Why Some Bids Are Designed to Be Wrong
Why Some Bids Are Designed to Be Wrong
Change orders are a normal part of commercial construction. But for some contractors, they’re not a correction. They’re the business model. Here’s how to tell the difference before you sign the contract, not after.
Three bids come in. One is noticeably lower than the other two. The owner is relieved. The budget works. Everyone signs.
Six weeks into the job, the change orders start. A few thousand here for “unforeseen conditions.” A few thousand there because the allowance for flooring didn’t cover what the owner actually picked. By the time the building opens, the low bidder isn’t the low bidder anymore. Sometimes they’re not even close.
Nobody committed fraud. Nothing on the contract was technically false. And that’s exactly what makes this hard to catch. The gap between the number you signed and the number you paid didn’t come from one bad decision. It came from dozens of small ones, each defensible on its own, that all happened to move in the same direction.
We’ve competed against this bid for 25 years. We’ve also lost to it, more than once, because on paper it looked like the better deal. So it’s worth talking about plainly: not every low bid is a good bid, and not every change order is a legitimate surprise.
📌 A bid that’s noticeably lower than the others isn’t always a better deal. Sometimes it’s just an incomplete one, priced to look complete.
Change orders aren’t the problem
Let’s be clear about something first. Change orders exist for real reasons, and a project with zero change orders is rare and not necessarily a good sign. Ground conditions surprise everyone sometimes. An owner sees the framed space and decides the layout needs to shift. A brand updates its spec mid-project. Municipalities add requirements nobody could have predicted from the permit set.
A contractor who builds in some flexibility for the unknown, and prices change orders fairly when they happen, is doing the job right. That’s not what this is about.
How the model actually works
The version worth watching looks different. It starts with a bid that’s thin where it should be specific. Scope lines that say “flooring allowance: $/sq ft” without naming a product, when everyone in the room knows the owner’s brand standard calls for something with a higher price. Exclusions that don’t get mentioned until the invoice does. A number for site work based on soil conditions nobody actually tested.
None of this shows up as a lie. It shows up as optimism, or as a gap that “will get sorted out during construction.” And it will get sorted out. At a price that was never really in competition, because by the time it comes up, the owner already has a signed contract, a lease clock running, and no appetite to remobilize a new contractor over a flooring allowance.
That’s the mechanism. Win the job on the number that gets compared. Make the actual margin on the number that doesn’t.
What to look for before you sign
The tell is almost never in the total. It’s in the detail underneath it, or the lack of one.
Ask what’s excluded, not just what’s included. A complete bid names its exclusions as clearly as its scope. A bid that only tells you what’s in, and stays quiet about what’s out, is leaving room.
Ask where allowances came from. An allowance tied to an actual quote from an actual supplier is a real number. An allowance that’s just “what these usually run” is a placeholder, and placeholders have a way of running short.
Ask for unit pricing on the changes that are likely, not just possible. Most commercial buildouts have a handful of predictable friction points: unknown ceiling conditions, electrical panel capacity, ADA transitions. A contractor who’s done this kind of project before can quote those items now, before there’s any pressure on either side. A contractor who waits until it happens is negotiating from a position where you have no room to push back.
✅ Best practice: Before signing, ask each bidder for a written list of their five most common change order categories on similar projects, and roughly what they’ve cost historically. A contractor with real experience will have this answer ready. One who doesn’t is telling you something too.
What a fair change order actually looks like
Fair doesn’t mean cheap. It means the price reflects real, documented cost, agreed to before the work starts, not sprung on you after it’s already done. It means the contractor tells you about a problem the day they find it, not the week before a milestone payment is due. And it means “unforeseen” is actually unforeseeable, not something a more careful bid would have caught the first time.
This is the real test: A contractor who’s genuinely surprised by a condition underground has a different posture than one who priced the job assuming they’d find out later and charge for it then. You can usually tell the difference by how they explain it to you.
The Sela Way
We don’t win every bid. Sometimes the number that gets compared is one we can’t or won’t match, because we priced what the job actually requires instead of what makes the comparison look good. That’s cost us work over 25 years, and we’ve made peace with it.
What it hasn’t cost us is the second call. The clients who come back for the next location, and the one after that, are usually the ones who watched their first project close out close to the number they signed for. Not because nothing ever came up. Because when something did, the price was fair and the explanation made sense the first time they heard it.
That’s the whole difference. Not a lower number on day one. A number that still means something on the day the building opens.