bid shopping


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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.
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.
federal government, a contractor, or a subcontractor from engaging in the practice of bid shopping; (2) provide for the contracting officer to terminate a contract or impose liquidated damages upon determination that bid shopping has occurred; and (3) provide that a contractor or subcontractor who has been subject to the imposition of liquidated damages with respect to two contracts within a five-year period wi ll be deemed to lack integrity and business ethics within the meaning of Federal Acquisition Regulation (FAR) Part 9.
Barriers to fair competition include exclusion from private subcontracting opportunities, resistance by prime contractors to working with minorities and resulting bid shopping, discrimination in obtaining surety bonds, and discrimination by suppliers who give special prices to non-minority firms.
Bid shopping refers to the practice of contractors pressuring subcontractors, after the award of a contract, to submit a lower bid without passing the savings onto the government.