11 reasons why negotiated bidding is better for your building project

Posted on 14. Dec, 2018 by in Blog

As business owners, educational institutions and worship centers consider expansion plans or constructing a new building, the general consensus is that they should collect competitive bids and see how to minimize their costs.

While that can work well for some it can be helpful to examine the contrarian viewpoint that competitive bids actually put projects at a disadvantage when compared to negotiated contracts with a design/build firm.

Here’s why at Kalleward, as a complete construction management, general contracting, business development, design/build firm working in Southwest Michigan since 1963, we hold that belief.

The design/build approach takes the place of awarding separate contracts for each phase of the job, aligning the interests of the entire team working on the project. The owner, the contractor and the architect/engineer work together on the project creating a sense of teamwork instead of pointing fingers at each other along the way. Instead, the focus of everyone involved is on solving problems.

Let’s examine 11 reasons to opt for negotiating a contract and why it is better for your building project.

Less risk for the owner: Competitive bidding often brings corner-cutting and companies that are not well suited for the job. Negotiating allows owners to line up reputable and trusted partners.

Less risk for the contractor: Given the big picture, contractors are less likely to face work order changes or divisive views on how to do the work.

Team relationship: With negotiated contracts everyone working the project is on the same page and has a sense of teamwork. Expectations are known and understood by all involved from the beginning.

Emphasis on quality: Negotiating a contract helps to keep the focus on the best overall work for the long-term. Competitive bidding often sets the stage for low-cost, subpar performance as companies try to hold to the predetermined number.

Change orders cost less: In competitive bidding, changes force contractors to alter elements of the job that they are not prepared for. Negotiated bidding allows for more flexibility.

Contractor involvement: Design and build with negotiated contracts brings more involvement in the planning and viability. Bidding brings an after-the-fact approach to figuring out how the work will unfold.

Accurate estimating: Negotiations allow more precise estimates while competitive project solicitations are more prone to lead to cost overruns.

Track record counts: Owners choose contractors on the basis of past project performance whereas bidding creates uncertainty on the ability of who will perform the work.

Price is not the sole factor: Low-bidding can be problematic because owners can’t assess what else is on the contractors’ plate. Negotiated projects reveal workload constraints as well as considers experience, creativity and on-time completion.

Kalleward’s history of success on construction projects for private business, public universities, community arts organizations and centers of worship should provide confidence in our team’s skills. We want to learn about your vision, your goals and turn them into reality.

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