In Construction Process Can Lead to Defects, construction expert witness Michael S. Poles, GC, CM, RCI, DABFET, ACFE, writes on the complex process involved in a building project:
Competitive Bidding The low bidder gets the contract. With the competitive bidding process, the only way for a contractor to be awarded the contract is that he / she must first be designated the low bidder. In order to be designated the low bidder, it can either mean that the successful bidder has a substantial following of subcontractors and material suppliers that are highly cost effective and are capable of furnishing low quotations for their collective work. Or, it could mean that one or more of them omitted one or more items in their cost breakdown that could equate to a lot of money … missed.
When a low bid is received by a general contractor from their subs and suppliers, it is often wondered by the recipient just what and how much the low bidder left out of his / her bid and whether or not to take the chance of using that low bid. The dilemma is always raised … “Well, if they bid this number to us, then they surely must have bid it to our competition”. And, to make things worse, most of the sub bids are received by telephone only moments before the prime contract bid is to be submitted, and; therefore, the general contractor has precious little or no time available to scrutinize this temptation, otherwise known as the “last minute low bid”.