Mismatched Construction Bids Trace to Scope Gaps, Not Contractor Markups, Architect Says

Commercial construction bids for the same project can vary so widely that they appear to describe different buildings, and the reasons behind those spreads carry lessons for Texas business owners preparing to build or renovate.

Mike Marden, a registered architect and licensed general contractor and founder of WDS, an integrated design-build firm, has observed the dynamic from both sides of the table for decades. He attributes the variation largely to project fit and the room for interpretation built into the bidding process, rather than contractors attempting to take advantage of owners.

The starting point is what contractors actually examine. When bids rest on a preliminary walkthrough instead of a finished, detailed set of plans, Marden says differing interpretations emerge before a single number is written down. What one contractor sees, hears and is told on a site visit can differ from the next contractor's experience, and that alone can begin the variation. Even with complete plans, bids can diverge based on how much time and attention a contractor plans to devote to supervision, management and overhead.

Omitted scope creates even larger gaps. Marden notes that some contractors review drawings or specifications without walking the job site. If two of five bidders skip that step, they are pricing a different project than the other three despite receiving identical paperwork. Special instructions, separate exhibits or desired exclusions missed by contractors who are not reading closely widen the spread further.

Owners often assume the lowest number is safest, but Marden says the real problem is usually that bids were never presented in a comparable format. He recommends asking bidders to break pricing into separate scopes so markups for overhead, insurance and taxes do not stay hidden inside a lump sum. For larger projects, he suggests separating a project into logical phases, such as interior work versus site work or landlord work versus tenant work, then breaking each trade out individually. Every bidder should detail supervision costs specifically, since Marden considers supervision one of the biggest drivers of price differences, ranging from a dedicated daily on-site quality control supervisor to occasional drive-by checks.

A bid that looks too good to be true often is, and Marden advises looking first at who submitted it. A one-line proposal assembled quickly warrants scrutiny, as does a contractor without experience on the specific project type; a company skilled at building houses is not automatically qualified to build a medical office or restaurant. Photographs on a contractor's website can indicate true experience, and a missing project schedule is a warning sign, since a contractor who has not accounted for the full duration of the job may not have built enough into the number to cover it.

The clearest prevention, Marden says, is setting terms before bids arrive: state the expected project duration or require each contractor to submit a timeline, and mandate a standardized, itemized form that separates insurance, taxes and overhead and profit from trade costs and project personnel and job site costs. For Texas owners navigating a competitive construction market, that discipline in the bidding stage can mean the difference between a comparable set of numbers and a costly surprise after the contract is signed.