Bid Work = Losing Proposition

Posted on June 18, 2010

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A few weeks ago our firm was lucky enough to have Guy Peterson, an accomplished architect from Sarasota known primarily for his modern beach houses, as a guest speaker. He related his process to get his work constructed (negotiated price between contractor and owner) and noted that bid jobs were a dying breed, that in residential work he sees it much less frequently than he used to.

In an article in Architectural Record, attorney and author Barry LePatner stated: “We live in a society of fixed prices”. His position is that one of the current problems leading to construction cost overruns is not knowing what the final cost will be going into the project; too many variables out of the clients’ control can affect the project budget. Considering how costly it is to build anything, it is a bit odd to think anyone would commit to a project with hundreds of thousands of dollars at stake, maybe several million, and not know what the final bill will be. Such is industry tradition.

Even eBay, founded on bidding via online auction, offers the option to purchase outright for a fixed price provided the prospective bidder ‘has to have it now’.

If residential contractors, the most common and simply skilled of the building contractor taxonomy, are unwilling to bid for work, what does that mean for more sophisticated specialists like healthcare contractors?  A movement is under way to control construction costs, and bid work appears on its way to being trampled under foot.

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Posted in: Project Cost