Bid Shopping in Construction Part 3
Our Jacksonville construction lawyers know it is unethical for subcontractors to not honor their bid promise; however, it’s also unethical for general contractors to bid shop. Although some may feel differently, bid shopping is unethical and effects everyone in different ways. This section will discuss whether there is a remedy for subcontractors who fall victim to bid shopping.
Please read part one for an overview of the bid process and promissory estoppel. Part two will focus on subcontractors who renege on a bid, and part four will focus on bid shopping, and part five will conclude our series.
Is the Subcontractor Bound by a Promise?
Granted, the subcontractor is bound to the general contractor, and the promissory estoppel doctrine protects the general contractor in the event that the subcontractor attempts to revoke or change their original bid. However, here’s where things get a little murky for the subcontractor. Although the subcontractor is bound, the general contractor may decide to reopen negotiations hoping to find a lower bid. Using the subcontractor’s bid to leverage lower bids from other competitors is bid shopping.
Recourse for Subcontractors
Subcontractors invest a significant amount of time in preparing and submitting their bids to general contractors. If the subcontractor conducts themselves with integrity and doesn’t honor their bid price for a reasonable purpose, there may be recourse depending on the specifics of the case. For example, after using a subcontractor’s bid pricing in their submitted proposal, general contractors will often continue negotiations with the subcontractor. If it is proven in a court of law that the general contractor continued negotiating with the subcontractor, before and after entering the prime contract, the promissory estoppel would not apply.
If subcontractors want to avoid falling victim to bid shopping, they should consider having an agreement in place with the general contractor beforehand. Disproving the elements of an estoppel claim is complex and requires the assistance of a Jacksonville construction lawyer.
If you would like to speak with a Jacksonville construction lawyer, please contact us today.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.