"Should I Tell Contractor Other Bids?" A Quick and Easy Guide

The construction bidding process can sometimes feel like walking a tightrope. You need to maintain your balance just right to ensure a successful kick-off for your construction project. 

One thing that can upset this balance is the decision of whether to disclose your bids to other contractors.

It’s a tightrope of its own. To some, it is downright unethical — pushing the boundaries of fair competition. But others see it as a way to promote transparency and secure a fair deal for both sides. 

So which side should you lean on? 

To Show or Not to Show: Should I Tell Contractor Other Bids?

In our view, revealing your other bids to a contractor isn’t a major issue, but there’s a caveat.  

You need to ensure that your contractor has already provided their estimate for the project first. Why? You want to avoid giving the impression that you're: 

• merely shopping for the lowest price
• triggering a mini-bidding war
• solely focused on price rather than quality. 

Bid Shopping: What is It Exactly? 

Note that there’s a fine line between showing your bids to other contractors and engaging in bid shopping. 

Bid shopping involves revealing a contractor's or subcontractor's bid to other potential bidders before the contract is awarded to secure a lower price. In some cases, even after a contract is awarded, some contractors may still shop for other estimates, looking for companies to invite to do the subcontracting work more cheaply.

It is considered unethical, and has, in fact, been condemned by The Code of Ethical Conduct of the Associated General Contractors of America.

This is because it puts pressure on other contractors to undercut each other's bids. And the consequences can be concerning – potential compromises on quality, corners being cut, and even wage reductions to meet the artificially lowered bid.

That's why you need to tread carefully. Instead of fixating solely on securing the cheapest price, prioritize transparency and fairness. For example, you can tell a contractor about another bid as a way to:

• make meaningful (and honest) comparisons between both contractor bids
• tap into the contractor's expertise

Comparing Apples to Apples

If you notice a significant price difference between bids, consider it an invitation to delve deeper. You want to understand the rationale behind their pricing structures, the scope of work, and everything in the mix. 

Even if the bottom line might appear similar, the devil is often in the details. The same price doesn’t always translate to the same amount of work or the identical quality of products. 

Take, for instance, a roofing project. Contractors may propose different grades of underlayment materials for the building, which may impact durability and weather resistance. The quality, brand costs, and warranty of shingles or roofing tiles can also vary significantly. You can also discover that one contractor is using a specific manufacturer's products while a different contractor opts for a different brand. 

Through this discussion, you can express your preferences based on past experiences, advice or recommendations. This fosters a dialogue that improves both parties' understanding and ensures you're on the same page.

Another thing you may want to consider? Open communication doesn’t just benefit your current project. It can also help your contractors refine their strategies and step up their game. You can point out areas where they could improve for future projects or the next clients. It's a win-win situation.

That said, revealing your bids also carries its fair share of risks:

Unfair Competition

The information shared by the first bidder might be sensitive and exclusive. While they were open with it to secure the bid, it might not be information they decided they'd willingly expose to competitors. So this puts the other guy at an advantage and means they have an edge over other competitors.

Pricing Adjustments

There's always the risk of price matching. Some contractors might adjust their bids to match competitors, but at what cost? Quality? Integrity? You don't want a race to the bottom when it comes to your house or project.

Sometimes, it's simply more practical and time-saving to accept that a bid is beyond your budget. You're better off politely declining with a few kind words to soften the blow in such cases. Creating a construction estimate takes time, and many contractors will appreciate your response even if it's not the one they were hoping for and they have not secured the job.

Want To Build Stronger Relationships With Contractors?

Downtobid helps optimize the pre-construction bidding process, particularly in identifying construction bid packages and managing subcontractor invitations.

The bid invitation software platform takes the hassle out of matching bid packages with the perfect subcontractors. No more sifting through endless lists – it automates the entire process, ensuring that the right contractors get the invite to bid on the most relevant parts of your construction project.

It even goes the extra mile by creating personalized invites, helping you forge genuine connections with contractors. You can bid farewell to the bland, cookie-cutter bid invitations that feel like a routine procedure.

And we're only scratching the surface of what Downtobid can help you accomplish. Ready to explore the complete range of features?

You can try it for free today.