Predatory Bidding in Multi-Million Dollar Commercial Building Contracts.
While hard bids may seem attractive to building owners and architects looking to save money, the process often has negative consequences in multi-million dollar commercial building contracts. Most contractors submit predatory bids that are significantly lower than the true estimated cost of the project. This predatory practice is sometimes called “low ball” bidding.
Predatory contractors intentionally submit bids that are much lower than what the project is likely to cost, with the intention of making up the difference later through change orders. These change orders are usually presented as additional expenses for unforeseen circumstances or mistakes in the original plans. This practice of predatory “low ball” bidding can also lead to shoddy workmanship, as contractors may cut corners to make up for the low bid price.
Predatory bids create a lack of trust between the building owner, architect, and contractor. Building owners may feel that they have been misled, and architects may feel that their plans were not properly evaluated. Furthermore, predatory bidding can also lead to cost overruns, as contractors may underestimate the amount of work required for a project, or include only the bare minimum in their bid.
There are several alternatives to hard bids that building owners and architects should consider, including design-build and negotiated bidding.
In design-build, the contractor is responsible for both the design and construction of the project, which can lead to a more streamlined process and fewer change orders. Negotiated bidding is another option, where the building owner and contractor work together to determine a fair price for the project.
In conclusion, predatory “low ball” bidding is a common practice in the construction industry that can lead to negative consequences in multi-million dollar commercial building contracts.
Building owners and architects should consider alternatives such as design-build and negotiated bidding to ensure a fair and transparent bidding process. By avoiding predatory low ball bidding, building owners can reduce the risk of cost overruns, shoddy workmanship, and a lack of trust in the construction process.
EPI Construction has a long and proud history of delivering exceptional construction services to clients across various industries. Our team of experts has extensive experience in design-build and assist projects, which allows us to bring a unique perspective to every project we undertake. However, we understand that some clients may still need a hard bid. At EPI Construction, we believe that a hard bid should never be an excuse for a contractor to hide potential problems or increase the budget later with change orders. That’s why we promise to provide a fair and honest bid every time, including pointing out any potential issues or areas for improvement in the plans up front. When you choose EPI Construction, you can expect a collaborative and transparent approach to every project we undertake.
