Bid Analysis

Bid analysis systematically evaluates submitted bids to identify the lowest responsive and responsible bidder, verify bid accuracy, normalize differing assumptions, and assess contractor qualifications. This comprehensive review protects owners from accepting flawed bids, ensures fair competition, and supports informed award decisions.

Bid Tabulation and Comparison

Bid tabulation organizes all received bids into comparative format showing base bid amounts, alternate item pricing, unit costs, and total evaluated prices. The tabulation matrix allows direct comparison across bidders:

Tabulation identifies apparent low bidder while highlighting significant price variations requiring investigation.

Mathematical Verification

Verify mathematical accuracy of bid calculations including addition, multiplication, unit price extensions, and alternate adjustments. Common errors include:

• Addition errors in summing line items
• Incorrect unit price quantity extensions
• Transposition errors in transferring amounts
• Missing decimal points creating order-of-magnitude mistakes

Material mathematical errors may render bids non-responsive. Minor errors allow correction or bidder withdrawal depending on jurisdiction requirements.

Bid Leveling and Normalization

Bid leveling creates equivalent comparison when bidders include differing assumptions, exclusions, or qualifications. The analysis process adds costs for excluded items or adjusts for non-compliant products, establishing true comparative values. Leveling addresses:

• Scope items excluded by some bidders but included by others
• Material or equipment substitutions from specified products
• Differing warranty periods or extended coverage
• Varying escalation assumptions or fixed-price periods
• Allowance amounts differing from specified values

Leveled bid amounts may differ substantially from nominal bid prices when significant exclusions or substitutions exist.

Alternate Pricing Evaluation

Evaluate alternate bid items against budget availability and owner priorities. Calculate total evaluated price combining base bid with accepted alternates. Consider:

• Budget capacity for additive alternates
• Value received for additional cost
• Life-cycle cost implications of alternates
• Schedule impacts of alternate selections
• Compatibility with project goals and standards

Select alternates optimizing value within available budget rather than accepting all additives or rejecting all deductives arbitrarily.

Unit Price Evaluation

Analyze unit prices for reasonableness and potential unbalanced bidding. Compare unit prices across bidders and against historical data:

• Unusually high unit prices may indicate errors or limited competition
• Abnormally low units suggest inadequate estimating or loss-leader bidding
• Widely varying prices across bidders warrant investigation
• Unit price imbalance where certain items are inflated while others are reduced

Unbalanced bidding manipulates unit prices to front-load payments or exploit anticipated quantity variations.

Allowance Verification

Confirm bidders included specified allowance amounts without modification. Some bidders may adjust allowances based on preliminary pricing knowledge, creating non-responsive bids.

Scope Gap Analysis

Identify work elements not addressed by any bidder, suggesting scope ambiguities or undefined responsibilities. Scope gaps require resolution before award through:

• Clarification of contractor responsibility
• Additive change orders at contract execution
• Owner direct procurement of gapped items

Subcontractor Listing Review

Review listed major subcontractors for:

• Compliance with prequalification requirements
• Proper licensing and certification
• Financial stability and bonding capacity
• Relevant experience and qualifications
• Reasonable subcontractor pricing

Questionable subcontractor listings may indicate insufficient due diligence or bidder qualification concerns.

Qualification Verification

Verify apparent low bidder meets qualification requirements:

• Current and valid contractor licenses
• Insurance certificate compliance with required limits
• Bonding capacity adequate for contract value
• Financial capacity demonstrated through statements
• Relevant HVAC experience on similar projects

Reference Checking

Contact provided references verifying contractor performance claims regarding quality, schedule adherence, coordination, safety, and owner satisfaction.

Financial Capacity Review

Examine contractor financial statements assessing liquidity, working capital, debt levels, profitability, and overall financial health. Financial distress signals may disqualify otherwise low bidders.

Bonding Capacity Verification

Confirm bidder can obtain required performance and payment bonds. Contact surety companies verifying bonding availability and contractor’s existing bond commitments.

Best Practices

Conduct bid analysis methodically using standardized evaluation criteria and documentation. Inconsistent analysis invites bid protests challenging award decisions.

Document all analysis findings, leveling adjustments, and qualification determinations creating defensible award recommendations.

Compare bids against independent cost estimates identifying outliers requiring investigation. Bids substantially below estimates suggest scope misunderstanding or unsustainable pricing.

Conduct post-bid interviews with low bidders clarifying assumptions, verifying scope understanding, and assessing technical competence.