The contractor bidding process for any building project is a tricky one to say the least. To quote John Ruskin:

“There is hardly anything in the world that some man cannot make a little worse and sell a little cheaper, and the people who consider price only are this man’s lawful prey.”

Most builders instinctively know this going into work with a contractor, yet fall prey to the low bid time after time and wind up paying the price in many ways.

Loss of Reputation

The customer, or potential customer, working with the home builder relies heavily on the general contractor to build their home. Whichever various subcontractors the general contractor (the homebuilder) chooses must be chosen wisely and with care during the home build process. No homebuyer wants to put up with a lousy job and if things do not go well with the subcontractors, the builder’s reputation can be harmed.

Long Build and Inspection Times

More times than not, the cheapest subcontractor bid isn’t as reliable as the builder would hope for. They can be late, costing time to the project. Or their work could lead to failing of an inspection time and again thus increasing the time it takes to complete the job.

No Shows and Failed Jobs

There is another real problem that can happen when your low bid subcontractor realizes that he cannot finish the job. They will fail to pay their supplier or laborers and then file liens on the job to get paid. The lien problem can really cause havoc during the closing process and eventually, the lien must be paid.

Don’t get me wrong; the high bidder can also test the general contractor’s systems and hope to make their year on one job. Usually, the middle bid is the best one to consider, assuming their references (banks, vendors, and satisfied customers) check out then they are most likely to win the job.