When companies are entering into construction contracts, they may place bids for those jobs. This is something that can happen with general contractors, who may bid for entire projects. It can also happen with subcontractors. For instance, a general contractor may be building a government facility, and they will take bids from roofing companies to determine who gets to do that portion of the job.
There are multiple ways for these bids to be submitted. It’s important to know how the process is supposed to work so that it is fair and equal – and to ensure it adheres to both state and federal laws.
Open bidding
First of all, some projects are done with open bids. This means that there’s a certain date by which all bids must be submitted. But any company or contractor that is going to submit such a bid can already see the previous bids. They can decide if they want to try to underbid those companies or not. There is a lot of transparency in this process.
Blind bidding
Blind bidding is intended to drive the costs down because no one can see the other bids that were submitted and be tempted to increase their own bid. But this can also lead to problems, such as when contractors collude to rig the bidding or communicate about what bids they’re going to put in so that it is not truly blind.
In some cases, charges may result from issues with the bidding system or allegations of fraud and unfair business practices. Those who are facing such allegations need to know about all the legal options at their disposal.