During bid preparation, a general contractor discovers that a key subcontractor has submitted a bid 30% lower than all other comparable bids. What is the most appropriate action?
Correct Answer
B) Contact the subcontractor to verify the bid and scope understanding
A significantly low bid may indicate errors, misunderstanding of scope, or potential problems. Professional practice requires verification to avoid project delays or disputes later.
Why This Is the Correct Answer
Option B represents proper professional due diligence when encountering an unusually low bid. A 30% variance from other comparable bids is a significant red flag that could indicate calculation errors, misunderstanding of project scope, or missing work items. Contacting the subcontractor to verify their bid and confirm their understanding of the scope protects both parties from potential disputes, change orders, or project delays that could arise from bid errors. This verification process is considered standard industry practice and demonstrates professional responsibility.
Why the Other Options Are Wrong
Option A: Split the difference between the low bid and next highest bid
Simply ignoring the low bid without investigation wastes a potentially legitimate opportunity and fails to follow proper due diligence procedures. The bid might be accurate, and the subcontractor could offer real value or efficiency advantages.
Option D: Accept the low bid immediately to maximize profit margin
Arbitrarily splitting the difference between bids has no basis in professional practice and could result in paying more than necessary while still not addressing the underlying issue of whether the original low bid was accurate or contained errors.
Memory Technique
Use the acronym 'VERIFY': Very Extreme Rates Indicate Further Investigation Yields better outcomes. When bids seem too good to be true, verify first.
Reference Hint
Florida Building Construction Standards and Practices - Chapter on Bidding Procedures and Subcontractor Relations
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