The Controversy around Unbalanced Bidding in Construction: Seeking a Fair Balance

AbstractUnbalanced bidding continues to be a controversial issue in the literature as well as in actual competitive bidding practices. Although a considerable amount of the past research advocated unbalanced bidding and viewed it as a legitimate bidding strategy, public bidding regulations discourage this practice and may disqualify unbalanced bids as nonresponsive offers. In an attempt to ease the controversy and present for the first time a balanced perspective on unbalanced bidding, this paper examines the two conflicting perspectives and conducts a review of the literature reflecting the owners’ and the contractors’ perspectives and an analysis of the conflicting impacts of bid unbalancing on the owner and the contractor. The root causes of disagreement around this practice are discussed and criteria are suggested that draw a line between acceptable and unacceptable bid unbalancing. The proposed criteria seek equitable risk-sharing between owners and contractors and are expected to minimize the ambigu...