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Estimating & Bidding

Competitive Bidding

In Plain English

The process of getting multiple contractors to compete on price for the same project.

Definition

Competitive bidding is a procurement method in which an owner solicits price proposals from multiple contractors for the same defined scope of work and awards the contract to the lowest qualified bidder. It is the standard method for public construction contracts in most jurisdictions. Competitive bidding promotes fair pricing and public accountability.

Why It Matters in Bidding

Competitive bidding is the procurement environment the entire platform serves, and on public work it is legally mandated, with award typically going to the lowest responsive and responsible bidder. Understanding bid-tabulation rules, responsiveness, and how a single arithmetic error or missing bond can disqualify an otherwise winning number is essential to converting estimating effort into awarded contracts.

Example

The state DOT opened seven sealed bids for the bridge rehabilitation and awarded the contract to the lowest responsive, responsible bidder at $6.4M, roughly 4% under the engineer's estimate.

Related Terms

Sealed BidInvitation to BidBid TabulationNegotiated Bid

Frequently Asked Questions

Responsive means the bid complies with all requirements of the invitation, such as including the bid bond, signatures, and required forms. Responsible means the contractor has the capacity, experience, financial standing, and licensing to perform. A low bid that is non-responsive or comes from a non-responsible firm can be rejected despite the lowest price.
Competitive bidding awards a fully defined scope to the lowest qualified price, with little room to adjust terms after opening. Negotiated procurement, such as design-build or best-value selection, weighs qualifications, approach, and price together and allows discussion. Public agencies usually require competitive bidding, while private owners more freely choose negotiated methods.
A bid tabulation is the side-by-side comparison the owner prepares after bid opening, listing each bidder's total and often each line-item or unit price. It identifies the apparent low bidder, exposes arithmetic errors, and documents the basis of award. On public projects the tabulation is typically a public record available to all bidders.

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