The Bidding Process

Lower price is not always the wisest choice.

By Allen W. Griffin, CGR - Owner of Gryphon Builders

The Bidding Process We are a society bombarded with low prices, bargains and “act now” sales. Just dig through the pile of ads in the newspaper, turn on the TV or radio and someone is guaranteeing the lowest price. But they are selling a commodity item manufactured by the same company and it is only a matter of mark up. We don’t buy the cheapest computer we can find but, we will look for the best price on a certain brand and model. In residential construction each builder is the manufacture and we know there can be a huge difference in manufactures.

Most of us are aware of the government and commercial project policy of awarding on a low bid system. But you also have to understand that only those contractors who meet their standards may bid. These projects are then controlled by a team of professionals.(i.e., architects, engineers and independent inspectors), who make sure that the contractor follows the specifications as set out in the plans. The levels of detail in the documents are precise and to the point from what grade bolt to use and the torque on each nut

Residential construction companies have no such team of professionals keeping them in check. After the plans are drawn, the Architect is typically only consulted on aesthetic issues and the engineer is only called out to inspect the foundation make up. After that, the builder is in charge. You the homeowner must rely completely on his or her professionalism. You will have to depend on their experience and judgement to fully complete your home to your satisfaction. In short, you must trust them.

During the bidding process you may believe that all builders you interview are the same and follow the same standards – one contractor is just as good as another, and that all you need to do is find the least expensive one. But, what are the standards for the hundreds of products and assemblies that are going to be manufactured for you & who is going to enforce them? Any builder can be the lowest bid by simply using the cheapest products, unqualified subcontractors or simply excluding certain items needed to complete your project that are not shown on the plans. You will have to pay the increased cost of these items as they come up to keep your project moving, because once you enter into contract, you’re committed to the project and the builder. Most construction loans do not cover these items, so those will be coming straight out of your pocket.

In residential construction, the low bid system is at the root of most of the bad projects you hear about. When you begin to receive bids, compare them to each other. Is the one that at first gives you sticker shock a full bidder (a “truer”bid), while the one that first appeals to you actually falls far short of the real work and expectations for your home. To have a successful project, look at the builder’s reputation and credentials first. Look at their “brand name” just as you do for a computer purchase. This is your home, so make the wisest choice you can. Don’t lower your standards for the sake of a low price, you will be living and paying for this choice for many years to come.

Allen W. Griffin, CGR, is the owner of Gryphon Builders, a six year member of the GHBA and a Remodelors Council Board member.