Bid Triangulation: How Owners, GCs, and SCs Each Benefit

Bids do not live on costs alone: While costs matter, they don’t tell the whole story. A systemized three-bid approach that expands the field of candidates reveals the gaps hiding in baseline quotes and the capabilities of bidding contractors.

For construction’s key players, three-bid triangulation tailors operational and cost-saving advantages to their needs. Owners maximize value, general contractors win jobs, and specialty contractors efficiently manage materials and vendor volatility.

What is 3-bid triangulation?

Three-bid triangulation is the process of choosing three bid options and then triangulating them for an in-context comparison of options that can generate insights beyond that of comparing two.

Bid triangulation helps widen the bidding lens, issuing IFBs, RFQs, or RFPs to multiple candidates for a robust batch of responses. Analyzed holistically, they flesh out the picture of market rate pricing and vendor capabilities. 

Bid management platforms can also help organize the growing roster of bids. Software lets issuers organize quotes, parse cost and scheduling details, and award bids based on efficiencies, scheduling, and risk mitigation as well as costs.

For owners, general contractors, and specialty contractors, expanding the bidding pool addresses their unique priorities and eases their special pain points.

Owners: Launching with Confidence

Project owners strive to maximize value while minimizing risk. The extra effort to gather multiple bids yields insights into real-world conditions. Transparency promises fair-market pricing and a full slate of competitive quotes to review. 

Three bids also allow budget validation. With multiple options on the table, owners can cross-check for alignment with general contractors’ and construction management cost models. Industry norms are upheld, for infusion into finely honed project budgets. 

Ample bids for comparison strengthen scope confirmation. Through bid leveling, elements that might be overpriced or absent are surfaced. The full design intent is captured, and anyone lowballing by omission is uncovered.

For public and institutional projects, multiple bids provide assurance that the process is conducted fairly and in line with procurement compliance and audit requirements. 

Finally, gathering at least three bids enables informed, strategic decisions about contingency plans, design revisions, and scope rebidding. Comparing multiple quotes reveals any gaps or flaws in the original plan — now made correctable in the early stages, before they balloon into costly change orders or schedule delays.

General Contractors: Building the Team

General contractors aim to win jobs competitively while protecting margins and minimizing risk. Safely walking that tightrope depends on a strong execution plan, crafted from a robust bidding process. 

Three bids allow further triangulation of cost and scope against internal estimates, confirming that they are in line with market rates or off the mark. 

Although low bids can send up red flags about the bidders’ capabilities, those that align with internal estimates deserve a second look.

In those cases, GCs can mitigate risk by seeking clarification from the low bidder or returning to the market for additional bids that could validate the low number while continuing to protect quality, costs, and schedules. 

With three bids, intentionally low bidders have nowhere to hide. GCs who carefully compare bids and find the underlying causes of low bids strengthen their execution plans by striking from consideration the subcontractors who are willing to sacrifice quality just to get the job.

Specialty Contractors: Staying on Schedule

Like GCs, specialty contractors scrutinize their collected bids for risk mitigation, coverage confidence, and duration. 

However, assembling costs from the ground up adds complexities. SCs rely heavily on second-tier subcontractors, vendors, and suppliers of materials, equipment, and rentals for the reams of data supporting their quotes. 

Opening the door to more bidders attracts more information, but bid management platforms help in compiling and analyzing all that data for direct and indirect comparisons and weighting of the elements. Digital bid forms account for the varied cost layers confronting SCs.

At this foundational level, market fluctuations, tariffs, and supply chain issues impose volatility on quotes and lead times. Multiple bids supply SCs with the choices needed to navigate uncertainty. They can lock in prices and early procurement schedules, keeping their vendors in alignment with the GC’s timelines.

SCs who depend on equipment rentals can apply bids from multiple rental companies to expand their options when supplies are limited or demand is driving prices higher. 

And for SCs that perform fabrication, multiple bids expand their powers of internal bid leveling, clarifying the feasibility and pricing of fabricating vs. buying, or pre-assembly vs. field installation.

SCs equipped to manage a sea of bidding data can confidently present GCs with the subcontractors or vendors best suited to the job and its timelines, beyond simplistic price comparisons. 

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Better Bidding, Better Building

Bidding lays the groundwork for everything that follows. Digitally powered, expansive strategies focus the process on convening the most capable teams possible.

Three-bid triangulation embeds itself into construction projects slated to deliver ROI for owners, risk mitigation for general contractors, management efficiencies for specialty contractors — and high-quality, on-budget, on-time projects for all.

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