When a business owner in Phoenix, Arizona, sends the same set of plans to five contractors and receives five vastly different numbers, it often signals more than just pricing disparities. According to Mike Marden, a registered architect and licensed general contractor and founder of WDS, a Phoenix-based integrated design-build firm, the spread usually traces back to specific gaps in the bidding process. Understanding these gaps is essential for owners to make informed decisions and avoid costly surprises.
Marden, who has observed this dynamic from both sides for decades, explains that the variation often starts with what contractors are actually looking at. If the bid is based on a preliminary walkthrough rather than a finished, detailed set of plans, there is already room for wildly different interpretations. “There’s a lot of interpretation going on there,” Marden says. “Their imaginations are running wild, or the owner giving them information is presenting it a little differently each time.” Even with a full set of plans, the numbers can diverge based on how much time and attention a contractor plans to spend on supervision, management, and overhead.
One of the most common reasons bids spread apart, according to Marden, is that some contractors visit the actual job site while others do not. “They have the drawings or the specs, but they don’t go out and look. They don’t walk the job site,” he says. If two out of five bidders skip that step, they are pricing a different project than the other three, even though everyone received the same paperwork. Special instructions or desired exclusions can also get missed by contractors who are not reading closely, widening the spread further.
Owners often assume the lowest number is the safest choice, but Marden says the real problem is usually that the bids were never in a comparable format. “Please break these down into separate scopes,” is the basic ask he recommends. Without that breakdown, markups like overhead, insurance, and taxes stay hidden inside a single lump-sum number, making it impossible to know what is actually being paid for. For larger projects, Marden suggests separating a project into logical phases and then breaking each trade out individually, including detailed supervision costs.
Red flags include bids that look too good to be true, which often are. Marden advises checking who submitted the bid and whether the contractor has experience with similar projects. “If it looks very thorough, you’re going to have to dig deeper. If it’s just a one-liner or it looks like it’s put together quickly, then I think we’re on to something,” he says. He also flags a missing project schedule as a warning sign.
The clearest way to prevent confusion is to set terms before bids come in: state the expected project duration, require a timeline or schedule, and demand a standardized, itemized form that breaks out insurance, taxes, and overhead and profit separately from trade costs. Getting everyone on the same playing field before the numbers arrive is what makes an apples-to-apples comparison possible. For business owners, this approach can save time and money, and for the industry, it promotes transparency and fairness in the bidding process.
