Bid shopping in construction is an unethical practice by the general contractor. In this guide, we will learn what is bid shopping and how it works.
Table of Contents
What Is Bid Shopping?
Bid shopping is the act of getting the lowest bid. This is poor practice by a general contractor.
This is done by disclosing the subcontractors’ bids to other bidding subcontractors.
If a new subcontractor agrees to do the work at a lower price, the general contractor awards the contract to that bidder.
This practice commonly adopted by the general contractor to subcontract work to subcontractors.
This is a way of pressuring the original subcontractor to lower its bid.
How To Stop Bid Shopping?
It is very difficult to stop bid buying.
A subcontractor may enter into an agreement with the general contractor to make it confidential.
A subcontractor may add specific clauses in the bid regarding no change in the bid price.
The client may require general contractors to state their intended subcontractors and may be prohibited from changing them after the contract has been awarded.
Final Thought
Bid shopping is illegal in the construction industry.
This affects the entire tender process.
Most government organisations set their own rules for contract award to prevent bid-buying.
Faq
yes. It is prohibited.