You Hired the Cheapest Bid. Congratulations. Here's What Happens Next.
You Hired the Cheapest Bid. Congratulations. Here's What Happens Next.
You did everything right. You got three bids, maybe four. You compared them side by side. The lowest one came in $180,000 under the next closest. You asked about it, and they said they run lean — no fluff, experienced crew. You thought about it for a week. Your business partner thought about it for a week. And then you signed.
This is the part of the story where you think you made a smart business decision. For the next few weeks, you probably still think that.
Here's what actually happens next.
Phase One: Everything Looks Fine
The job site is active. Workers show up. Framing goes up fast. You drive by and feel good about it. Maybe you feel vindicated — same quality, lower price, exactly what everyone said couldn't be done. The contractor is responsive. Updates come in. This is going great.
Then the RFIs start.
RFI stands for Request for Information. In a legitimate project, they're a normal part of construction — clarifications on details, coordination questions between trades. But when they start coming in volume, you're about to learn what the low bid actually bought you.
Phase Two: The Scope Gaps Reveal Themselves
The first change order is small. $3,800 for electrical runs that weren't in the original drawings. You pay it. What are you going to do, shut the job down?
The second one is bigger. The framing is always the same: "We priced off the preliminary plans. These are the construction documents." You go back and look at your contract. There's language in there you didn't focus on when you signed it. Words like "allowances" and "as specified" and "per plans dated."
What gets repriced at this stage depends on your vertical. For a veterinary clinic, it's kennel drainage, surgical suite ventilation, anesthesia gas scavenging. For a medical practice, it's the three-phase power your imaging equipment requires, or the reinforced floor loading your MRI needs. For a daycare, it's the commercial kitchen exhaust, the egress configurations your licensing requires, the outdoor drainage that wasn't on anyone's drawings. For light industrial, it's the dock levelers, the overhead clearances, the power service the previous tenant didn't need. Every specialty facility has infrastructure requirements that a cheap bid tends to underspecify — and that you get to fund through change orders once you can't say no.
By change order four, you've added $75,000 to the contract. By change order seven, you're at $130,000 over. And you're not done.
The schedule slips two weeks. Then four. The contractor tells you it's supply chain issues, which is partially true and mostly a cover for the fact that they underbid the job and are now managing cash flow by slowing your project while they chase faster money elsewhere. Your equipment vendor is waiting. Your lease at the old location isn't extending. You're doing math you never wanted to do.
This pattern doesn't care what kind of facility you're building. It plays out in vet clinics, medical practices, daycares, dental offices, and light industrial builds. The operator changes. The story doesn't.
Phase Three: The Calls Stop Getting Returned
This is where it gets genuinely painful. The project manager who was responsive in weeks one through six starts taking longer to reply. You show up at the job site and the crew is smaller than it was. A subcontractor mentions — casually, like you already know — that they haven't been paid in three weeks.
You didn't know that. You've been paying the GC on schedule.
What you're now in is a cash flow crisis that isn't yours but that you're going to feel entirely. The general contractor bid the job too low to make money, has been trying to recover through change orders, is now stretched across too many projects, and yours is the one getting starved. This happens more than anyone in the industry likes to admit.
You hire a lawyer. You send a formal notice. The contractor comes back to the table, barely. The project gets finished — eventually — three months late, with punchlist items that never quite get resolved because by the time you get to that conversation, everyone is exhausted and the relationship is destroyed.
Meanwhile, a veterinarian across town who took the second-lowest bid from a firm that's actually built specialty facilities before is three weeks open and booking out two months.
The Final Math
Here's what the numbers actually look like when it's over.
The low bid was $800,000. After change orders, the final contract is $960,000. You extended your lease at the old location for four months at $7,500 a month — $30,000 you hadn't budgeted. You lost an estimated $55,000 in revenue from delayed capacity. You spent $15,000 in legal fees navigating the dispute. Total real cost: somewhere north of $1,060,000.
The second-lowest bid was $990,000. Fixed scope, fixed price, experienced team that has built this type of facility before. The project you didn't take.
The cheapest bid was not the cheapest project. It was never going to be.
What Fixed Pricing Actually Means
When a builder comes to you with a fixed-price contract, they're telling you something important: they've done this enough times to know what it actually costs. They're not buying the job with a low number hoping to make it up in change orders. They've priced the mechanical, the electrical, the specialized infrastructure your facility type requires — all of it — and they're standing behind that number.
The specific infrastructure matters. A veterinary clinic's plumbing and ventilation requirements are nothing like a daycare's. A dental office's operatory-level electrical is nothing like a light industrial tenant build-out. A firm that has built hundreds of projects across multiple verticals knows where the cost is buried in each one. A low-bid generalist does not — or does, and prices it out of scope intentionally.
At Primus, pricing discipline is not a marketing line. You cannot build a functional relationship with a client on a contract designed to extract money through scope gaps. We work to make scope, assumptions, and change decisions visible up front.
Scope gaps are not an inevitability of construction. They're a symptom of a contract that was never designed to protect you.
If you're evaluating bids right now and want to understand what a legitimate scope-of-work conversation looks like, reach out at primus-companies.com.
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Start a ConversationJason Drewelow
Principal, Primus Companies
Jason leads Primus Companies, a commercial construction company rooted in Cedar Rapids since 1973.
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