Choosing a Contractor by Competitive Bidding

An important service that we perform as Architects is guiding our clients through the bidding or negotiation process. While it’s not the only way of selecting contractors, some of our clients prefer having a few qualified builders submit bids as a way of competing against each other to win contracts. Bidding can be a good method to select a contractor as long as the process is carried out in a way that is fair to everyone and with the understanding that price alone is not the only basis for selection. During your initial meetings with an Architect, it is important to determine what approach you want to use to select a contractor.

For bidding to work as a valid selection process, several factors need to be considered:

1. Bidding documents need to complete, detailed, and contain all the information required to develop an accurate price for the work to be performed. If the drawings and specifications do not contain enough information for the contractor to accurately price the work, they will almost certainly add to their bid to cover themselves from having to eat the costs of vague or poorly documented work items. Incomplete information in bid documents forces the contractor to make assumptions and leads to inaccurate bids, which almost always costs the homeowner more. A common mistake people make is to try cutting project costs by negotiating a reduced fee from the Architect in exchange for a less developed design package, or in choosing an inexperienced designer or draftsman to prepare the plans. It is a worthwhile investment to spend a little more up front for quality drawings and specifications, with the payoff realized in lower overall project costs and reduced headaches. Creating quality bid documents is one of the many ways an Architect can add value to your home.

An architect's plans should be complete and detailed.

An architect’s plans should be complete and detailed.

2. Bidders should all be in the same “league”. Before choosing potential contractors and asking them to bid a project, it is a good idea to research the candidates and talk to their references. They should have a proven track record of successful completion of projects that are similar in scope to the one they are being asked to bid. A construction company with a few employees that uses a pickup truck for an office is going to have a lot less overhead than a bigger company that has an office with support staff, provides benefits for their workers, and is well insured. Figure out the level of service you want from a contractor, and choose your bidders accordingly.

3. Limit the number of bidders to three at the most. Any more than that and you will be spending time and money responding to lots of questions. It takes a lot of time for a contractor and his subcontractors to develop an accurate bid, and it’s time they often don’t get paid for. If there are too many competitors, some may opt out or not spend enough time creating their bids, and the results will be skewed.

4. While contractors are preparing their bids, make sure any information that is communicated gets to all the bidding parties. It’s common to have a contractor call and ask for clarification, substitutions, or for information that is not in the documents. For bidding to be fair to all, written addenda or clarifications need to be sent to everyone and become a part of the bid documents. This can be time consuming, so clients should be willing to compensate Architects for the time it takes to make sure bidding is done properly. Well prepared drawings and specifications can help minimize time spent responding to inquiries during bidding.

A reputable contractor will build a quality home at a fair price.

A reputable contractor will build a quality home at a fair price.

One important thing to consider before deciding if you want to award a contract by competitive bidding is what the priorities are for your project. Bidding can be a way to get a project built for the lowest cost, but sometimes construction quality can suffer in this type of relationship. If creating a high quality home is your top priority, it may be better to select a reputable contractor early in the process, foster a good relationship with them, and then develop a project budget that everyone can agree on before signing a contract. A good contractor knows who the best subcontractors and suppliers are, and unless one really stands above the rest, can secure the best quality at the best value by providing at least two bids from most of them.

Tom Russell, LEED AP and John Hendricks, Architect AIA, NCARB

There are many builders in the Northwest who build quality heavy timber construction. If you are interested in creating a mountain style home, we would enjoy the opportunity to work with you on the design, and can recommend some excellent Contractors. Hendricks Architecture specializes in the design of timber mountain style homes and cabins. While it is not the only type of architecture we design, most of the homes we’ve completed are in mountain resort areas throughout the West. If you are interested in a mountain home, or you have any other inquiries, please contact us.

Hendricks Architecture, mountain architects in Sandpoint, Idaho.

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