square foot, so direct cost is $4,309,500. Overhead adds $517,140 and contingency adds $215,475, for a subtotal of $5,042,115. Profit at 8% of that subtotal is $403,369, producing a recommended bid of $5,445,484 — displayed as $5.45M, $545 per square foot, at a 1.26× markup over direct cost.
Two mistakes that cost real money
The first is reading the profit field as a margin. Set 8% and you keep 7.4% of revenue, because markup and margin are different measurements of the same dollars. If you are targeting a specific net margin, run the conversion in the markup and margin calculator and set the profit field to the markup that produces it.
The second is treating contingency as profit. Contingency here is 5% of direct cost sitting inside the subtotal, and profit is then charged on top of it. That is the correct sequence, but it means spending your contingency does not just eat the allowance — it also eats the profit you charged on that allowance.
Limits worth knowing
The base ranges are national averages adjusted only for state construction wages. Nothing here accounts for site conditions, phasing, escalation over a long schedule, bonding, prevailing-wage requirements, or how hungry your competition is this quarter. For a scope-driven number, move to the cost estimator, and check current material movement on the materials price page before you commit to a bid that will be bought out months from now.
Frequently Asked Questions
Does an 8% profit setting mean 8% of the bid price is profit?
No. The profit percentage is applied to the subtotal, which already contains overhead and contingency, and the result is then added on top. At the defaults that produces $403,369 of profit inside a $5,445,484 bid, which is 7.4% of the bid price rather than 8%. The number you set is a markup on cost; the share of revenue you keep is always slightly lower.
Where do the state multipliers come from?
They are built from BLS QCEW average hourly wages for private construction (NAICS 23), not from a general cost-of-living index. Each multiplier equals the material share plus 0.35 times the ratio of the state wage to the national average wage, so only the labor portion of the cost moves with the local wage. Texas comes out at 1.014. Lower-wage states fall below 1.00 and high-wage states rise above it.
Why does the calculator warn me below 5% and above 20% profit?
Those two thresholds trigger banner warnings. Under 5%, the message asks you to verify your cost estimates are complete, because at that spread a single missed scope item can erase the entire profit. Over 20%, the message flags competitiveness. Neither is a hard stop and the field accepts anything from 0 to 50%.
Can I submit this number as a hard bid?
Not as it stands. The calculator prices from a square-foot midpoint, so it has no knowledge of your actual takeoff quantities, site conditions, subcontractor quotes, schedule duration, or bond and insurance requirements. Use it to set a target and to test whether a real takeoff is landing in a sane range, then bid from the takeoff.