When reviewing construction bids, it’s tempting to focus on the lowest number. On paper, a cheaper bid looks like a win. But in practice, unusually low bids often lead to budget overruns, delays, and frustration once the project is underway.
A bid should be competitive — but it should also be realistic. Here’s why some bids come in far lower than others, and what that can mean for a project.
Missing Scope Items
Not all bids include the same scope of work — even when they’re based on the same drawings. A low bid may be missing key components such as:
- Site preparation
- Permit fees
- Utility connections
- Finish materials
- Cleanup and disposal
- Testing and inspections
If it’s not clearly listed, it may not be included. Those costs don’t disappear — they show up later as change orders.
Allowances That Are Too Low
Allowances are placeholder budgets for items not yet selected, like flooring, cabinets, or fixtures. Some bids use unrealistically low allowances to keep the total price down.
Example:
- Bid includes a $3/sf flooring allowance
- Actual client selection costs $9/sf
- Difference becomes an added cost later
The bid looked cheaper — but wasn’t truly cheaper.
Underestimated Labor
Labor is one of the hardest costs to estimate accurately. A low bid may assume:
- Smaller crew sizes
- Faster production than realistic
- No weather delays
- Perfect site conditions
If those assumptions prove wrong, schedule slips and cost increases follow.
Intentional Underbidding
In some cases, a contractor knowingly bids low to win the job, planning to recover profit through change orders later. This creates a cycle of:
Low bid → frequent “unforeseen” extras → rising final cost
This approach damages trust and makes budgeting impossible for the owner.
Quality Corners That Get Cut
When margins are too thin, something has to give. Risk areas include:
- Lower-grade materials
- Reduced supervision
- Rushed workmanship
- Fewer quality checks
- Less experienced labor
The building may pass inspection — but long-term performance can suffer.
Incomplete Plan Review
Some low bids come from incomplete analysis. If drawings and specs aren’t fully reviewed, important details may be overlooked in pricing. That leads to:
- Surprise costs
- Field redesign
- Schedule disruption
Thorough estimating takes time — and that time shows in the bid.
What a Healthy Bid Looks Like
A strong bid is:
- Detailed
- Transparent
- Scope-defined
- Allowance-clear
- Schedule-aware
- Open to questions
It may not be the lowest — but it is the most predictable.
The Real Goal: Cost Certainty
The best project outcome doesn’t come from the lowest starting number — it comes from the most accurate total cost. Reliable builders aim for cost certainty, not headline price.
Choosing a bid should feel like selecting a plan — not taking a gamble.