When a business owner in Phoenix sends the same set of plans to five contractors and receives five vastly different numbers, the variation often stems from project fit and the room for interpretation in the bidding process rather than contractor malfeasance. Mike Marden, a registered architect and licensed general contractor and founder of WDS, a Phoenix-based integrated design-build firm, has observed this dynamic for decades. According to Marden, the spread in numbers almost always traces back to specific gaps, and once an owner understands these gaps, comparing bids becomes much easier.
The bidding process itself introduces variability. If a bid is based on a preliminary walkthrough rather than a 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, bids can diverge based on how much time and attention a contractor plans to spend on the project, which shows up in supervision, management, and overhead costs. One of the most common reasons for bid spreads is that some contractors visit the 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,” Marden says. If two out of five bidders skip that step, they are pricing a different project than the others, even with identical paperwork. Special instructions or desired exclusions can also be missed, widening the gap further.
Owners often assume the lowest number is the safest choice, but Marden says the real problem is that bids are rarely in a comparable format. He recommends asking contractors to break down their bids into separate scopes. Without that breakdown, markups like overhead, insurance, and taxes remain hidden inside a 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, such as interior versus site work or landlord versus tenant work, and then breaking each trade out individually. This includes asking every bidder to detail supervision costs specifically, since Marden considers supervision one of the biggest drivers of price differences. Some contractors provide a daily on-site quality control supervisor, while others may just 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 experience with the specific project type, since a company skilled at building houses is not automatically qualified for a medical office or restaurant. Examining the projects featured on a contractor’s website is another indicator of true experience. A missing project schedule is a warning sign, as a contractor who hasn’t accounted for the full duration may not have built enough into their number to cover it.
The clearest way to prevent confusion is to set terms before bids come in: 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 arrive is what makes an apples-to-apples comparison possible. For owners, understanding these factors is essential to avoid costly misjudgments and ensure they select a contractor who truly fits their project.
