A low bid is not a low price
Three electrical bids arrive: $74,200, $88,400 and $96,300. The instinct is to award the $74,200. Then you read the exclusions — no fire alarm, no temporary power, no gear procurement, no bonding. Add those back and the cheapest bid is the most expensive number on the page.
Bid leveling is the discipline of comparing bids on identical scope. The comparison in this tool adds two things to every base bid: the value of the work the bidder excluded (the scope gap) and any leveling adjustment for differences in what is included. Only then is the comparison meaningful.
Leveled total = Base bid + Scope gap value + Leveling adjustment
Deviation = Leveled total − Mean of compliant leveled totalsQuantifying what the bid left out
Every exclusion in a subcontract bid is a future change order. The scope checklist tab turns those exclusions into a dollar figure by examining the items that most commonly move between bidders.
| Item | Typical value | Why it gets excluded |
|---|---|---|
| Temporary power | 1–3% of trade value | Assumed to be the GC’s scope |
| Fire alarm | 3–8% of electrical value | Often a separate low-voltage package |
| Permit fees | 0.5–2% | Unclear whether GC or sub pulls permits |
| Gear procurement | 10–25% of electrical | Lead time and payment terms risk |
| Testing & commissioning | 1–3% | Deferred to the owner’s agent |
| Bonding | 1–3% | Often required only above a contract threshold |
| Final clean & disposal | 0.5–2% | Everyone assumes someone else |
Outliers: standard deviation as a risk signal
When bids cluster and one sits more than a standard deviation from the mean, something is different: a missed scope item, a price taken from the wrong project, or a bidder who is not serious. None of those are good news, and all of them are invisible if you look only at the low number.
Awarding to an outlier without a written clarification is how subcontractors go out of business mid-project — and how general contractors inherit the problem. The template flags outliers automatically and provides a field for the clarification you obtained.
- Flag anything beyond one standard deviation and require a written scope confirmation.
- A bid on the high side may simply reflect a fuller scope — check the gaps before discounting it.
- A bid on the low side may reflect nothing included — check the same thing.
- With only three bidders, standard deviation is rough. Five bids or more makes the signal much more reliable.
Documenting the award
Most public work, and a growing share of private work, requires you to demonstrate that award decisions were consistent and documented. Even where it is not required, a written rationale protects you when the low bidder asks why they lost.
The justification tab scores each compliant bidder on leveled price and schedule, then records the reason for the outcome. That single page is frequently the difference between a claim being dismissed and a claim being negotiated — because it shows that the decision was made on a defined, applied-in-advance basis.
- Confirm scope in writing with the recommended bidder before issuing a subcontract.
- Require a schedule of values before mobilisation — it becomes your payment control.
- Check insurance certificates and bond capacity before award, not after.
- Keep the losing bidders informed; a well-run buyout gets better bids next time.
How to use this tool
- Enter every bid exactly as received. Base bid, exclusions, bonding status, schedule and any qualifications. Do not adjust anything yet.
- Quantify the scope gaps. Use the scope checklist to price what each bidder excluded. This is the number that changes the ranking.
- Read the mean, median and standard deviation. Compare each leveled total to the mean. Anything beyond one standard deviation needs a written clarification before award.
- Download and document the decision. The workbook scores compliant bidders on leveled price and schedule, and produces a selection justification page you can file.
What is inside the download
A leveling matrix that adds scope gaps and adjustments to each base bid before comparing, a scope checklist that surfaces what each bidder excluded, and a weighted selection sheet that documents why you awarded the way you did.
Bid Leveling Matrix— a separate worksheet inbid-comparison-matrix.xlsx.Trade Scope Checklist— a separate worksheet inbid-comparison-matrix.xlsx.Selection Justification— a separate worksheet inbid-comparison-matrix.xlsx.