Competitive or Negotiated Bid?

Competitive or Negotiated Bid?

Once you’ve approved a set of plans you’re ready to go to the next step. It’s time to hire the contractor.

When entering the bidding process for a contractor, you can do it through competitive or negotiated bidding. This decision often depends on how familiar you are with the local building community.

If you don’t have any experience with local contractors, you will probably decide to do competitive bidding. Once your architect has drawn up your plans and specs, it is sent out to a small group of qualified contractors. Your architect can help you pick the bidders if necessary.

It will take about a month for the bidders to formulate a price for the land development and site work, retention of the permits, and building your home. Upon receipt of the bids, you’ll review them (probably with your architect) and choose your contractor.

If you have experience with a particular contractor or have received high praise about a contractor who you know you want to work with, you will likely choose to do a negotiated bid. The advantage here is that the entire team – you, your architect, and your contractor – are all working together right from the start of the project. This most likely will save time and it may or may not save on the cost.

According to RCWA president Daniel J. Pratt, the bid process you choose will not necessarily affect the cost of your project. Pratt added they have seen as much as 25% or more difference between the low and high bids in a competitive bidding situation.

The bid process will not change the end product, a home that you’re happy with. By choosing an architect to design your home, you’ve already ensured that you’ll have an advocate for what you want. And, combined with a contractor who has the reputation to do the work you want and service his product even after it’s complete, you can be confident of the project’s success whether your home is being built around the corner or around the world.