The construction industry heavily relies on the bidding process when it comes to obtaining contracts for projects. If you own a construction company here in North Carolina that routinely bids on private contracts, then you already know this.
What you may not be aware of is that the bidding process differs, depending on whether you seek a public or private contract. If you want to expand your company into the public contract arena, then it may do you good to obtain some information regarding the process.
Public bidding requires more steps
The first thing you may notice is that the process involves more steps and a more formal tone. This is largely due to the requirements of government regulations. The basic steps in the process include the following but could vary slightly, depending on the circumstances:
- The government publishes an advertisement for bids.
- Contractors qualified by the government receive and review the relevant documents.
- Depending on the job, contractors may need to provide a non-refundable fee or deposit.
- Then the parties agree on a time to tour the proposed site and discuss the project.
- General contractors then obtain bids from suppliers and subcontractors.
- Once there is an estimate for all costs, contractors submit sealed bids.
- The government decides to either read the bids privately or announce them.
- The government then chooses the lowest, responsible bid to win the contract.
You should know that the government does not choose the lowest bid if it does not meet certain requirements. The bid must be reasonable and responsible. This requirement tends to eliminate bids that would end up costing more in the long run or that would jeopardize the safety of the project and the ultimate structure.
Participating in the public bidding process
As you can see, the public bidding process is not as “laid back” as the private one. That does not mean that the private process does not have rules — they are just not nearly as strict or formal. Private companies are free to shop around more than government entities. In addition, before your company can participate in the bidding process, it will need to be qualified by the government.
You may have heard from others that public contracts can be quite lucrative. If you want to find out for yourself, it may work best to include an experienced construction attorney in the process to help ensure that you don’t make critical errors in the process that could cost you an opportunity.