Bid shopping and bid peddling in construction

Why the industry frowns on them

• Subs price defensively. A sub that expects to be shopped holds back its best number on bid day, so the general contractor's bid ends up higher, not lower.
• Confidential prices leak. A sub's quote is its own business information. Showing it to a competitor breaks trust.
• Quality and safety suffer. A sub squeezed after award looks for savings in labor, supervision and materials.
• Good subs stop bidding to you. A reputation for shopping shrinks the bid list.

Shopping is not the same as buyout

After award, a general contractor has to buy out the job: sign every subcontract and purchase order. Fair buyout includes:

• confirming each sub's scope line by line, so nothing falls between trades
• correcting a sub's clear mistake, or letting the sub withdraw it
• agreeing on schedule, insurance, bonds and payment terms
• negotiating a real scope change, such as an owner-accepted alternate or value engineering

What makes it shopping is using one sub's price as a lever on another for the same scope.

Where rules apply

• Subcontractor listing. Some public owners, and some states for public work, require bidders to name their major subs in the bid and restrict substituting them afterward. These laws exist partly to stop shopping. Which jobs they cover, and the rules for substitution, differ by state.
• Bid depositories. In some regions, sub bids go through a depository with set rules on timing and use. Participation is local and voluntary.
• Sub bound, general contractor free. In many states, courts have held a sub to the price it gave when the general contractor relied on it in its own bid, under a doctrine called promissory estoppel. The general contractor is not usually bound to use that sub. That one-sided result is a big part of why subs resent shopping.

A worked example with invented numbers

On bid day, a general contractor carries $1,100,000 of sub prices in a $1,450,000 bid.

What shopping can look like. After award, it takes the low drywall price of $212,000 to a second sub and gets $198,000.

• Saving: 212,000 - 198,000 = $14,000
• As a share of the drywall price: 14,000 / 212,000 = 6.6%, rounded

Check: 212,000 x 0.066 = 13,992, close to 14,000 after rounding.

What it can cost. If subs who know this general contractor shops add 3% to their bid-day prices as a cushion:

• Added to the bid: 1,100,000 x 0.03 = $33,000
• New bid: 1,450,000 + 33,000 = $1,483,000

Check: 33,000 / 1,100,000 = 0.03, and 1,483,000 - 1,450,000 = 33,000.

The $14,000 won on one trade after award is less than half the $33,000 the cushion adds across all trades on bid day (14,000 / 33,000 is about 0.42), and the higher bid may lose the job to begin with. The 3% is invented. The point is the direction, not the size.

How to bid it clean

• Ask for prices on a clear scope sheet, so quotes are comparable.
• Level the bids on bid day: adjust each quote for exclusions and inclusions, then pick.
• Tell bidders the rules up front: one price, used as given.
• Award to the sub you carried unless there is a scope, qualification or bond problem you can name.
• Do not share one sub's number with another.

Common mix-ups

• Calling all post-award negotiation shopping. Fixing scope gaps or pricing real changes is buyout.
• Assuming it is illegal everywhere. On private work it is mostly an ethics and reputation problem. Listing laws apply only where a state or owner adopts them.
• Mixing the two terms. Shopping is done by the general contractor; peddling is done by the sub.

On the NASCLA exam

The bulletin lists subject areas, not topics. We place bidding practice and ethics under Procurement and Contracting Requirements, 31 of the 115 scored questions. Construction Project Management and the NASCLA Contractors Guide to Business, Law and Project Management fit by their titles, so tab their bidding topics.

Practice it

Level two invented sub quotes and check the markup on the result with markup vs margin. Read what is a bid bond for the general contractor's own promise on bid day.

Take the free 10-question check

Start the free 10-question check. It is weighted to the twelve NASCLA subject areas, needs no signup and explains every answer, so you see which area to study first.

The NASCLA Commercial course has a lesson for each of the 12 subject areas that shows which listed reference to open and how to apply it, original practice questions with every answer worked, and four timed practice exams of 115 questions on a 330-minute clock. Your scores come back by subject area, so you know where the next study hour goes. See the course.

Not affiliated with or endorsed by NASCLA or PSI. NASCLA and PSI are named only to identify the exam and its test vendor.

Sources

Show the list

• PSI Candidate Information Bulletin 1458, content outline and reference list, updated 7 Jul 2026. Retrieved 5 Nov 2026.
• NASCLA Commercial Exam, NASCLA. Retrieved 5 Nov 2026.
• All examples use invented numbers. Listing laws and court doctrines are described in general; each state's law decides the details.