Are low bids always too good to be true?

The Price of Illusion: Are the Cheapest Bids the Best Option in Construction in Ecuador?

In the competitive world of construction in Ecuador, the temptation to opt for the lowest bid is undeniable. However, is it really the best decision? This article explores the hidden risks behind seemingly irresistible offers and how a hasty choice can turn into a headache for construction projects, public procurement, PPPs, and more.

The Mirage of Savings:

Imagine a commission evaluating bids. One stands out for being significantly lower. While one celebrates the potential savings, another warns about quality. The third, wisely, delves into the analysis: Were there calculation errors? Was the complexity underestimated? Or is there a legitimate cost-saving strategy?

The Coastal Works Case:

A civil engineering contractor, accustomed to dry land, submitted the lowest bid for a coastal protection project, ignoring the challenging maritime conditions. The result: delays, losses, and unfounded claims to the buyer.

The Importance of Review:

Increasingly, bidders are turning to internal committees to review bids before submitting them. This practice, along with collaboration between estimators and builders, minimizes the risk of "getting burned."

The Underestimation Trap:

Some contractors deliberately underestimate to win, planning to recover costs through claims. For buyers, it is crucial to analyze low bids in detail and clarify doubts with bidders before deciding.

Conclusion:

In construction in Ecuador, the cheapest bid is not always the best option. When evaluating proposals, consider the bidder's experience, their understanding of the project, and the soundness of their offer. Remember, the success of your project depends on informed decisions, not tempting shortcuts.

About Fractal - Ingenieros & Abogados

Fractal—Ingenieros & Abogados is a boutique firm that specializes in Project Management and Construction Law. It is focused exclusively on the Construction Industry.Our comprehensive services include independent consultancy and advice on claims, contracts, risks, integrity, and project control. We cater to various clients, including law firms, claims consultants, commercial and multilateral banks, fiduciary and insurance companies, arbitration and adjudication courts, dispute boards, project owners, equipment and materials suppliers, national and foreign investors, and engineering and construction companies.