The lowest bid is essentially the lowest bid or lowest price offered. It typically does not include an analysis of life-cycle costs (such as reliability, maintenance, or other long-term costs), vendor reliability (based on past performance), adaptability to future conditions (as might be advisable with technology purchases, particularly software or services contracts), or other such factors. Construction firms often make unrealistically low bids to get jobs but then find plenty of reasons later to jack the price up enough to allow for a profit. It is usually tempting to go with the lowest bid for your commercial or residential remodeling project. But just remember that the lowest price may not be the best value. In this blog, we would like to give you a reason to be wary of the lowest bid.
Low Bids Might Not Be Accurate Or Honest
Some contractors will intentionally toss out lowball bids as a negotiating strategy to get you roped in. These quotes will often omit specific details regarding materials and work needed, as well as explanations and on-site consultations. When the building is underway, it becomes prohibitively expensive to fire the contractor and start anew. The owner has essentially become a hostage. If you are issued a bid without an explanation or on-site consultation, you should not only question it but the skill and professionalism of your contractor as well.
All Experienced Contractors Are In Business To Make Money
To stay in business, all contractors have to make a profit. So, if you receive a number of quotes and one is 15-20% lower than the others, it might mean that the team is going to be rushing the work, cutting corners, using low-quality labor, or playing games to make up the difference in cost. Experienced contractors will, for the most part, agree on the best way to complete a job. Craftsmanship takes time, so invest in a team of professionals who will do the job right and give it the time it deserves.
Is It Important To Check References On Contractors Before Hiring Them?
If you are considering a low bid, remember that it is easy to be fooled by a low quote and a great personality, so call at least 10 references. References can tell you if the contractor stuck with the timeline, if there were any issues with the payment process, and the overall quality of their work, even after the project has wrapped. Checking references can also help you get a sense of if a contractor is trustworthy and plays by the book.
If You Do Not Fully Understand How Serious Working With A Contractor Is, You Could Get Taken Advantage Of
Many contractors hide behind low prices. There is always the possibility that the low bidder isn’t licensed. An unlicensed contractor cheats the government, and they will probably cheat you, too. Avoiding them is a smart move. Being unlicensed may be one reason they have given a low bid. Check your state or municipality to see if your contractor is licensed. Every state and municipality are different. For instance, the only contractors that the State of Kentucky requires to carry a state-issued license are electrical contractors, plumbing contractors, and HVAC contractors. Other than that, all licensing will go through local municipalities and counties. A general contractor in the state of Florida must be licensed to perform construction work legally. There are two primary licenses to choose from which will allow you to perform general contracting work either throughout the whole state of Florida or only in a specific local jurisdiction.
There have been countless local and national news stories about contractors disappearing with homeowner deposits, operating without a license, or never completing the work. In most situations, the homeowner was blinded by a low bid. If you are hiring a contractor, do your homework and make sure that they are licensed. The time spent checking could save you many headaches later.
Complete Structural Partners (CSP) provides commercial and residential contracting, renovation, and remodeling services to the Greater Cincinnati/Northern Kentucky area. We specialize in retail, office, healthcare, warehouse, and manufacturing construction projects. CSP provides quality craftsmanship that is completed on time and under budget. Our Interior Design Division provides decorating, staging, and space planning services as well as construction services for small remodeling projects.
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