Construction projects usually receive numerous bids and while many will be within a few dollars of each other, there will also be ones that are really high and really low. Many companies may think that the lowest bid is the best one, but there are many times when that low bid isn’t really the best offer on the table.
There are a few things that can cause a bid to be higher than a company plans on. Sometimes a construction company will change an item that has been requested because they do not think that it will meet the current safety or building codes. That change can cause a bid to be thousands of dollars higher than necessary. A construction company that makes this change on their own is usually looking out for their client as they do not want to necessitate a change in the cost as the project is being worked on.
A construction company that has the lowest bid may not have even thought of those issues and that puts into question the rest of the materials that they used for the quote in the bid. Low bidders will sometimes substitute lower quality materials that may meet the basic standards required and therefore lowers the cost for them in the long run. However, the cost for the business is higher than it should be for the materials that are being used.
Mathematical errors can also cause a construction company to bid higher on a project than other bidders. A simple miscalculation of the amount of material that is needed can cause a higher bid. Any time a single line item is way higher on one bid and not the other, a simple phone call should be made to clarify if there had been an error on the bidder’s end.
The time of the year also comes into play when a company is receiving bids. There are certain times of the year that are busier than others. A construction company will not want to miss out on bidding a project, yet they may not have time to actually do the project. Therefore, they will throw a number out for the bid to keep their name out there. This bid may be higher than all of the rest when it would have been much lower if it was asked for at another time of the year. Anytime this happens, a company should think about whether they want to wait to begin their projects so that they can receive accurate bids from everyone.
Every time a company receives bids, they should look at each line of every bid carefully. If any line items come in significantly higher or lower than the rest, the company should make a phone call to see if the calculations were done correctly. An error could turn a high bid into a more reasonable one. Our construction project managers can help analyze the bids you receive for all construction projects regardless of scope. Give us a call at 407-316-8544 to discuss hiring us to manage your construction project.