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Ethical issue,or issues, affecting the Construction industry today (mainly in the USA) - Research Paper Example


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Ethical issue,or issues, affecting the Construction industry today (mainly in the USA)

This paper explores the issue of bid shopping in construction. This paper compiles information about bid shopping for the construction professionals who want to gain an in-sight to this unethical issue. Introduction Bid shopping is one of the most unfortunate realities of the American construction industry. It is a process wherein the price of bid of a subcontractor is disclosed by the general contractor to another subcontractor so that the general contractor may be able to get the work done in lesser cost. Bid peddling is a similar concept in which a subcontractor volunteers to make a bid lower than a known amount of a second subcontractor. Bid shopping totally ruins the integrity of the bidding process and it may happen in both the pre- and post-contract-award time. Bid shopping has conventionally been tried to stop by the contract law, but they have not proved effective in stopping the practice. The amount of bid shopping can be reduced by creating more awareness in the contractors regarding the effects of this practice. Bid shopping is one of the most fundamental hindrances in the way of fast and cost effective completion of the construction projects. This paper explains the detrimental effects of the bid shopping. Bid shopping in the bidding process The bidding process is generally well-known by all subcontractors and general contractors. One of the most crucial elements of every bid that is made is the solicitation of the competitive bids that are made by other subcontractors. The

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conduct of people involved in the act of bid shopping is governed by various laws. The best deal may not always be obtained by legal means. Bid shopping in a specific project takes place as a result of continued solicitation of bids by the general contractors from the subcontractors after the selection of their original bid. In the course of preparation of bid submission on a particular project, one set of subcontractors is made use of by a general contractor. After the grant of project to the general contractor, he tends to receive bids from a different set of subcontractors with a view to reducing the expenses and increasing the profitability of the work. This may be allowed in some circumstances, but bid shopping is forbidden in a vast majority of cases. Both subcontractors and general contractors should perceive the involved legal implications so that they may be able to escape liability and also enhance their profits. Permissibility of bid shopping To find out if bid shopping is permissible according to law, the owner of bids and also the project should be considered. Owners are primarily of three kinds, the first of which is of the owners of private projects in most of which, bid shopping is allowed. “The law usually holds that no enforceable contract is created between a general contractor and a subcontractor during the initial bidding process” (The Lien Zone, 2008). In such circumstances, the general contractors find an opportunity to keep soliciting bids and hiring new subcontractors after the original bid has been granted. The subcontractors may also retreat from the contract on a private project any time if they think that the profit is not worth the effort. The second type of owner is municipality, who proceeds in accordance with the municipal codes which lay certain restrictions in the way of both the subcontractors and


Ethical Issues Affecting the Contemporary American Construction Industry: Bid Shopping Name University Ethical Issues Affecting the Contemporary American Construction Industry: Bid Shopping Abstract Construction work all over the world including USA is affected by a number of unethical practices, one of which is bid shopping…
Author : dpowlowski
Ethical issue,or issues, affecting the Construction industry today (mainly in the USA) essay example
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