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The bidding process: government vs. private contracts

Real estate and commercial property contracts involve both private and public interests. This post will discuss the differences in the bidding process between a public and private contract. If you are a contractor that operates primarily with private companies and you are considering a bid for a government contract, you will want to modify your approach to ensure that you comply with all the prescribed rules. Conversely, if you are accustomed to working with government entities, you will want to relax your bid process because you are likely providing more information that necessary spending more money on the bid than your competitors.


The bidding process for public (government) contracts is exceedingly formal. Each entity you submit a bid to will be beholden to a different set of rules (i.e. local, state, and federal governments all operate under different regulations.) These rules are often complex and must be strictly adhered to or risk disqualification of your bid.

The bidding process for public contracts follows these steps. First, the government entity places an advertisement soliciting bids. Second, contractors who are qualified receive the procurement documents (which can require the submission of a deposit or non-refundable fee). Third, interest contractors attend a meeting reviewing the project requirements and tour the site. Fourth, contractors begin soliciting bids from subcontractors and suppliers (another perilous process fraught with legal issues). Sixth, contractors estimate their costs and submit sealed bids. Seventh, the bids are announced. Finally, the winning bids are chosen based on the cheapest, responsible bid. The responsible bid is the one in which all factors are adequately addressed. The responsible bid process eliminates bids that are too low because they are too optimistic or underestimate potential problems.

Is your company debating the efficacy of placing a bid on a contract? If yes, you may want to ask a lawyer to review the bidding procedures to make sure that company is complying with all prescribed rules. The last thing your bid needs is an unintentional violation that invalidates your bid, potentially wasting the money you spent preparing it.


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