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How to Bid a Commercial Rekey Contract (40-Door Bid Walkthrough)

Updated 2026-05-27. Locksmith School Blog editorial team.

The Reality of Commercial Bidding

Bidding commercial work differs significantly from residential service calls. In a residential scenario, you are often selling a solution to an immediate problem—a lockout or a broken key. In a commercial rekey contract, you are selling security compliance, asset management, and business continuity. The property manager or facility director is not just looking for the lowest price; they are looking for the lowest risk. If you underbid the job, you eat into your margins and potentially rush the work, leading to call-backs. If you overbid, you lose the contract to a competitor who understood the scope better.

To bid accurately, you must move beyond guessing and move toward line-item accounting. This walkthrough demonstrates how to approach a 40-door office rekey contract, calculating real numbers for labor, materials, and overhead. We will use a standard small office park scenario to illustrate the math. According to the Bureau of Labor Statistics, the median hourly wage for locksmiths is approximately $24.00 as of 2023, but your billing rate must account for overhead, travel, and liability (BLS, 2024). Let's break down how to turn that statistic into a profitable bid.

Phase 1: The Pre-Bid Site Survey

Never bid a commercial rekey contract based on a phone description. "We have 40 doors that need rekeying" is rarely the full story. You need to walk the site to identify the variables that will destroy your profit margin if missed.

Identify the Hardware

During the walkthrough, you must catalog the specific locksets. Are they standard cylindrical locks (like a Schlage C or K series), mortise locks, or interchangeable core (IC) housings? Rekeying a Best Access Systems IC core takes significantly less time than disassembling a mortise cylinder to change pins. If the facility uses high-security cylinders like Medeco or Mul-T-Lock, your material costs and labor time will increase. For this walkthrough, we assume a standard commercial grade environment using Schlage L-Series and F-Series cylindrical locks.

Check Keyways and Compatibility

Verify if all locks are currently on the same keyway. Mixing keyways (e.g., a Schlage C keyway and a Kwikset KW1 keyway in the same building) means you cannot provide a single master key without replacing cylinders. If the client wants a master key system, you must verify that the existing cylinders can be pinned to accept a master pin, or if you need to quote full cylinder replacements.

Assess Door Conditions

Look for sticky latches, misaligned strikes, or frozen tailpieces. A rekey is the perfect time to lubricate and adjust the hardware. However, if a door closer is dragging and preventing the latch from extending, that is a billable repair, not a freebie included in the rekey price. Note these items on your survey sheet as "upsell repairs" to keep your base bid competitive.

Phase 2: Calculating Your Labor Rates

Labor is often where locksmiths lose money. You cannot charge the customer only the time you spend at the facility. You must account for shop time, administrative time, and travel.

Field Time vs. Shop Time

For a 40-door rekey, an experienced technician can typically rekey a standard cylindrical lock in 10 to 15 minutes, including removing the cylinder, decoding, repinning, and reinstalling. At 15 minutes per door, that is 10 hours of pure field time.

However, you also have shop time. You need to generate the master key system (if requested), cut the keys, and organize the pins. For a 40-door job, budget for 1 to 2 hours of shop prep.

Establishing Your Hourly Rate

Do not bill your personal hourly wage; bill your "shop rate." This rate covers your vehicle payment, insurance, fuel, tool depreciation, and profit. While the BLS tracks wages, successful trade businesses typically bill out at 3x to 4x the technician's hourly wage to cover overhead. If your tech costs you $30/hr (fully burdened), your shop rate should likely be between $90 and $120 per hour. For this bid, we will use a conservative commercial service rate of $110.00 per hour.

Labor Calculation: 11.5 hours x $110.00 = $1,265.00

Phase 3: The 40-Door Case Study Breakdown

Let’s assemble the actual bid. You have walked the site. You found 38 standard cylindrical locks and 2 heavy-duty mortise locks. The client wants two keys per door and one master key for the property manager. They want to maintain the existing keyway (Schlage C), so no cylinder replacements are required—only pins.

Line Item 1: Materials

You need to calculate the cost of pins, key blanks, and any incidental hardware (like new tailpiece clips or cam caps if the old ones are rusted).

Pricing Materials: Do not just pass the cost through. You must mark up materials to cover the time it took to buy them and store them. A standard markup in the trades is 100% to 300%. We will apply a 200% markup.

Materials Subtotal: $49.58 x 3 = $148.74 (Round to $149.00)

Line Item 2: Labor

We calculated the labor previously based on 11.5 hours of work at a $110.00 shop rate.

Labor Subtotal: $1,265.00

Line Item 3: Trip Charge / Service Fee

Commercial bids often include a trip charge to cover the first hour of dispatch or administrative overhead. This separates the cost of "showing up" from the cost of "performing work."

Service Fee: $85.00

Line Item 4: The Master Key System

Designing a master key system (pinning charts) requires technical expertise. Even if you are rekeying to an existing system, the verification process to ensure keys work smoothly is billable. This is often included in the labor, but for clarity in a bid, it is worth listing if the system is complex. For this standard bid, we will keep it within the labor hours but note it in the scope of work.

Phase 4: The Final Bid and Margin Analysis

Now, sum the totals.

Net Bid Total: $1,499.00

Analyzing the Profit

Is $1,499.00 a good bid for 40 doors? That breaks down to roughly $37.47 per door. This is a competitive, market-rate bid for a standard commercial rekey in many metropolitan areas. However, you must subtract your hard costs to see your actual gross profit.

This margin is healthy. It leaves room for overhead (marketing, insurance, rent) and net profit. If you had bid this at $800.00 to "beat the competition," your margin would evaporate, and you would likely lose money after paying for fuel and taxes. To ensure you stay on top of these numbers, integrate your job costing into a routine like our Locksmith Bookkeeping Monthly Checklist (90-Minute Routine).

The Three Questions to Ask Before Pricing

Before you hand over that $1,499.00 bid, you must ask the client three specific questions. These questions protect you from scope creep and liability.

  1. Who holds the current key codes?

    If the previous locksmith retained control of the key codes (common with proprietary systems like Medeco or Mul-T-Lock), you cannot rekey these locks without the authorization codes. If the client does not have them, you must quote a full cylinder replacement, not a rekey. This changes the bid from $1,500 to potentially $4,000+.

  2. Do you require a key control agreement?

    Commercial clients often want "Key Control," meaning keys cannot be duplicated without authorization. If you are using patented keys, this is built-in. If you are using standard brass keys, you must explain that anyone at Home Depot can copy them. If they want true key control, you must upgrade the cylinders to a restricted or patent-protected keyway.

  3. Are there any "Do Not Duplicate" stamps required by law or insurance?

    Some states and insurance carriers require specific stamping on keys. Furthermore, "Do Not Duplicate" is essentially a polite request in many states, whereas "Unlawful to Duplicate" carries legal weight. Ensure you are compliant with local regulations regarding key stamping. Licensing rules vary significantly by state; for example, California requires specific licensing for locksmiths performing rekey work, which dictates how records must be kept (California Bureau of Security and Investigative Services, bsis.ca.gov).

Liability and Insurance Considerations

When you hand over 81 new keys to a property manager, you are handing over access to their entire business. If an employee is fired next week and the client realizes you gave them keys that fit the manager's office due to a pinning error, you are liable.

Your general liability policy should cover bodily injury and property damage, but you may need specific coverage for "Professional Liability" or "Errors and Omissions" regarding the security work itself. A standard GL policy might not cover the cost of re-rekeying the building if you make a mistake. Review your policy limits before taking on large contracts. For a detailed breakdown of what coverage you actually need versus what is often sold to you, refer to our guide on Locksmith Insurance: What You Actually Need (and What You Don't).

Presenting the Bid

Present the bid as a formal document, not a text message. Use a professional header with your company name, license number (if applicable in your state), and contact information. List the scope of work clearly:

Include an expiration date on the bid (usually 30 days) to create urgency. If the client asks for a discount, do not lower your labor rate. Instead, offer to reduce the number of keys provided or remove the service fee. Protect your shop rate at all costs; that is the value of your time.

Conclusion

Bidding a commercial rekey contract is a test of your business acumen as much as your technical skill. By accurately calculating your labor hours, marking up your materials appropriately, and vetting the client's needs during the site survey, you protect your profit margins and ensure a smooth job. The $1,499.00 figure in our example is not a random number; it is the result of a calculated formula covering your costs, your time, and your risk.

Mastering the art of the bid allows you to scale from a one-truck operation to a multi-van commercial service provider. If you want to dive deeper into the business strategies that separate the pros from the hobbyists, including advanced sales scripts and operational efficiency, the $79.99/mo Locksmith School Blog Pro Course offers the curriculum you need to grow. To get started with our free foundational resources, start the Locksmith School Blog free signup today.