Bid analysis measured against your own track record

Every bid looks reasonable until you have something to compare it to. The low bid wins on the spreadsheet and then bleeds change orders because the scope was thin. The high bid gets dismissed when it actually priced in a real condition the others ignored. The missing piece is a baseline, and the best baseline is not a published cost index. It is your own delivery history.

This piece covers why overruns are the norm, why change orders make the low bid risky, and how your own track record becomes the baseline that exposes both.

Overruns are the norm, not the exception#

The industry data is blunt. McKinsey Global Institute research, drawing on large projects across asset classes, finds that the large majority come in over budget, with overruns commonly around 28 percent and large projects running far higher, and that schedule slippage travels with cost (McKinsey). KPMG’s global construction work has similarly found that only about a quarter of projects finish within ten percent of budget. These are not outliers from bad contractors. They are the baseline, which means a bid evaluated in isolation is being judged against the wrong reference point.

Why the low bid is often the expensive one#

Change orders are a leading cause of overruns, and they are where a thin bid catches up with you. A scope left vague or a condition left unpriced becomes a change order later, at a price negotiated from a weaker position. McKinsey has found that contractors using historical data in preconstruction reduce change-order costs materially, which is the same point from the owner’s side: the way to avoid the change-order tax is to test a bid against what comparable work has actually cost, line by line, before signing.

Your track record as the baseline#

Your portfolio has already told you what a buildout, a re-roof, or a tenant improvement costs you to deliver, including the change orders that arrived after the original bid. Measuring a new bid against that record surfaces the gaps: the line that is low because something was left out, the line that is high relative to what you have paid ten times before. Doing it requires your historical project and cost data organized and comparable, the same foundation behind estimating buildouts on real delivery cost and capital planning.

REAL organizes your historical project and cost data so each new bid can be compared line by line against what similar work has actually cost across your portfolio, which is what turns a low number into an informed decision.