During bid evaluation, a general contractor receives subcontractor bids of $45,000, $52,000, $48,000, and $71,000 for the same scope. What should be the contractor's primary concern?
Correct Answer
A) Investigate the scope differences and qualifications of the outlying bids
The $71,000 bid is significantly higher and the $45,000 bid is notably lower than the middle range. Both outliers should be investigated for scope differences, qualifications, or potential errors before making a selection.
Why This Is the Correct Answer
Option B is correct because significant variations in subcontractor bids require investigation to ensure fair comparison. The $45,000 bid could indicate missing scope, inferior materials, or errors, while the $71,000 bid might include additional scope or premium services. Professional contractors must verify that all bids cover the same scope and meet project requirements before making decisions. Simply selecting based on price alone without understanding these differences can lead to costly change orders or quality issues.
Why the Other Options Are Wrong
Option B: Average all bids for the estimate
Averaging all bids is not a valid estimating method and doesn't address the underlying issues causing the bid variations. This approach ignores important factors like scope differences, qualifications, and potential errors in the outlying bids.
Option C: Reject the highest and lowest bids
Automatically selecting the lowest bid without investigation is poor practice that can lead to project problems. The lowest bidder may have misunderstood the scope, excluded necessary items, or may not be qualified to perform the work properly.
Option D: Automatically select the lowest bid to maximize profit
Automatically rejecting the highest and lowest bids without investigation could eliminate potentially valid options. The highest bid might include valuable additional scope, and the lowest might be from a qualified contractor offering competitive pricing.
Memory Technique
Remember 'INVESTIGATE OUTLIERS' - when subcontractor bids have significant variations, always investigate before deciding rather than using mathematical shortcuts or automatic selection rules.
Reference Hint
Florida Building Code - Administrative provisions regarding contractor responsibilities and bid evaluation procedures, Chapter 1
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