If you want the best price for your project, we recommend the following:
Provide adequate time for the contractor to assemble their bid
Rushed bids lead to higher prices because the contractor does not have the opportunity to become completely comfortable with the details of the project. When in doubt, a responsible contractor will always go with a higher price.
Make sure all bidders have the same information
Questions and answers to any single bidder should be provided to all bidders. This will ensure that the prices bid will be “apples-to-apples”.
Require Bonds
Bonds are almost like insurance policies that the contractor buys on your behalf.
A bid bond ensures the bidder will honor their bid and sign a contract. Without the bid bond, the bidder is free to walk-away from the project for any reason.
Payment and performance bonds will make sure your project is finished and that the bills are paid.
Most reputable contractors can obtain bonds. In most cases, bid bonds are provided at no cost. Payment and performance bonds usually add less than 2.5% to the cost of the project, but that is a very cheap insurance policy for the owner.
Hold a public opening and read-out of the bids
Generally, the more effort a bidder puts into a bid, the lower the bid amount. That’s because the final price is directly proportional to the level of comfort the bidder regarding his/her understanding the overall project.
However, it takes considerable expense to fully investigate a project. A public bid opening gives the contract confidence his bid will be treated fairly and therefore justifies a full investigation of the project.
On the other hand, closed bid openings create uncertainty and the bidder is less likely do the full investigation required to submit the lowest bid possible.
Helpful Links
Recommended bidding procedures, American Society of Estimators