A quick Google search on the best-practices for getting contractor bids will return numerous results on why consumers should “triple bid.” The argument is that the consumer will be able to find the best contractor at the best price, leveraging bids to their advantage.
But, while this has been the standard of practice for decades, it has become an outdated model that really doesn’t serve the best interest of consumers —or contractors. There are a growing number of reasons why consumers shouldn’t triple bid on construction projects. Below, we’ll look at just a few reasons why we believe everyone is better off avoiding it.
#1. Service Disadvantage
The entire triple bid process revolves around finding the cheapest option. But, in the construction world, the lowest bid does not always mean the highest quality service, materials, or workmanship. The consumer who is simply looking for the best financial deal may find that the contractor has to skimp in certain areas to be able to fulfill the terms of the bid.
If you’re doing a minor home maintenance item like pressure washing your driveway —where not too much can go wrong— then it might make sense to find the cheapest option. But on a home renovation or remodel where there are many moving parts, focusing on price alone could mean that your expectations for service, quality, or timing are sacrificed. Which leads to the second point …
#2. Takes Focus Off Relationships
When consumers triple bid, it takes the focus off of the relationship between the contractor and the homeowner and puts it on the price. Is this really the way to start a relationship with someone who will be in your home for weeks or months helping you make improvements to your biggest investment?
Having price be the driver can send the wrong message when you’re making such a big investment in your home. Our argument is that more weight should be placed on the relationship between contractor and homeowner —on communication, respect, trust and workmanship.
For all the same reasons that you wouldn’t want the cheapest surgeon operating on your body, you shouldn’t want a contractor who offered the lowest bid to work on your home. You should set out to find a contractor that you feel you can openly communicate with, who understands your vision for the project, whose reputation is impeccable, and who can help you execute with ease. You may not find this if you’re focused predominantly on price, which is the message you’re sending to the contractor when you solicit multiple bids.
#3. It Really Costs More
It may seem counterintuitive, but triple bidding your project actually ends up costing more in the long run. Simply put, it’s expensive and time consuming for contractors to create a bid. There are materials to source, labor costs to confirm with third parties, dumpsters and trash pickup to estimate, plumbing and electric bids to outsource, and more. Creating a pricing matrix for all of these moving parts can take 40-80 hours depending on the project —and two-thirds of the contractors who create the bid aren’t going to get the business.
The time to create the bid is a sunk cost for contractors. So when they incorporate the costs of doing this for each project, even though they’ll only win a third of them, they have to charge more in other areas to maintain a livable profit margin. As a whole, the industry is working these costs into their overall cost structures, which includes their time, the bidding software, and more.
What’s the Alternative …
If the triple bid process is not effective in finding a contractor based on service, quality and cost —what’s the alternative? We would argue that the best method for selecting a contractor is to call, meet and interview your prospects. There’s nothing wrong with asking friends and family for recommendations and for doing your due diligence online, but once you’ve narrowed it down to a few prospects … meet them!
In your face-to-face meeting you’ll be able to gauge their ability to communicate effectively with you, as well as their ability to “see” your vision. Don’t be afraid to trust your gut instincts regarding their professionalism. And, don’t be afraid to talk about money. Most quality contractors are able to value engineer the budget to work with your needs.
Remember, it doesn’t cost anything for you to do your homework!