Fixed Bid vs. NTE

When it comes to the cost of your maintenance or construction project, there are a few ways you can structure the bill. Simple service calls can be charged at an hourly rate, but longer projects require a more detailed contract.

Fixed Bid

This type of setup can be beneficial to both parties. By setting a fixed price  say it’s $5000 — the client can feel secure knowing the final price. The workers may also have an advantage, because if they can get the job done faster or cheaper than promised, they still get to collect the agreed upon amount. This is the best structure if the cost of materials and services are established and there won’t be too many surprises.

Fixed Bids are best for:

  • Small projects
  • Projects with known costs

NTE: Not To Exceed

The NTE structure can be a little risky, but it makes sense when prices are up in the air. This type of bid is based on Time and Materials, or “T&M.” Setting a “Not To Exceed” price may sound similar to a Fixed Bid, but differs in one key way. A Fixed Bid will end up being the agreed upon cost no matter what, whereas an NTE could end up costing the customer less. NTEs are used when flexibility is needed, because they allow the time needed or material costs to shift. It is, however, fairly risky to the contractor. If the cost of materials is vague, the project could end up costing the contractor more than they expected. 

NTEs are best for:

  • Large projects
  • Projects with unknown costs
  • Job scopes that could change


Contractors like DI Repairs will always help the customer determine the best course of action for their project. Contact DI to start discussing your next project today.