The synthetic bid set
Three GCs submit bids for the same custom home. The headline numbers make Bid A look like the obvious winner.
| Bid | Headline price | Duration | Allowance detail | Notable exclusions |
|---|---|---|---|---|
| Bid A | $1.42M | 11 months | Low finish allowances with limited backup | Site drainage, utility trenching, several owner selections |
| Bid B | $1.51M | 12 months | More complete allowances by room | Landscaping and window treatment exclusions |
| Bid C | $1.57M | 10 months | Higher allowances and clearer alternates | Few exclusions, higher supervision fee |
Bid A is $90,000 lower than Bid B and $150,000 lower than Bid C. That difference may be real. It may also be a stack of future change orders.
Where the low bid can move
- Allowances: Cabinetry, tile, appliances, fixtures, and lighting allowances are only helpful when they match the owner’s expected finish level.
- Exclusions: A low bid that excludes utility work, drainage, engineering updates, or owner-selected materials may be shifting costs instead of reducing them.
- Schedule assumptions: A shorter timeline can be valuable, but only if long-lead selections and inspections are accounted for.
- Markup rules: If change-order markup is unclear, every allowance overage becomes harder to forecast.
- Payment timing: A lower contract price with front-loaded draws can still create more owner risk than a higher price with cleaner milestones.
What Hank would ask
For this synthetic set, Hank would not choose a winner. Hank would produce questions such as:
- Which exclusions are already covered by owner vendors, and which are truly missing from the project budget?
- What happens when an allowance is exceeded: who approves, what markup applies, and when is the owner notified?
- Which bid includes lien waiver expectations, inspection checkpoints, and retainage?
- Are schedule claims tied to selection deadlines, permit assumptions, or subcontractor availability?
- Which alternates should be accepted, rejected, or priced before contract signing?
The teardown takeaway
The cheapest bid can be the best bid when the scope is complete and the assumptions are clear. The risk comes from treating incomplete bids as comparable just because the totals are lined up in a spreadsheet.
Request a Build Risk Audit before you sign the bid package or contract.
Hank provides educational project-management support and AI-assisted checklists. Hank is not a law firm, attorney, lender, inspector, or licensed contractor. This is not legal, financial, or construction advice. For project-specific advice, consult a qualified Utah construction attorney, lender, inspector, or licensed professional.