Lowest Bidder, Highest Cost

Often, a project is awarded to the cheapest provider who underestimates and underbids to win the job. They stretch their means, usually their people, to deliver the ends. When the sponsor negotiates for a lower price, they should also be asking if they are also getting discounted scope? They probably are. If re-work is required or the timeline extended, the cost of the project increases, maybe even surpassing the highest original bid. In the end, awarding to the cheapest bidder may actually result in the highest cost. After all, the vendor is adjusting their means to deliver their ends–which is to turn a profit.

Aristotle’s full quote is, “First, have a definite, clear practical ideal; a goal, an objective. Second, have the necessary means to achieve your ends; wisdom, money, materials, and methods. Third, adjust all your means to that end.”