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Estimating & Bidding

Negotiated Bid

In Plain English

A contract award where the owner chooses a contractor and works out the price through direct negotiation instead of competitive bidding.

Definition

A negotiated bid is a contract award method in which the owner selects a contractor based on qualifications, past performance, or relationship and negotiates the contract price directly rather than through competitive bidding. Negotiated contracts allow for greater owner-contractor collaboration and are common on private projects and design-build delivery. They require the owner to have sufficient market knowledge to validate pricing.

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