Bid Shopping in Construction Part 5
At the conclusion of this five-part series, it’s safe to say that bid shopping is unwise and reveals a dark side of the construction industry. Not only is bid shopping unethical, it has a negative impact on the construction process as a whole. In this final section, we will discuss this as well as what industry professionals and organizations think about it.
The Impact of Bid Shopping
There are rules on how to bid competitively and contractors must ensure they are bidding ethically. Does bid shopping defeat the purpose of the competitive bid process? Although views differ in the industry, many do believe that it does have a negative impact on the bidding process.
Bid shopping is unfair and unethical for different reasons. The only party to really benefit from bid shopping is the general contractor. Playing bidders against one another negatively inhibits a contractors’ ability to offer quality work at the best price. Because the price is lower, bid shopping can lead to cheap labor, cheap materials, and an increase in claims and change orders. Our Jacksonville construction attorneys know very well the effects of claims and change orders and how they often lead to project delays and legal disputes.
Industry Professionals’ Take On Bid Shopping
Contracting professionals along with a number of organizations oppose the practice of bid shopping. It is viewed as a hindrance to quality contract performance, and it is viewed as a violation of federal and state laws that govern contracting methods. Some organizations, such as the American Society of Professional Estimators address bids in their Code of Ethics.
The Associated General Contractors of America (AGC) are opposed to bid shopping viewing it as a hindrance to sustainable contractor and subcontractor relationships. On their website, the association writes, “Bid shopping or bid peddling are abhorrent business practices that threaten the integrity of the competitive bidding system that serves the construction industry and the economy so well.” They are also skeptical about federal legislation designed to prevent bid shopping. If you are concerned about unethical practices within the industry, please consult with a Jacksonville construction lawyer for more guidance.
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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.