Be wary of low bids by contractors.

Get a number of bids. Compare and check why a low bid is so low.
If a low bid is accepted, be especially careful in your documentation, communication, contract conditions, and liabilities.

Be aware that by taking the lowest bid (especially if it is significantly lower than the others) you will be increasing the risk that the contractor won’t be able to deliver to the quality and schedule you require.

Tagged with: bid • contractor • Procurement • Risk

Filed under: Contractors • Procurement • Risk

Do a proper risk analysis before bidding for and accepting a project.

• Be especially aware of “first of its kind” projects for yourself, your company, or your industry (industry level is particularly risky).

• If the project is the first of its kind kind in that industry, the client should pay for prototyping, research, etc.

• Be wary of giving warranties on first of kind for that industry.

Tagged with: Risk

Filed under: Planning • Risk