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Estimating & Bidding

Bid Shopping

In Plain English

When a GC tells other subs what price the lowest sub quoted in order to get an even lower price.

Definition

Bid shopping is the practice of a general contractor revealing a subcontractor's bid price to competitors in order to obtain lower prices after the GC has won the prime contract. It is widely considered unethical and damages trust between general contractors and subcontractors. Some states have laws limiting bid shopping on public projects.

Why It Matters in Bidding

Bid shopping distorts the pricing that flows into a project: when a general contractor discloses one sub's number to drive others lower after winning the prime contract, the savings rarely reach the owner and the squeezed subcontractor may cut corners or pursue change orders to recover margin. It erodes the trust that makes subcontractors willing to quote aggressively, which over time inflates bids as subs pad numbers in anticipation. Several states curb it on public work through bid listing laws that lock in the subcontractors named at bid time.

Example

After winning the contract, the GC tried bid shopping by telling a second electrical sub the original quote, but the project's bid-listing requirement barred substituting away from the subcontractor named in the bid.

Related Terms

Bid PeddlingSubcontractor BidCompetitive BiddingGeneral Contractor

Frequently Asked Questions

Bid shopping is initiated by the general contractor, who shops a subcontractor's price around to pressure competitors lower. Bid peddling is the reverse: a subcontractor proactively offers to undercut a known competing quote to steal the work. Both occur after bids are submitted, undermine fair pricing, and are widely viewed as unethical in the construction industry.
It breaks the implicit good-faith expectation that a subcontractor's quoted price will be honored, exploiting numbers the sub disclosed in confidence. It rewards last-minute price erosion over genuine competition, pressures subs into margins that invite corner-cutting or disputes, and ultimately discourages subcontractors from bidding hard, which raises costs across the market.
Common defenses include submitting quotes only minutes before the bid deadline so there is no time to shop them, marking proposals confidential, and bidding on public projects governed by subcontractor listing laws that bar post-award substitution. Building direct relationships and requiring written scope agreements before disclosing detailed pricing also reduces exposure.

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