The Hidden Costs of the “Low Bid”

So, you are thinking of an outdoor patio project, and you have interviewed a couple of hardscape contractors. You have received a few proposals and now it is time to evaluate.

Why are some prices so low?

Your process is underway, you receive back several bids, including one that is irresistibly low – maybe even 50 percent less than the highest bid. At first, this may seem like a stroke of good fortune, after all, there are a lot of places that extra money could be allocated to, but is it a windfall, or a trap? With few exceptions, there are real concerns when going cheap. In fact, choosing the cheapest option might cost the most in the long run.

What are the additional costs a homeowner may incur by choosing the lowest bid?

It is not always a bad sign when a contractor puts in a low bid, but if it’s much lower than other bids, then consider it a red flag. In general, homeowners should expect a 5, even 10 percent variation between qualified and experienced hardscape contractors, and anything outside of this range is likely cause for concern.

But why exactly is it a concern? Why should Homeowners avoid a particularly low bid?

There are many reasons a bid might be especially low. In general, the only time an exceptionally low bid is acceptable is if the contractor is new to the industry or new to the area, and they need to build up clientele. While this can prove to be advantageous to a company, it can also represent its own risk, as without an established track record, a client cannot predict how the contractor will perform, especially long-term. And does this "new to the area" contractor understand our soil conditions? Installing a paver or masonry base in clay soil is completely different then when in sandy soils.

And there are many more things to be wary of when accepting a low bid. For example:

• The hardscape contractor may be offering inferior products. There are a lot of pavers on the market, and some manufacturers wear better over time than others. Once installed, inferior pavers will wear quicker, requiring an expensive replacement before long. Companies like EP Henry, Techo Bloc, Belgard, and CST are top notch paver manufacturers that have a history of making great products. CKC Landscaping is certified installers of all these major manufacturers and we even have some of our work featured in their catalogs!
• The low bid contractor eliminating proper standards. Does the low bid include a proper paver base, using the proper material, and installed to the proper depth? How are they compacting the base? Are they using woven geotextile fabric? If not, your low bid contractor is setting your project up to fail.
• The low bid contractor is counting on upcharges with needed portions of your project. Is this low bid contractor willing to sign the estimate and make it a written contract?
• The contractor may offer no post-installation support. It may seem like an expendable cost, getting rid of post-installation support, but this is a big risk for a homeowner to take. How long is the work warranted? Will they come back if there is a problem?
• The contractor has vastly underestimated materials or labor costs. This is a common one, as many contractors do not take the time to thoroughly consider what is involved prior to a project. This can lead to a rising cost in the project after the low bid contractor has started.

A new outdoor living space is a significant investment for any homeowner, so a low bid isn’t always the right choice. By taking the time to properly consider all bids, you will ensure an outdoor space that will last through time.

For more resources, check our Outdoor Living Spaces and click here to schedule your free consultation today.