bid shopping

bid shopping

The practice of a general contractor estimating the cost for subcontractors in order to prepare a bid for construction work,and then attempting to induce those same subcontractors to lower their price below the estimate.

References in periodicals archive ?
Yet the company boasts: "What really sets bid shopping apart is the amount of time and effort we spend getting to know our products.
Bid shopping is when a prime will obtain a quote from a potential sub prime, then find another company willing to undercut that bid; the result can be substandard workmanship.
Bid shopping is a decades old, unethical practice that works to undermine construction quality at the expense of the consumer and specialty subcontractors and, bottom line, may have long- term effects on safety.
John Fuqua, NECA member and Carol Electric Company chairman of the board, flew in from Los Alamitos, CA, to represent the electrical construction industry through his personal testimony regarding the damage Bid Shopping and Peddling can do to a subcontractor's business.
Bid shopping and peddling occurs when a general contractor, having been awarded a contract, attempts to maximize her/his own profit by "shopping" or threatening to shop a subcontractor's lowest bid around to others.
Thus, specialty contractors are lower on the food chain and suffer most from what we consider unethical bid shopping practices.
It's sometimes difficult for purchasers of construction services, and the general public, to understand why bid shopping is "fool's gold.
There are general contractors serving the public-sector market (where price alone determines contract award) who make bid shopping an art form.
Horschel detests bid shopping - a not illegal but certainly questionable practice - and refuses to participate.
The association emphasizes industry and legislative reforms on such issues as prompt payment, pay-if-paid clauses, retainage, lien rights, bid shopping, and unfair risk transfer through indemnity, additional insured requirements and waivers of subrogation.