Key Benefits of an Optimized Bidding Process

• Significant Cost Savings: Studies show each additional bidder can result in ~4% savings. On a $1 million project, this could mean $40,000 in savings.
• Compliance Assurance: Many institutional real estate owners require bidding for projects above certain thresholds to fulfill fiduciary obligations.
• Risk Reduction: A thorough bidding process helps both owners and winning bidders better understand project details, reducing the risk of change orders and delays.

Essential Pre-Bidding Considerations

Before initiating the bidding process, consider these crucial factors:

• Allow adequate time for preparation - rushing leads to costly errors
• Ensure construction plans are detailed and comprehensive
• Focus on finding the lowest qualified bidder, not just the lowest bid
• Create robust bid forms to minimize misunderstandings

Optimizing the Number of Bidders

Finding the right number of bidders is crucial for success:

• Research Findings: Triple bidding can lead to an 8% reduction in the "bid low price"
• Practical Considerations: While more bidders can mean better pricing, consider the administrative burden and bidder motivation
• Sweet Spot: For most projects, 3-6 bidders provides the optimal balance between competition and manageability

Best Practices for Bid Management

• Create detailed, comprehensive bid forms
• Split different scopes of work into separate bid forms when appropriate
• Maintain clear communication with all bidders
• Consider both cost and qualifications in selection
• Document and learn from each bidding process