Bid shopping or not? 7

[maskalawia]

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?

 

[zelgar]

Take this hypothetical situation. You have a project out for bid with 5 conditions. During the bid process, you get quotes from Companies A and B. Meanwhile, Company C ask questions about the bid that leads you to give clarification to some of the bid conditions. At that point in time, you need to contact Companies A and B to let them know about the changes/clarifications about the bid conditions to let them consider their bids (You may need to give them additional time to re-evaluate their bid). Finally, after all bids have been received AND the bid deadline has expired you should evaluate the bids from all of the submittals.

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.

 

[Terratek]

I had a job not too long ago where I proposed to do a small job for about $3900. The client (with whom I had no relationship) came back later and said Brand X can do it for $3765.50. If you can match it, we'll go with you. I chuckled a little at the precision of the proposed amount from the other company and agreed to do the job for $3765.50. I appreciated the opportunity to win the job since I try hard not to leave money on the table and am rarely low bidder. Although this doesn't happen often, I've also had other instances where someone said Brand X can do it for $1200 and I told them they better get Brand X to do it. If I find out that I'm loosing to low bidders multiple times, then I'll stop being competitive at all so they stop wasting my time asking for proposals. A lot of times someone who went low bidder comes back later to have some things fixed that the low bidder messed up.

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.

 

[allgoodnamestaken]

I think there is a difference between a bid, which I think of a formal submission on a tender, vs people giving quotes for a job that is not a formal tender.

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.