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Low Bid Syndrome – why cheap usually can’t also be good in construction

February 24th, 2011 Leave a comment Go to comments

This came to me in part of an email from a contractors blog I read.  It is a re-post of someone else’s comments, I did not write it.  That said, I could not agree more!

Low bid Syndrome – why cheap usually can’t also be good in construction

  • There have been countless news stories by leading national and local news magazines about unscrupulous contractors that disappear with homeowner deposits, operate without a license or never complete the work.
  • Some contractors will simply throw out a low bid as a negotiating strategy. Contractors with integrity give their best price the first time and include specific details of all materials to be used in the proposed project.
  • Every contractor is in business to make money. If you receive a bid that is 15% or more below another bid – it simply isn’t the same job. It can’t be because there isn’t that much profit margin in a project. The contractor either isn’t using the same materials or will cut corners on installation in order to make a profit. There are many places to cut corners of which the unsuspecting homeowner/client is unaware.
  • As noted in the quote from the Wall Street Journal, it is easy to be fooled by the low quote and a “nice person”. If a bid seems to be too good to be true, it is. Call at least 5 references and ask about the total job cost at completion versus the proposal pricing.  Did it go like it should?  Did they get what they paid for?
  • Many times, the low bidder isn’t licensed to perform the work proposed. An unlicensed contractor either does not have the experience or competency to secure a contractor’s license or has cut a corner to save money by avoiding the cost associated with being licensed, bonded and insured.
  • Unfortunately for homeowners, if they hire someone who is not licensed, they have no recourse through the ROC complaint process or the Residential Contractors’ Recovery Fund.

If you are seriously considering hiring any contractor with a very low bid ask all the important questions and get the answers in writing to every question before you sign any paperwork. You will be glad you did.

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