The project Owner advertises for bidders and accepts the bid from the lowest qualified bidder.
The project Owner, often based on the Architect / Engineers’ recommendations, selects a group of contractors to bid on the project. The lowest qualified bid is usually accepted.
The owner negotiates with one or more contractors, and chooses the contractor that he feels is the best for this project. The selection decision is usually based on CONFIDENCE, TRUST and RELATIONSHIP.
1.) Potentially more risk for Owner
2.) More risk for Contractor
3.) Sets up an ADVERSARIAL relationship among Contractor Architect/Engineer, and Owner
4.) Contractor must select lowest cost bids to receive contract and protect its self-interest
5.) Changes in the work are made for any inconsistency or omission to the plans
6.)No contractor involvement during planning stage
7.)Price and schedule are the deciding factors
8.)Makes the assumption that the quality will be the same no matter who works on the project
1.) Potentially less risk for Owner
2.) Less Risk for Contractor
3.) Sets up a TEAM relationship among Contractor, Architect / Engineer, and Owner
4.) Contractor can work with owner to emphasize quality, service, and the best interests of the project
5.)Changes in the work are generally made in plan development
6.)Heavy involvement of contractor during the planning stage
7.) Decisions based on experience, quality, reliability, on-time completion schedule, creativity, customer service, and price are factors
8.)Contractor has no choice but to select the low-bid subcontractor or risk not getting the job.