Module 6 · Lesson 10
Why Contractor Bids Can Be So Different
Three bids, one project, $90K apart. The five reasons contractor bids diverge and how to tell a low price from a missing scope.
You send identical plans to three contractors. The bids come back: $150K, $195K, $240K. Nobody is necessarily lying — but the numbers aren't measuring the same thing. Here's what actually creates the spread.
1. Scope gaps. The biggest cause. One bid includes utility trenching, landscape repair, and appliances; another quietly excludes all three. The $150K bid plus its exclusions often becomes the $210K project. This is why lesson 6.8 taught you to hunt exclusions — bids are only comparable after you normalize what's in them.
2. Allowance games. Bids include "allowances" for finishes not yet chosen — $2,500 for flooring, $8,000 for cabinets. A low bid can be built out of fantasy allowances that no real product meets, guaranteeing change orders later. Compare allowance lines against real prices before comparing totals.
3. Different overhead, honestly different prices. An established company with an office, project managers, insurance, and warranty service costs more than two guys and a truck. Some of that premium buys real things: someone answers the phone in year two. The right choice depends on the project's complexity and your appetite for being the backup project manager.
4. Workload pricing. A busy contractor bids high — they don't need your job. A hungry one bids tight. Same skills, different month. This is why three bids beat one, and why the timing of your ask matters.
5. The comprehension gap. Some bidders studied your plans; some skimmed them. A bid that misses the hillside, the panel upgrade, or the soils report isn't cheaper — it's wrong, and you'll pay the difference in change orders after demolition, when leverage belongs to the contractor.
How to compare properly: build a line-item comparison sheet (scope, allowances, exclusions, timeline, payment schedule), normalize all three bids to the same scope, then compare. The cheapest normalized bid from a contractor who clearly understood the project — that's your real number. Module 11 turns this into a full checklist.
Key takeaways
- Bids differ mainly by scope gaps and allowance games, not by honesty or magic.
- Normalize bids to identical scope before comparing totals — exclusions are the fine print that matters.
- Unrealistic allowances are pre-planned change orders.
- The lowest number from someone who misread your project is the most expensive bid on the table.