Getting the Most Out of the Bidding Process, by Corinne Maddox, CCM, CFM
Competitive bidding is the quintessence of America's free enterprise system; however, to get the
best results from construction contractors, some basic points need to be considered:
Prequalification: Except for certain public sector institutions where bidding is open to anyone, no
bidder should be on the bid list who could not be awarded the project. A good bid is costly for
bidders to prepare. Prequalifying reassures bidders that they are seriously being considered, and
they will work harder to improve their bid as a result.
Evaluation Criteria: Look at experience in similar size and type projects, current workload, key
staff qualifications, proposed team and references. Because general construction contractors
must carry job costs, their credit history (or bonding capacity) should be checked. Usually best
results are achieved by using smaller contractors for smaller projects, and larger contractors for
Number of Bidders: Between 3 and 5 bidders is ideal. If contractors are busy, 1-2 more should
be invited, because some bidders may drop out or submit a high number without taking time to do
complete estimates. The larger the bid list, the lower the interest and effort by bidders, since their
chances of winning are lower.
Bid Documents: Provide 1 set of specifications and 2 sets of drawings. One set of drawings is
adequate if reproducible documents are sent to a local printer for their use, or if the set is small
enough to easily reproduce.
Communication: Bidding protocol is that all bidders receive the same communications. It is best
to require all bidder questions to be submitted in writing, and all bidders should be notified in
writing of all questions and responses. Email is great for this purpose. A job site walk through at
the time Bid Documents are issued is very effective in responding to questions and jump starting
the bid process.
Bid Period: Small projects (less than $25,000) should allow at least 10 calendar days. Larger
projects should allow at least 2-3 weeks. To get started, it will take bidders several days to
preview documents, reproduce, sort, package and distribute to subcontractors (subcontractors
must go through this process for their suppliers and subcontractors also), and several days at the
end to receive, evaluate, clarify, negotiate and document subcontractor pricing. If addenda are
issued, this process is repeated, which requires that much more time. Bid periods that are too
tight will result in higher pricing and more misunderstandings and change orders.
Bid Acceptance: Notify bidders of the exact day and time bids are due. Monday bid dates are
not desirable, because suppliers and subcontractors are not open on weekends. Generally, later
in the week and later in the day are best. Requiring sealed bids assures bidders that their bids will
not be "leaked out" to competitors or other improprieties. Generally, faxed bids are considered
acceptable, and make it easy for the last minute subcontractor and supplier quotes (often the
lowest and best) to be included. Since fax machines may be tied up and Houston traffic is
unpredictable, usually bids are accepted if they are received a little after the due time.
Bid Award: It is best not to announce bids upon receipt. Bids must be carefully reviewed to
validate completeness, understand exceptions and comments, and obtain clarifications, if
needed. Often the apparent low bidder is not low after factoring in missing items. Factors other
than bid price should be considered in awarding the bid. The quality of key team members and
the bidders' reputation regarding change orders can significantly affect final project cost. Award
should be made as quickly as possible to make the most of contractor momentum, and all bidders
should be notified of the winner.