What is Bid Peddling?

Bid peddling refers to an unethical practice occurring in the construction bidding process where a subcontractor offers to lower their price after a contract has been awarded to another subcontractor. This can create an unfair competitive advantage and disrupt the integrity of the bidding process, as it encourages bidding wars instead of fostering transparent and fair negotiations from the outset.

The primary concern with bid peddling is that it can undermine established relationships between contractors and their chosen subcontractors, leading to unpredictability in costs and project timelines. It can also encourage subcontractors to submit artificially low bids to win contracts initially, knowing they can negotiate downward after the award, which can lead to issues with quality and reliability.

In contrast, ethical bidding practices adhere to principles of fairness and transparency, collaboration among subcontractors aims for mutual benefit and often involves legitimate communication and shared project goals, and methods of estimating project costs focus on accurate assessments prior to bidding rather than post-award negotiations. Understanding these distinctions is critical for contractors and subcontractors in maintaining professional integrity within the industry.