Bid shopping
Bid shopping is disclosing one subcontractor's price to its competitors after bids are in, to pressure them into undercutting it.
Also written as bid peddling, shopping bids.
Last updated
Reviewed by Eric Collin · President and Founder of Firmo Construction, 20+ years in preconstruction and bid evaluation
It is distinguished from ordinary negotiation by the disclosure. Asking a bidder to sharpen its number, or to price a reduced scope, is normal commercial practice. Telling that bidder what a competitor submitted, so it can bid beneath a figure it was never meant to see, is not.
The mirror image is bid peddling, where a subcontractor volunteers to beat whatever number is currently leading. The two feed each other, and both are widely regarded as unethical in the industry — the AIA and AGC documents address the practice, and some public statutes constrain post-bid substitution of listed subcontractors directly.
The practical damage is to the quality of the bids themselves. Subcontractors who expect to be shopped stop investing effort in careful pricing, pad their first number, or decline to bid to that general contractor at all. Over time the field shrinks to those willing to play, and their prices are not better.
It is also worth separating from legitimate buyout. Buyout converts an estimated scope into a signed subcontract and may involve real negotiation over scope, schedule, and terms. What makes it clean is that a competitor's number is not the lever.
- Buyout
Buyout is the process, after a project is won, of converting each estimated scope into a signed subcontract at an agreed price.
- Subcontractor prequalification
Subcontractor prequalification is the process of vetting a subcontractor's capacity, financial standing, and safety record before inviting it to bid.
- Bid package
A bid package is the bundle of scope issued to subcontractors as a single unit for pricing, usually corresponding to one trade.
- Self-perform
To self-perform is for a general contractor to carry out work with its own employees rather than subcontracting it to a specialty trade.
Catch every gap before you award
MyLevelBid reads every bid line by line, maps them to one scope, and flags what nobody carried.
Request a demo