Qualifying Your Bid

Kegler Brown Construction Newsletter

Increasingly private owners are inflicting terribly one-sided contracts upon contractors who then force subcontracts with language at least as one-sided or worse upon their subcontractors. Unfortunately none of the parties typically discuss the nature of the contract to be agreed upon until after there is an agreement upon scope of work and price. At that point, it is increasingly difficult to withdraw because of inequitable contract language, and this often leads to contentious relationships at the very start of a project.

One way to avoid this unpleasant experience "after the fact" is for a subcontractor or contractor to condition his bid upon acceptable contract language. Of course, this does not work for contractors in a competitively bid situation requiring a "responsive" bid upon precise contract documents.

These conditional bids are particularly crucial for subcontractors who are otherwise bound to their bids, when relied upon by the successful contractor who is awarded the job, even if faced with inequitable subcontract language later. A subcontractor who conditions his bid (upon the AGC/ASC/ASA model subcontract, or AIA 401 subcontract or acceptable subcontract language, for example) can force a general contractor to decide up front whether to use that sub or not based upon not only the price but also the risk assumed in any contract.

If the general contractor elects to use the subcontractor's qualified bid, he will not be able to force unacceptable one-sided subcontract language upon the subcontractor later.

Subcontractors and general contractors are encouraged to consider and review closely any qualifications to bids in an effort to avoid the "contract hassle" later.