The Changing Bidding Climate

With the uncertain economic downturn facing everyone, many public owners are experiencing a number of changes in public works bidding:

1. More bids are being received for each public works projects than were received when construction was booming.
   
   
2. Many of the bidders are new to public works and are trying their hand in the public arena as other markets, such as residential construction, are drying up.
   
   
3. Many public owners are obtaining significantly lower bid prices on public works projects, much lower than the estimate. The University of Washington opened bids on Wednesday for an elevator upgrade project and received seven bids. The low bid came in at $337,500, almost $100,000 less than the estimate.
   
   
4. Bid prices from different bidders are much more closely packed together, with less of a range of prices. On the UW project mentioned above, the prices ranged from the low bid of $337,500 to a high bid of $379,800, still more than $50,000 less than the estimate.
   

Why are these trends occurring? It's probably a combination of factors.

Some bidders are bidding without much, if any profit, in order to get the project and keep their workers busy and employed. The lower bid prices are also probably a reflection of the fact that owners were paying more than the actual value of the work when times were prosperous and bidders could choose to bid higher and had their pick of projects.