Bid preparation

How to Write Clear Inclusions and Exclusions in a Contractor Proposal

By Plan to Price Estimating · October 2, 2026 · 7-minute read

A proposal can price one scope and sound like it covers another. When that happens, the customer may expect work you never included in the estimate.

Clear inclusions and exclusions in a contractor proposal help connect the price to the work. Inclusions name the tasks covered. Exclusions identify work outside the price. Assumptions describe the conditions used to prepare it. Allowances provide a stated budget for items that have not been selected.

This guide offers practical proposal-writing guidance, not legal advice. Have your agreement reviewed for the requirements that apply to your location and project.

Keep the internal estimate separate from the proposal

Your internal estimate can show measured quantities, purchasing quantities, labor hours, material costs, subcontract quotes, overhead, and markup. Your customer-facing proposal should show the selling price, the work description, and the limits of that price. Share the internal breakdown when you choose to or when your agreement requires it.

Markup and margin are different. An $8,000 cost with 25% markup produces a $10,000 selling price. The $2,000 difference is 20% of the selling price. That does not necessarily mean 20% net profit: overhead and other expenses may still need to be covered.

Before sending the proposal, check that its scope matches the estimate and that the selling price has been approved. Learn more about Plan to Price’s bid-ready estimates.

Write inclusions by area and trade

“Paint the living room” leaves too much open. Name the room, surfaces, preparation, and finish work. Useful inclusions cover:

• The rooms, areas, and surfaces in the price.
• Preparation, such as light sanding, filling nail holes, and spot priming.
• The number of coats, product line, and color limits.
• Who supplies materials and who moves furniture.
• Protection, cleanup, and disposal.
• Any limits on access, site visits, or working hours used in the estimate.

Identify the drawings, revisions, measurements, photos, and notes used to prepare the price. If measurements came from the contractor or customer, state that clearly and explain which dimensions or conditions still need verification. See measurements-to-proposal for related service information.

Name exclusions customers might overlook

If customers commonly expect an item, do not leave its status to guesswork. For a finish trade, possible exclusions include:

• Drywall replacement, full-wall skim coating, or repairs beyond the listed preparation.
• Repair of water damage, rot, or failed substrate.
• Moving heavy furniture, appliances, or built-ins.
• Hazardous-material testing and abatement.
• Electrical, plumbing, or HVAC changes.
• Trim, doors, or rooms outside the listed scope.
• Changes to approved colors or products after purchasing.

Match each exclusion to the work you priced. “Fill nail holes” should not quietly imply full-wall repair. State whether permits and permit fees are included and who is responsible for arranging them. Handle applicable taxes explicitly rather than using a blanket exclusion that leaves the payable total unclear.

Review the site and project documents as required by your agreement. Resolve conflicts between your proposal and the requested scope before acceptance; an exclusion should not be treated as a substitute for that review.

Separate allowances, assumptions, and alternates

Allowance: a stated amount included in the base price for an item whose final selection or cost remains open. Define what it covers: materials, delivery, taxes, labor, installation, or some combination. Explain how actual costs are documented, how overages and credits are calculated, and whether markup applies to adjustments.

Assumption: a condition used to prepare the estimate, such as sound drywall, eight-foot ceilings, or clear access. If it proves incorrect, document the issue and follow the agreement’s change process. An assumption does not automatically authorize an extra charge.

Alternate: optional work with a separate price. State whether its price adds to or deducts from the base amount, and record whether the customer accepts it.

For a broader pricing review, read 7 Costs Contractors Should Check Before Sending a Bid.

Hypothetical example: interior repaint

This simplified example illustrates the method, not a market rate or recommended quote. Actual coverage depends on the product, surface, color, and application method; use the manufacturer’s information for the selected paint.

The measured scope is 1,080 square feet of walls after openings and 360 square feet of ceilings, with two finish coats. Using an illustrative coverage of 350 square feet per gallon and 10% purchasing extra:

The combined theoretical quantity is 2,880 ÷ 350 = 8.23 gallons. With 10% extra, it is approximately 9.05 gallons. Rounding the wall and ceiling products separately gives ten gallons in this example. Different wall colors may require further rounding by color. Primer is separate from the finish-paint coverage calculation.

The measured areas describe the work. The gallons describe purchasing. Do not inflate the stated room area to reflect purchasing extra.

For this simplified internal cost example, assume ten gallons at $45 ($450), 24 labor hours at an illustrative fully burdened $35 per hour ($840), and $60 for spot primer, tape, plastic, and sundries. The direct-cost subtotal is $1,350. Adding 25% to that subtotal gives $1,687.50, a difference of $337.50, or 20% of the selling price. That difference must cover any overhead and profit not already included. Check all job costs and taxes before adopting a selling price.

Sample customer-facing scope

Base price: $1,687.50 for the scope below in this hypothetical example. Any applicable taxes must be identified in the actual proposal.

Included: Two finish coats on walls and ceilings in the living room, dining room, and hall; filling nail holes and spot priming repaired areas; light sanding; floor protection; moving and protecting furniture that one person can safely handle; one wall color per room and one ceiling color from the specified standard product line; removal of our masking materials and ordinary work debris.

Finish-paint allowance: $450 of the base price covers finish-paint materials. Painting labor is included separately in the base price. For this example, a documented finish-paint cost above or below $450 adjusts the price by the difference plus or minus 25% markup. Agree on the adjustment in writing before purchasing a selection that exceeds the allowance. Changes to preparation, coat count, or labor require a separate scope adjustment.

Excluded: Full-wall skim coating, drywall replacement, crack repair, hazardous-material testing or abatement, moving the piano, painting trim or doors, and coats beyond the two stated finish coats.

Assumptions: Existing surfaces are sound and dry, ceilings are eight feet high, and normal access is available. If damage or another condition changes the required work, document it and obtain written approval for the scope, price, and any schedule adjustment under the agreement’s change procedure before proceeding with that additional work.

The example uses a cost-based allowance with a stated markup rule. Your proposal can use another approach, but it should define the allowance and both overages and credits consistently. The customer sees the price and scope; the labor rate and broader estimate breakdown remain internal unless disclosure is required or agreed.

Checklist before you send the proposal

1. List every room, area, and surface in the price.
2. Define preparation, materials, coats, protection, and cleanup.
3. Name who supplies materials, fixtures, and equipment.
4. Identify the documents and measurements used.
5. Name exclusions customers might otherwise assume are included.
6. Define allowance amounts, coverage, documentation, overages, credits, and markup.
7. Record assumptions and the process for addressing changed conditions.
8. Price alternates separately and record acceptance.
9. Check that quantities and scope agree, and that taxes and permit responsibilities are clear.
10. Remove internal information you do not intend or need to share, then read the proposal from the customer’s perspective.

Ready to organize your next scope? Send the plans or measurements, trades, and any existing exclusions through Plan to Price’s request form to ask for a written service quote.