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Estimating & Bidding

Bid Peddling

In Plain English

When a subcontractor approaches a GC after bids are in and offers to do the job cheaper than the sub whose price was used.

Definition

Bid peddling is the unethical practice of a subcontractor soliciting work from a general contractor after bid day by undercutting the price of the subcontractor whose number the GC used to win the project. It undermines the integrity of competitive bidding and is widely condemned by industry associations. Bid peddling differs from bid shopping in that the sub initiates the contact.

Why It Matters in Bidding

Bid peddling threatens the numbers a GC relied on at the moment of greatest exposure, because the GC has already committed a price to the owner based on the original sub's bid. Accepting a peddled price can shave cost but damages trust with the subcontractor community, drying up reliable coverage on future bids.

Example

Two days after winning a hospital project, a GC's estimator gets a call from a mechanical sub who did not bid originally, offering to beat the carried number by several percent, and the estimator must weigh the savings against the reputational cost of taking it.

Related Terms

Bid ShoppingSubcontractor BidCompetitive BiddingGeneral Contractor

Frequently Asked Questions

The difference is who starts the conversation. In bid peddling the subcontractor approaches the GC after bid day offering a lower price; in bid shopping the GC takes a sub's number around to competitors seeking someone to beat it. Both are condemned, but the initiating party differs.
It exploits prices that other subcontractors developed in good faith, letting a peddler win work without competing fairly on bid day. Over time it discourages careful, honest estimating because subs fear their hard-earned numbers will simply be undercut after the fact, weakening competitive bidding for everyone.
Many GCs adopt written policies against post-bid price shopping and peddling, honor the subcontractor whose number they carried, and use listing or anti-shopping clauses on public work. Maintaining a reputation for protecting bid-day prices encourages the best subs to keep submitting their sharpest numbers.

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