Bid shopping or not?
Bid shopping or not?
(OP)
Hi all,
I am a recent grad, been working for a general contractor for less than a year. I was currently soliciting subcontractor bids for a job, and one hour before job closing one of the subs (whom I have a good relationship with) called and asked me how their bid is looking. He was a close second. Usually I'd say that he's within 20% and that's it. But because of our relationship, I said that his bid is very competitive with Company X (I named the company without disclosing its price - here is where my dilemma comes from). We ended our conversation there. Shortly after, he calls and lowers his price.
Chris Plue, VP of Webcore Concrete, defines bid shopping as “letting one bidder know where their price stands in relation to the competition and letting
that bidder adjust their pricing accordingly". Others say "you're only bid shopping if you disclose one subcontractor price to another"
Was I guilty of bid shopping or not?
I am a recent grad, been working for a general contractor for less than a year. I was currently soliciting subcontractor bids for a job, and one hour before job closing one of the subs (whom I have a good relationship with) called and asked me how their bid is looking. He was a close second. Usually I'd say that he's within 20% and that's it. But because of our relationship, I said that his bid is very competitive with Company X (I named the company without disclosing its price - here is where my dilemma comes from). We ended our conversation there. Shortly after, he calls and lowers his price.
Chris Plue, VP of Webcore Concrete, defines bid shopping as “letting one bidder know where their price stands in relation to the competition and letting
that bidder adjust their pricing accordingly". Others say "you're only bid shopping if you disclose one subcontractor price to another"
Was I guilty of bid shopping or not?





RE: Bid shopping or not?
Dave
Thaidavid
RE: Bid shopping or not?
If someone asks about bids I tell them "Sorry, but its our policy not to talk about bids prior to the tender closing and my boss is a real stickler for that." and leave it at that. Blame it on your boss to preserve the relationship. If they continue to ask about bids prior to close then they are fishing for feedback on their price, which is definitely a problem if you don't shut it down right away.
I don't know what your policy is, but everyone's bids are publicly available afterwards and they can see how well they did and adjust their bids on the next project accordingly. Not before.
RE: Bid shopping or not?
Edit: These discussions also covered Owners and Engineers, as appropriate.
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RE: Bid shopping or not?
Question for all, what do you consider to be appropriate post-bid feedback for unsuccessful bidders?
Question for SlideRuleEra, does it take many instances of this behavior for the negative consequences you talked about to start taking place? This is the first time I was put in this position.
RE: Bid shopping or not?
Concerning post-bid feedback. We would get very competitive pricing on major bridge components, such as rebar, structural steel, concrete piling & girders, etc. The most I would tell a supplier (successful or unsuccessful) was a truthful " you were completive" or "your bid was not competitive". At the time (1970's) this was accepted as an ethical response by these bidders. They never asked for additional info, yet continued to provide cutthroat pricing on future jobs.
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RE: Bid shopping or not?
RE: Bid shopping or not?
TTFN
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RE: Bid shopping or not?
By this definition, you have not been bid shopping.
This is something that is less likely to occur once you have developed a relationship with the suppliers that you are using.
http://constructionadvisortoday.com/2012/05/can-an...
RE: Bid shopping or not?
I'da just told him his bid was "very competitive," and then I'd select among the suppliers based on the one I trusted the most, him included, based on factors other than price.
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RE: Bid shopping or not?
All you should say is "We are not required to pick the lowest bid - other factors may apply". But never suggest to someone that they had the lowest bid (or even use "competitive") and that they lost to someone else for other reasons UNLESS you're prepared to explain those reasons in detail and be quizzed on them by their lawyer.
RE: Bid shopping or not?
RE: Bid shopping or not?
TTFN
I can do absolutely anything. I'm an expert!
homework forum: //www.engineering.com/AskForum/aff/32.aspx
FAQ731-376: Eng-Tips.com Forum Policies forum1529: Translation Assistance for Engineers
RE: Bid shopping or not?
TTFN
I can do absolutely anything. I'm an expert!
homework forum: //www.engineering.com/AskForum/aff/32.aspx
FAQ731-376: Eng-Tips.com Forum Policies forum1529: Translation Assistance for Engineers
RE: Bid shopping or not?
RE: Bid shopping or not?
RE: Bid shopping or not?
I agree with Bimr, price shopping is when the General has been awarded the bid and then begins pitting subs against each other to lower his costs, but maintain the same price for the bid. That is why many owners require a list of subcontractors as part of the bidding process.
RE: Bid shopping or not?
Certainly true, but that doesn't matter based on the situation at hand. The fact is that bids were in and someone asked for feedback on their bid amount prior to closing and then sent in a lower bid. This is bad news any way you look at it, whether you call it bid shopping or not.
As a general contractor it is 100% within your right to pick one company over another based on non-monetary reasons. But, if you give people feedback on their bid prior to closing, in the long run you will get a reputation for not dealing fairly with others and be worse off for it.
RE: Bid shopping or not?
RE: Bid shopping or not?
this kind of stuff is what makes bid day crazy.
RE: Bid shopping or not?
The biggest problem people can get into is to start looking at the bids before the bid deadline closes. It's too easy to let something slip about the bids (e.g., boy, your cost for Item X seems a bit high) which may result in a bid getting changed.
Finally, most companies subcontract the work in the bids and there's a finite number of GC's around. Therefore, it should be expected that the bids are fairly close. Depending on your procedure for reviewing bids, does the low bid always get the job? If so, what if the cost differences between the bids is not statistically significant? Money shouldn't be the only factor when selecting the company that get's the project, but it is an important one.
RE: Bid shopping or not?
Overall, though, I wouldn't make it a habit of trotting out competitor's bids to each other since its tacky and would lead to a reputation as a manipulator. But if I had a personal relationship with a individual at a vendor and I wanted my company to select his company, I might tip him off. This is assuming a situation where I couldn't influence my company's selection process.
I'm not sure I understand the liability discussion. I'm within my rights to select whoever I want to do work for me, for what ever reason (barring discrimination). I can select Joe Shmo because I like his red shirt, regardless of his bid price. Now, if its a publicly funded job, then its different. Then you must be selected based on qualifications before the parties exchange fee information - if you are offering professional services.
RE: Bid shopping or not?
I think it is appropriate and right to get multiple quotes, and use them to look for a good price and a good consultant/contractor. But in a formal tendering process, it is not right to discuss bid details with bidders while submissions are still open to change.