Why Is Job Bidding Done In Secert?

Treasurehoard

Why is the bidding for a job done in secret?

Glasshousebltr

For the same reason your boss at Burger World told you to keep your pay to yourself.

Bob

Treasurehoard

Yes ok it was funny the first couple of times you were being a dumb ass but really do you know anything about this industry? I mean I am seriously looking for information here. Would someone please confirm that this is a forum finding out information?

Glasshousebltr

Bidding is done in secret to:
1. Keep the K-mart shoppers from turning the process into an auction
2. Keep a professional atmosphere among bidding contractors.
3. It's really no one else's business, except maybe the IRS.

Bob

hatchet

In addition and expanding on point 2 of Glass's... to keep the bidding contractors from bid shopping. But honestly - it's not secret just a set date and time for final entries. After that's it's public knowledge. On most of our large commercial jobs we get a final bid list and what their bids were.

__________________
Rich
WIT Construction Co.
Superior MT Contractor

Treasurehoard

ok so I can understand why they would do it in secret to make the bidding prices lower. Wouldn't they go even lower if they all knew the prices everyone else was giving and they did multiple bids against each other (of course the lowest bid would still win in this case)?


For Example company 1 bids 90,000, company 2 bids 89,000, company 3 bids 85,000 so company 1 bids 84,000 and company 3 can still go a little lower and wins the job with 82,000? If they are only allowed to place 1 bid each then company 3 would have won with 85,000 but instead company 3 won with 82,000.

mikesewell

No, company 3 might been able to do the job for $79,000, but saw that he could win the job at $83,999.
-Mike

Treasurehoard

Good point ... ok so say there is a margin on the bid ... such as if company 3 wanted to bid again to win they had to place a bid a minimum of $2000 less then the last bid. That way no one can just bid $1 less and win because that would really suck. So that would force company 3 to bid 82,000 if they wanted to win or else they couldn't bid.

mikesewell

By using plans and specifications.

Treasurehoard

Well that is true but in either situation whether the bid was secret or not the company would have to do an estimation of what the job would cost them. The estimate would have to include Estimated Direct Costs + Markup for Overhead + Markup for Profit which would equal the bid price. In either case a company with the lowest estimate would win the job. Maybe it is just the fact that one company has a huge overhead cost and the other doesn't and so they can offer a much lower price. When they place a bid on a job it doesn't matter how they come to that conclusion (as long as they have included everything they need to get the job done right)

Treasurehoard

Right that is what the industry already does make estimates. It would done the same way that is currently. A plan would be given to the different people interested in bidding then they would go about figuring out how much they can bid. The only thing that would be different is the way that it is bid on.

TimWieneke

"Why is the bidding for a job done in secret?"

For private projects the answer is simple - Construction isn't about the cost of a project, but the value of the project. You could have 2 additions built off the same architectural plans. One is built by a team of professionals with decades of industry experience. The second is built by a crew of hacks. Should both cost the same? Heck no. How much more should the first one cost? Depends - what's it worth to the customer? How much it's worth is an indicator of the customer's PRIVATE financial status - hence secret bidding.

In dealing with public projects (and some private as well), check on the legality (or illegality) of collusion between contractors working on a project.

Tim

__________________
As Steve the Foreman would say, "Forgive him Lord, for he doesn't know what he's doing."

Glasshousebltr

Private bidding is supposed to help control kickbacks, but it some cases it gives an inside fella a head start..........Kinda sucks when your not that fella.

Bob

Treasurehoard

couldn't someone just as easily pay a kickback to someone doing a private auction? I mean that is pretty much a bribe to get the job. Either way if the person in control of the auction is unethical they will accept a bribe and just lie about who won ... cause what is going to stop them from doing that if they are already crooked.

PipeGuy

Does anyone really think that the author of this kind of stuff merits more thoughtful consideration? Think of me what you will...I certainly don't.

__________________
Fortunately I keep my feathers numbered for...for just such an emergency. -Foghorn Leghorn

Hammertime

Lowest bid doesn't always neccesarily get the job.

hatchet

Very true Hammertime - should be defined as the lowest "qualified" bidder.

__________________
Rich
WIT Construction Co.
Superior MT Contractor

Glasshousebltr

I think he was just fireing back the only way he new how Pipe, if he sticks around here long, I'm sure we'll teach him to be sarcasticly arrogant.

Bob

Treasurehoard

Why Don't you just give up on it already. If your not interested in giving any help then thats fine. I have been to lots of different types of forums. Most of the time the adults forums like this one actually have people who try to act like adults. The forums that are full of teenage kids are the ones that I would expect to act like this. If you just want to cause trouble maybe you should go hang out with them. I am not interested in getting into another flaming contest with you. Sure it is funny but it is a waste of all of our time which could be put to better use doing something else more productive.

Grumpy

Bidding is not ALWAYS done in secret. It depends who your customer is. You have to understand there are varying levels of complexity in the bid processs and that depends on who is involved. Who is the customer? Who is the architect, if there even is one? Who is the general contractor? Who are the subs?

See wheat I know is that in government work the bid is usually almost always "sealed" meaning it is submitted via envelope and opened publicly and ead aloud. The specs are usually very tight and each contractor is bidding the same thing. In these cases if contractor is qualified, lowest cost usually prevails.

Now take a service contractor such as myself who deals mostly direct with the customer. My bids are not secret. The customer collects his bid and hires his contractor based on many variables that are unique to only him.

You are asking a very general question with too many variables to really answer... But the best answer I can give is that bids are submitted sealed to prevent bid tampering.