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Bid Shopping in Construction Part 1

Although there are different project delivery methods in construction, every project, whether public or private, shares the same goals: building new structures on time, within budget, and in line with quality and performance requirements. Contractors get the vast majority of their jobs through bidding, which is typically learned on the job.

As Jacksonville construction lawyers, we know that there are many nuances to bidding and it is not always a straightforward process. Nevertheless, contractors must ensure they are participating in the procurement process with the highest level of integrity. This five-part article will discuss the bidding process, promissory estoppel, and the unethical practice of bid shopping. Read part two, part three, part four, and part five to learn more.

The Bidding Process

In the construction world, bidding is the main way in which general contractors get their jobs. General contractors will provide a potential customer with a proposal for a construction project. Since general contractors cannot perform all aspects of a job, they require the help of subcontractors to execute vital portions. Before submitting their proposal, they invite subcontractors to bid on the work they need to subcontract out. The bid that the subcontractor submits is considered a firm offer to the customer. The bidding process can be complicated, but the following activities are involved:

 

  • Bid solicitation from owner
  • General contractor seeks bids from subcontractors for parts of the project
  • Bids are then submitted by deadline
  • The owner reviews bids and selects bid winner
  • The contract is formed, laying the groundwork for the project.
  • Construction begins

Promissory Estoppel Explained

Before we get into what bid shopping is, let’s define promissory estoppel. The promissory estoppel was created to maintain the integrity of the bidding process. General contractors obtain bid pricing from several subcontractors and rely upon the submitted pricing for their proposal submission to secure a prime contract. Promissory estoppel is essentially a type of contract claim, although it is not a contract, it is a promise which involves consideration (a promise and consideration are both elements of a contract). Consideration is basically when something of value is given in exchange for an offer. The elements include a benefit given, the acknowledgement of that benefit, an acceptance of that benefit, and a required payment of that benefit. If you require legal assistance during the bidding process, please contact a Jacksonville contractor lawyer.

If you would like to speak with a Jacksonville construction lawyer, please contact us today.

Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.