Who can forget the scene in the blockbuster movie "Apollo 13" where the imperiled astronauts attempt to replenish defective carbon dioxide filters only to find that the filters in the command module are square and those in the lunar module are round and therefore definitely not interchangeable?  Every engineer or person who deals with engineers smiled uncomfortably at the reference to "low bid" construction.

Why is it we advertise and put the plans out for competitive bids, take the low bid and then sit on nails for the duration of the project hoping our low bidder will come through for us?  Sure, Texas law says we take the lowest qualified bid but unless you carefully prequalify those bidders BEFORE the bid, you could very well end up in a lawsuit for failing to award to the lowest bidder.  In fact, in some jurisdictions, courts have ruled against local government for failing to award contracts to a low bidder currently in litigation with that government!

In the interest of getting the most product for the least money we have become entrapped by the "low bid mentality." Where but in the construction industry is the cheapest price considered the best deal? Consider the disadvantages.

The Low Bidder will usually have one or more of the following characteristics going for them:

• The Low Bidder is likely the bidder with the most errors.
• The Low Bidder likely needs the work.
• The Low Bidder is pressured to cut the most corners 
• The Low Bidder probably will seek out errors and omissions in the plans and specifications

To become the low bidder all one has to do is make a seemingly insignificant addition error, drop a decimal or err in calculating quantities.  He (or she) could have misinterpreted the plans and specifications.  The scope of work could be misunderstood.  Not only that, the low bidder is likely depending on ten to twenty other subcontractor or supplier bids with every chance of being just as faulty as the prime bid. The pressures of obtaining "price cuts" right up to bid time can be incredible and extending and adding forty to fifty unit prices is fertile ground for mistakes.

Will Work for Food

Occasionally, every contractor finds himself with a drooping backlog and no inventory of projects.  With a certain amount of fixed overhead and staff level, he is tempted to cut his profit and overhead fees in an attempt to "buy" the job.  Reminds me of the old story of the contractor who said, "I can't understand why I'm going broke.  I got the last ten projects I bid on!"  Obviously, every one's best interest is served by a contractor who is solvent and has other projects.  Contractors behind the eight ball will sometimes take the proceeds on this latest contract to pay the debts on the last contract which works fine as long as the contractor is successful in getting the next job.  If he fails, bankruptcy may be the only recourse and you could be paying his bills.

Cutting Corners

The successful low bidder will be scrambling as soon as he walks out of the bid letting.  Tremendous temptation is heaped on the contractor to put on the project his cheapest (interpret this as most inexperienced) superintendent, his cheapest job shack and his cheapest backhoe.  The recipe is for disaster.  Assuming he is merely a bad bidder and not an unscrupulous cad, maybe the owner will not have to put four inspectors on the project in an attempt to achieve quality in construction. Expect submittals for substandard fixtures, equipment, and building materials which the contractor will claim are "equal" to that specified.

Confrontation

Expert bidders can find errors and omissions in any set of plans. [This kills me to admit this!] Some bidders will intentionally cut their prices with the knowledge that, if awarded, they will recoup what they "left on the table" with lucrative change orders.  On larger projects, contractors have won million dollar awards from courts and contract arbitrators for incomplete or erroneous plans and specifications. Even when work is cut out of the project, rarely will the owner receive credit for the full value of the deducted work.  Immediately after award, the contractor, the owner and the design team are put on opposite sides of a three cornered table.  Let the lawsuits begin!

Remember all this time, the low bidder's interests are on opposite poles from the owner's.  The bidder selects the subcontractors.  He makes decisions on building materials and suppliers without your input.  His business objective is to make profit as big as possible and he does that by minimizing expenses and time spent on the job. And he largely determines the schedule.  Feeling a little out of control?

With all this going for you, how can you go wrong with the low bidder?