A Fair System Exists within the Construction Industry
Looking for a “fair bidding process” to emulate: look no further than the construction industry.
Usually, on major contracts, the closed tender process will be utilized.
That’s the “closed bid” system.
Owner / Architect
The Owner employs an Architect to come up with plans to construct a building. Once satisfied with the final revisions, the project will “go out to tender”.
Basically, that means the Architect will contact a number of construction companies and inquire whether they would like to bid on the contract. For government contracts, you may see these advertised in the newspaper.
Everything will be clear, everything will be “on paper”, everything will be “above board.
Right at the outset, each bidder is “valued”. Their contribution to the system is appreciated. They are treated with “kid gloves”. Why? If they felt mistreated, they wouldn’t come back. The entire system would fail. The next project would have no bidders. It’s ONLY because experienced contractors continue to participate that the system inherently works.
There’s “no” CHEATING. And, that’s very important.
Let’s look at some of the rules:
There’s a set date and time the tenders (bids) will be opened
The bids will all be delivered between 11:00 am and 11:59 am on a set day
Each bid must be enclosed in a sealed envelope
Each bidder is entitled to be present during the opening of the bids or have someone in their place present
Bids will be opened at 12:15 pm on that same day
The Architect will be in charge of the opening of the bids
The bids will be opened in the sequence in which they were submitted
As each bid is opened, it will be read out loud, identifying the name of the bidder and the price
Each submission will be circulated around the room to be viewed and examined by those present
At the conclusion of the session, the successful bidder will be announced by the Owner, a representative of the Owner or the Architect.
That’s it. It’s fair. It works in the construction industry. There’s no room for cheating.
Brian Madigan LL.B., Broker