The Price Isn’t Right: How to Spot Red Flags in a Proposal

When you manage dozens — or even hundreds of locations — every repair proposal is a test of your vigilance. You know when a price looks high, but it’s not always clear why. But understanding each line item isn’t about intuition, it’s about having the right people in your corner. That’s where ServiceChannel’s Trade ​​Specialist team comes in. 

Each day, they review hundreds of proposals across every trade, ensuring that clients never pay more than they should. Their collective experience, spanning decades across HVAC, electrical, plumbing, refrigeration, and general construction, means they’ve seen just about everything. Within seconds, they can tell whether a proposal warrants a closer look.  

Below are the biggest, most common red flags that the team looks for, plus a simple checklist that can help you review your own provider proposals. 

1. Inflated parts markups 

Parts markups are one of the most common ways proposal estimates can get out of hand. “I might see a $700 compressor listed at $1,200,” says Allen Carpenter, a ServiceChannel trade specialist with more than 20 years of engineering experience. “That’s an immediate red flag.”  

Allen also sees some proposals that include flat-rate pricing. “They might try to shove paint, primer, sandpaper, drop cloths, and the rest of their materials onto one line,” he says. That’s a quick way to have a proposal rejected, because ServiceChannel requires that any item that exceeds $50 must have its own line. 

What to look for: 

• Supplies grouped together instead of listed separately  
• Big price jumps compared to similar jobs you’ve seen before 
• Parts shown with simple, rounded prices instead of actual costs (for example, $500 vs. $487.50)

2. Excessive labor estimates 

Labor inflation is another common way to overestimate the cost of a project. Sometimes, providers overcharge by claiming a job will take longer than it really does. Other times, they might say more workers are needed than the job actually requires.  

Michael Stone, a trade specialist with more than 12 years of electrical experience, uses his knowledge to quickly spot inflated labor hours. “This is an extreme example, but I recently reviewed a proposal that quoted 12 hours to change six lightbulbs.” 

What to look for: 

• Flat-rate labor charges with no time breakdown 
• Crew counts that exceed what’s needed 
• Hour estimates that seem excessive  

Reviewing labor estimates is part art and part science because it takes more than math to get it right. The team combines years of field data with practical know-how, approving only what’s truly fair. 

3. Scope creep 

Another red flag is when you see work on a proposal that wasn’t in the original request. 

Rick Verow, a third-generation sheet metal worker with more than 30 years of HVAC, plumbing, and mechanical experience, says this is common with preventative maintenance (PM) projects. “A provider might submit a proposal for a PM project and assume that one or more parts will need to be replaced,” he says. “That’s fine if the service tech finds legitimate things that need replacing, but we want to be sure that they are only replacing parts that require it.” 

What to look for: 

• Added tasks that weren’t part of the original scope 
• Duplicate line items  
• Seasonal rate hikes or “rush” fees not tied to emergencies 

Before signing off on any proposal, make sure all work matches what was agreed to. Ask the provider to show prices for any extra work or subcontractor work on separate lines, so you can clearly see what each item costs. If there are seasonal price increases or additional charges for materials, ask for a written explanation to be sure those costs are fair. 

4.​ Strong documentation speaks volumes​ 

A clear, detailed proposal makes life easier for facility managers, and it also ​​helps providers move projects forward faster. The more context and evidence a provider includes up front, the fewer questions and follow-ups they’ll get later. Strong documentation signals professionalism, builds trust, and can even speed up approvals because the Trade Specialist team has what it needs to validate the scope and costs right away.  

​​​​​Michael Stone has this advice for providers: “Include all your equipment details — manufacturer, make, and model numbers — and be thorough in describing what you found during troubleshooting. The more detail you provide about what you plan to do on-site, the faster and easier it is for everyone to approve and complete the work.” 

For facilities managers, missing details are a clear red flag. When information is incomplete, it’s harder to verify that a proposal is priced fairly or that the work aligns with the original issue. 

What to look for: 

• Missing photos, measurements, or descriptions 
• Unclear problem statements 
• Bundled parts and labor that obscure true costs 

The more documentation a provider includes, the more confident you can be that the price is accurate and truly reflects the actual work being done. 

​​​​​Checklist: Review like a pro 

A clear proposal is a winning proposal 

When project proposals lead to more questions than answers, facilities managers spend more time reviewing and less time focusing on operations. That’s ​​​​why trade specialists can deliver real savings. Having experienced, unbiased reviewers in your corner means you can feel confident you’re not overpaying for any proposal, no matter how complex.