Can You Explain Your Bid Spread?


If you were to ask contractors what they like most about construction, they probably wouldn’t say, “I love preparing bids.”

Most contractors love being on the job site, not being cooped up in an office working on numbers. Yet contractors get the majority of their business from bidding on projects. The most successful ones have developed a winning strategy that results in the lowest bid and generates a profit for their firms.

When sureties and agents look at lump-sum construction bids, they must carefully consider the bid spread — that is, how far the winning bid is from the other bids submitted. If the spread between the winning bid and next-lowest bid is greater than 10%, further clarification is required.