Business Building: Low Bid Is A Race To The Bottom!

Words: George Hedley

Every contractor, subcontractor, builder, or engineer claims their quality and service outshine the competition. Yet, when the dust settles, what drives decisions to award contracts? Too often, it's just price. For many, simply believing you're better doesn't put more money in your pocket. So, will customers pay more for your work than your competitors'? Often, contractors who win work by only offering the lowest bid find themselves struggling to break even and feeling burned when the next job goes to whoever underbids them by a few dollars. If you want to escape the low-bidder trap, it's time to understand what customers truly value and how to package, present, and defend your worth.

Why Do You Keep Bidding Too Low?
Most construction contracts are awarded as lump-sum, where you're expected to meet minimum plans, specifications, and requirements. These jobs are often under tight deadlines and with narrow margins. When the competitive pressure rises, many estimators default to shaving their numbers, hoping price alone will win the job. But this strategy has a cost. Constantly underbidding just to keep crews busy starves your company of the resources needed to deliver the quality or service you're proud of. It reinforces a race to the bottom where no one wins.

Will Customers Really Pay for Quality? (Yes!)
Here's some good news: When I surveyed project owners, developers, and builders at the Construction Owners Association of America convention, a staggering 90% stated that quality and service mattered when selecting contractors. General contractors also prefer to hire better subcontractors who perform and offer more value and service. But customers won't pay for value they don't see. If you aren't explaining, showing, and proving your unique quality, service, or expertise, you'll keep getting lumped in with low bidders offering only the minimum.

Move Beyond Price - Sell What Matters To Your Customer
If you want to win jobs by being more than the lowest price, start by figuring out exactly what your customer values, and make sure you meet those needs better than anyone else. Ask questions before bidding. What's most important this time: schedule, safety, logistics, technical skill, or communication? Every client and job is different. Tailor your proposal. Spell out how your experience, detailed approach, or technical solutions will make their life easier, reduce risks, or achieve long-term goals. Address their top priorities, not just your price. Include real examples. Show photos, testimonials, safety records, bar charts, schedules, or case studies from similar projects where you solve specific problems.

Don't Hide Behind the Bid - Get Out and Sell
The best companies understand construction is a people business. Trusted relationships win jobs, keep clients, and help you fetch higher margins. But trust isn't built by sending your bids via email; it's earned through face-to-face work with customers. Meet your client, don't let your only presence be an emailed bid document. Schedule a meeting and do whatever it takes to present your proposal in person. Bring supporting materials: site photos, samples, alternative ideas, or a project schedule. Be visible and aggressive, only 1 in 10 subcontractors even bother to call after bid day to set up meetings or discuss their proposals in depth. Most finally call several weeks later to ask for the results, versus being proactive with follow-up. Invest time, take project managers or owners out for lunch, and visit their job sites or their office. Listen, ask questions, and offer suggestions that help them improve.

Who's Your Salesperson?
Winning work is about more than crunching numbers. The best estimators also act as salespeople, relationship builders, and problem solvers, not just price givers. Some estimators are not good salespeople, which leaves the company owner to do the important sales. Follow up, don't assume "no news is good news." After you've delivered your bid, follow up aggressively. Ask for feedback, clarify your added value, and address any concerns. Be a squeaky wheel, show up regularly during the bidding window, and not just after the bid date. Bring new ideas or point out ways you can add value or reduce client headaches.

Bottom Line - You Get What You Ask For
If you always bid the bare minimum and never highlight how you can deliver more, you'll keep getting chosen for the lowest-paying, riskiest projects. If you make the effort to understand and address what your customer cares about most, and prove you'll deliver on those priorities, you'll start winning profitable jobs, not just low-low-low priced work. Stop the race to the bottom. Position yourself as a problem solver and a partner, versus another low bidder. Contractors who win more work on the best projects are visible, build trust, address client pain points, and always present a compelling case for their value beyond just price. Remember, bids don't sell, people do (unless you are stupidly low)! Get out in front, tell your story, and set your sights higher. You can win more work if you do something about it!

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ABOUT THE AUTHOR
George Hedley CPBC is a certified professional construction business coach, consultant, and speaker, He shows contractors how to double their profits, grow, get organized, and turn their companies into BIZ-BUILDERS and Profit-Makers! He is the author of “Turn Your Construction Business Into A Profit-Making Machine!” available on Amazon.com. To talk, start a personalized coaching program, or get his free e-newsletter email GH@HardhatBizcoach.com. Visit his YouTube channel to watch his videos. To download online courses or get his contractor templates visit: https://constructionbusinesscoaching.com.

Business Building: Low Bid Is A Race To The Bottom!

About: Business Building

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