Why does the world's largest industry- construction- operate on just a 1 and one and a half percent profit? The answer is that the contracting industry is being strangled by the outmoded pattern of jobs being awarded to the low bidder. The custom of awarding contracts to the low bidder was founded on a very sound principle. Years ago, areas in the United States were dominated by powerful people who reaped comfortable rewards from manipulation of contracts for public works projects. In more cases than not, public funds were wasted through the construction of facilities at exorbitant prices. What better way to change this than by opening competition and awarding contracts to the low bidder? Yet, today, awarding contracts to the low bidder is no longer sound! An official or owner who awards a contract today to a firm simply because it submitted the low bid is asking for trouble. You get exactly what you pay for- there are no miracle men. Materials, equipment and labor are priced the same for all. Owners should realize that a bidder who is more than 1 percent under the next bid will have to effect savings somewhere- and that will be at the owner's expense. So what is the answer? Just this: that it would benefit all concerned if every low bid were rejected and contracts awarded to the second lowest bidder. Think about this for a moment: it involves a much more professional approach- a bid which is neither too high nor too low. This will serve everybody far better. It will place the emphasis where it belongs- on competent work, completed on time, within the contract price.
Management
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