In commercial construction, selecting the right contractor is one of the most critical decisions owners and project teams will make. Yet too often, contractor selection is driven by a single factor: price.
While cost matters, focusing on the lowest bid alone can lead to unintended consequences — including delays, change orders, quality issues, and strained relationships that end up costing far more than anticipated.
A more holistic approach is essential for capital projects, where complexity, operational impacts, and brand considerations come into play.
Why Lowest Price Isn’t Always Best Value
Unrealistic Bids Lead to Change Orders
Low bidders may exclude critical scope items, underprice trades, or make assumptions that don’t align with project realities. Once construction is underway, these gaps often become expensive change orders.
Compressed Schedules Are Risky
Contractors may offer aggressive schedules to win work, but if these aren’t realistic, they lead to delays, lost momentum, and operational disruptions down the line.
Inexperienced or Overstretched Teams
The lowest bidder may not allocate their most experienced personnel to the job or may be juggling too many projects. Execution suffers as a result.
Poor Fit for Client Needs
Not all contractors are suited for complex, multi-stakeholder, or program-driven environments. Selecting based on price alone may overlook whether a contractor truly understands and aligns with the project’s goals.
What to Look for Instead
Proven Relevant Experience
The right contractor should demonstrate success with projects of similar size, complexity, and operational requirements. Past performance is the best predictor of future results.
Collaborative Approach
Construction is a team sport. Seek contractors who communicate well, resolve issues proactively, and work collaboratively with owners, design teams, and agencies.
Predictability and Accountability
Look for a track record of on-time and on-budget delivery. Ask for references, review project histories, and dig into how the contractor manages schedule, budget, and risk.
Transparent and Complete Bidding
The best contractors are transparent about inclusions, exclusions, and assumptions — and don’t play games with numbers to win work.
Safety and Quality Culture
A contractor’s commitment to safety and quality directly impacts risk, reputation, and long-term value. These should never be compromised.
Asking the Right Questions
During the selection process, consider asking:
- Who will be the project team and what is their experience?
- How do you manage project schedules and mitigate delays?
- Can you provide references from similar clients and projects?
- How do you approach change management and communication?
- What systems do you use for reporting and project controls?
The answers to these questions will reveal far more about a contractor’s fit than the bottom-line number on a bid.
Conclusion
In construction, the lowest price rarely represents the best value. Projects are delivered by people, processes, and partnerships — not spreadsheets.
Owners who take a broader view during contractor selection are more likely to avoid surprises, minimize risk, and achieve the predictable, high-quality results that capital investments demand.
