Why the lowest number is often not the lowest bid
On bid day a general contractor may get three to six quotes per trade, each written differently. A drywall quote that’s $20,000 under the rest usually hasn’t found a smarter way to hang board. More often it has left out ceilings, insulation or cleanup, or said nothing about them. Award on the base number and the missing scope turns into a change order, a backcharge or a fight.
Leveling puts every bid on the same footing so the award goes to the bidder who is actually cheapest for the whole scope.
How the matrix works
- List the scope items that make up the package, from the plans and specs. Break out anything bidders commonly exclude.
- Set a plug for each item: what it would cost you to get that work done if a bidder leaves it out. Items every bidder includes can stay at $0.
- Mark each bidder’s coverage item by item: included, excluded or unclear.
- Enter each base bid, and whether it includes a bond.
For each bidder the tool adds:
- the plug for every excluded item, and for unclear items when Plug unclear items is on,
- a bond adjustment of your bond rate × (base bid + plugs) if the bid doesn’t include a bond.
Leveled total = base bid + plugs + bond adjustment. Bidders are ranked on the leveled total. The tool also shows the apparent low bidder (lowest base bid), the spread between high and low, and how far each bidder is over the low.
A worked example
A GC is buying the drywall and ceilings package for a retail tenant buildout. Three bids come in:
| Bidder | Base bid | Excluded or unclear | Bond |
|---|---|---|---|
| Bidder A | $212,000 | Ceilings excluded | Not included |
| Bidder B | $228,500 | Nothing | Included |
| Bidder C | $204,900 | Ceilings, insulation and cleanup excluded; fire-rated assemblies and blocking unclear | Not included |
On base bids, Bidder C looks $7,100 cheaper than A and $23,600 cheaper than B. The plugs are $18,500 for ceilings, $6,200 for insulation, $4,800 for fire-rated assemblies, $3,100 for blocking and $2,400 for cleanup. The bond rate is 1.5%.
| Bidder | Plugs | Bond adj. | Leveled total | Rank |
|---|---|---|---|---|
| Bidder B | $0 | $0 | $228,500 | 1 |
| Bidder A | $18,500 | $3,458 | $233,958 | 2 |
| Bidder C | $35,000 | $3,599 | $243,499 | 3 |
Bidder C, the apparent low bid, is actually the highest, 6.6% over Bidder B once its gaps are filled. Bidder B, which looked most expensive, is the true low bid.
Before you award, send Bidder A and Bidder C a list of the items you plugged and ask them to price or confirm each one. Leveling tells you what questions to ask.
Tips from the estimating side
- Write scope items the way the specs do. “Level 4 finish” and “fire caulking at rated walls” are easier to confirm than “finishing” and “caulking.”
- Watch for qualifications hidden in notes. Pricing valid for 15 days, material escalation clauses, or “per our standard terms” can matter as much as an excluded item. Record them in the bidder notes.
- Level alternates separately. Only add an alternate into the comparison if the owner is likely to accept it.
- Keep the sheet. A clean leveling record shows why you awarded to someone other than the lowest number, which protects you on public and owner-audited work.
Next steps
Once you’ve chosen a subcontractor, the plugs you didn’t need to use can go back into your contingency. If your company is on the other side of the table, the bid proposal builder and the inclusions and exclusions library help subcontractors write quotes that level cleanly and don’t get thrown out. For jobsite costs that aren’t in any sub’s quote, use the general conditions estimator.