In Plain English
Quick Answer
An optional scope reduction priced separately so the owner can cut it from the project if needed to save money.
Definition
Definition
A deductive alternate is a separately priced bid item representing a scope reduction that the owner may remove from the base bid to reduce project cost. Bidders price the deduction independently so the owner can evaluate cost savings from scope reductions. Deductive alternates are used when the budget may be insufficient to fund the full base scope.
Context
Why It Matters in Bidding
Deductive alternates let owners keep a project within budget by removing scope after seeing real bid numbers, and how a contractor prices them can decide award outcomes. Estimators must price the deduction at true cost savings, including lost overhead and any inefficiency from removing the work, not just the bare scope value. Aggressive or sloppy deductive pricing can swing the apparent low bid and create margin problems if accepted.
Example
Example
Facing a tight budget, an owner takes a deductive alternate removing the site's decorative paving, and the estimator prices the deduct to reflect not just the paving cost but the overhead and mobilization that no longer apply.
See Also
Related Terms
FAQ
Questions Contractors Ask
How is a deductive alternate priced in a bid?
The bidder prices the value of the removed work as a credit to the base bid, accounting for material, labor, equipment, and the portion of overhead and profit that disappears with the scope. A well-priced deduct reflects genuine savings; underpricing the credit erodes margin if the owner exercises the alternate.
What is the difference between a deductive and additive alternate?
A deductive alternate removes scope from the base bid for a credit, while an additive alternate adds optional scope for an additional price. Owners use additive alternates to buy extras if budget allows, and deductive alternates to trim cost when bids exceed the budget. Both are priced separately from the base bid.
How do alternates affect bid award decisions?
Owners often evaluate award based on the base bid plus or minus selected alternates, so the order and combination of accepted alternates can change which contractor is low. Bid instructions usually state how alternates factor into award, making it critical for estimators to price each alternate accurately and read the evaluation rules carefully.
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