Home & Garden Columns

About the House: Choosing Among Three Contractor Bids

By Matt Cantor
Friday December 01, 2006

My friend Lisa seems to be the Maven Plus Grande de Berkeley. Everybody’s query-girl (although she’s happily married to a fella). She even gets calls about contractors, which she confesses isn’t exactly her area of greatest expertise. So we’re hanging out and she plays me a message from her friend (We’ll call her Mildred) and it goes something like this: 

“Lisa, I’ve had three bids for contractors and I just can’t decide on which one to take. I told them each that I was getting bids from the others and they seem to be in a bidding war now. What should I do now?” Beeeeep. 

Turns out this is all about hiring someone to install a furnace. So what could go wrong here? First, competitive bidding is all well and good but as I am so often heard to say “You get what you pay for….if you’re lucky.” Low bids are, all too often, followed by low quality. Now this isn’t true 100 percent of the time but it is definitely a principle that’s worth observing since it’s true much of the time. Also, the lower you drive your contractor, the less eager they’re going to be to try to do their best work. Like all of us, they’re going to see the dollars on the table, look at their time and sweat and try to minimize their losses. Of course, there ARE other principles are work here. 

One is the principle that I’ll call “Inherent Programming Rarely Fails” or Bunnies usually hop and rarely slither. Obsessive-compulsive, perfectionist tradespersons don’t do sloppy work just because the pay is lousy. They tend to work the way they feel internally driven to work. Also, slobs have trouble cleaning up, no matter how much you pay them. You may have noticed that this principle expresses itself in our relationships. No matter how much you cajole, wheedle or beg, you partner is probably going to continue to engage in that annoying behavior that drives you batty for ever and ever. Smoker’s get diagnoses of lung cancer and go right on smoking. Go figure. 

But, and this is a big one, the really talented person, probably won’t do your job when you start trying to get them for cheap or start getting everyone involved in this bidding war. They’ll just walk away seeking “greener” pastures because they know (or believe) they’re worth it. Now the contractor who works fast and loose and leaves messes behind will take what they can get and will try to suck up every job they can. This person will play bidding war with you and guess who losses. Right. You do. You just drove off the one person you want to have do the job and invited all the bottom feeders to your party. 

The person who seeks out the low bidder in this fashion is usually the same person who will try to get the incompetent contractor to come back and fix the work they screwed up. 

Now why would you want to hire (or even accept work for free) from a person who’s already demonstrated for you in graphic terms that they are incapable of doing something properly. You also have to assume, unless you’re an expert in the relevant trade, that you don’t even know the full depths of their undesirability. For every item that you were able to discern as screwed up, there were probably a handful of others that you know nothing about. But I digress. 

Bidding on work should rightly involve more than just an evaluation of costs. In fact, it should be pretty low on the list. If you get three really good furnace installers to bid on the same furnace and everyone agrees on the methods to be used (which they’re more likely to do anyway since you’ve picked very knowledgeable people), the cost difference between the three isn’t likely to vary by more than 10 percent or 20 percent, may be $1,000. Now I realize that money doesn’t grow on trees (although it Xeroxes pretty well!) but that sum gets to looking really good when you’ve just spent your bargain fee and discovered that something about it was botched and you have to figure out how to gain restitution or, more importantly, to get the thing done properly. Paying to do a job twice is really expensive and paying a little extra to do it once with confidence is a bargain.  

Also, the more expensive contractor almost always has some perks in his/her work that you won’t see in the low bid. When I compare the work and think about the hours involved, the higher bid usually ends up looking as though that contractor made less per hour than the “cheap” fellow/gal. No joke. I see this a lot. The better and higher priced person has figured out what has to be done, has streamlined the process and also wants to prevent call-backs that cost money, hurt their reputation and violate their inherent programming.  

Now, it’s true and I hate to say it but from time to time, you will find a really capable individual who will be cheap. I’ve met ‘em, I’ve hired ‘em and I’ve tried to find them 6 months later only to find that they were either out of business (because they couldn’t make it pay) or they had taken a job with someone else. Also some stick it out, raise their prices and become higher end tradespersons. But in almost no case does this person stay cheap and whey should they. After a little while they get to know who the competition is, what that work looks like and how they rank in the pecking order. If you knew that your peer group was charging, on average, twice what you were getting, wouldn’t you raise your rates. Of course you would. 

So back to Mildred and here dilemma. I have to confess to a certain lack of compassion for this person’s situation. Sorry. I’m not very nice. Maybe too many years in the trades. I feel as though this bidding process corrupts everyone. Now don’t get me wrong. I’m not opposed to getting several bids on a single job. Actually, I think it’s a good thing, although I feel that the players should know what the playing field looks like and should thus be informed that they’re being asked to be the 12th bidder on the furnace. 

They might want to turn it down and it’s their right to do so if they wish. I do think that you should take each bid on its own merits and not try to wrestle them to the ground by getting them to compete with the bids from other. For one thing, you may be asking a person who does A+ work to compete with a price from a C- contractor. You might just drive them away but you might also get them to lower their quality. It’s good to demand quality and good performance but it’s also good to pay for it.  

When we engage in this cheapening process repeatedly, we lower the quality of all work being done and this is exactly what has happened over the past 50 years. People say “ You just can’t get good help these day” and it’s our own damned fault. We’ve set it up this way and it’s an all McDonalds world now. Lisa say to get three bids and take the middle one. Well, I’m not sure I would always agree but it’s interesting that this is well known as the European model. In the U.S. the model is to get three bids and take the low one. The think is, so much poor quality work is done today that I don’t think that our middle bid is the same as the Italian middle bid.  

Whether you take the top bid or the middle bid (or even the low bid when appropriate), I suggest that you take a good look at the individual. Get reference and call them. Go visit them for heaven’s sake. What’s two hours compared with having a lousy contracting experience? 

Pick someone for their savvy, their chemistry with you and their being “right sized” (a two-person crew might be more right for you than a 30 person crew). Pick someone you’re willing to give a key to your home to. Someone you’d trust your kids with and someone you’ll want to know when it’s all over. If you’ve done all that with three people and you like them all I don’t care who’s the cheapest (and I’ll bet you won’t either!). 



Got a question about home repairs and inspections? Send them to Matt Cantor at mgcantor@pacbell.net.