When a Phoenix business owner sends identical plans to five contractors and receives five wildly different numbers, the gap is rarely about contractors trying to take advantage, according to Mike Marden, a registered architect and licensed general contractor who founded WDS, a Phoenix-based integrated design-build firm. Instead, the variation usually traces back to how much room for interpretation exists in the bidding process itself and how well each contractor fits the project. Marden, who has observed the dynamic from both sides of the table for decades, says understanding those gaps is the key to making bids comparable.
The first source of divergence is what contractors are actually looking at. If bids are based on a preliminary walkthrough rather than a finished, detailed set of plans, there is already ample room for different interpretations before a single number is written down. “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 full plans, the amount of time and attention a contractor plans to spend on supervision, management, and overhead shows up directly in the final price, creating further spread.
One of the most common reasons bids diverge, 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 effectively pricing a different project than the other three, even though everyone received the same paperwork. Special instructions, separate exhibits, or desired exclusions can also be missed by contractors who are not reading closely, widening the gap 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. He recommends asking every bidder to break their proposal into separate scopes so that markups like overhead, insurance, and taxes are not hidden inside a single lump-sum figure. For larger projects, he suggests separating the work into logical phases—such as interior versus site work or landlord versus tenant work—and then breaking out each trade individually. Requiring every bidder to detail supervision costs is especially important, since Marden considers supervision one of the biggest drivers of price differences; some contractors provide a dedicated daily on-site quality control supervisor, while others may only have someone occasionally driving by.
A bid that looks too good to be true often is, and Marden says the first place to look is not the number but who submitted it. “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 recommends checking whether the contractor has completed similar projects—a company skilled at building houses is not automatically qualified for a medical office or restaurant—and reviewing the types of projects shown in website photographs. A missing project schedule is another red flag, since a contractor who has not accounted for the full duration of the job may not have built enough into the price to cover it.
The clearest way to prevent confusion, Marden says, is to set the terms before bids arrive: state the expected project duration or ask each contractor to submit a timeline, and require a standardized, itemized form that breaks out insurance, taxes, and overhead and profit separately from trade costs and from project personnel and job site costs. Getting everyone on the same playing field before the numbers come in is what actually makes an apples-to-apples comparison possible.
