Old boss thought of bids and estimates this way.... As if you were doing it T&M. Your rate, (Covering overhead and profit on labor) which started as soon as you were producing for the job. i.e. picking up material, getting there, doing the work, and even finishing the paperwork for billing. Plus material, and it's mark-up (covering overhead and profit on it).
So his philosophy was this, which later became mine.
Bid=Estimate Estimate synomomous with T&M
T&M = All of your Time + All of the Material = Total billable dollar amount.
The only thing setting a bid apart, was that it was negotiable to a degree.
With T&M, the terms should have been discussed and were negotiated when the contract was signed to do the work. For a comfort level, you could have even added a cap not to exceed.
Really depends on how you've built your rates and mark-up. If you dont bill for sale of the job, travel time that you may be paying someone to do, or billing, then you need to increase your rates to accomadate that loss to yourself. Likewise if you're not billing for time at the supply house, or travel to and from it, you need to raise your mark-up to accomadate that. And those things become part of your overhead. Oh, and permit fees work the same way...
Customers often fear T&M is your Time &
It is.... Even Lawyers, who may even bill time just daydreaming, and they don't have any problem doing so.