The Lowest Bid Trap
A new contractor wins their first government bid. The award letter feels like a milestone. Sometimes it is. Sometimes it's a warning sign hiding in plain sight.
If a bid wins because it's significantly lower than all the others, the contractor may not have priced the work correctly. The agency picks the bid because the rules require them to. The contractor performs the work at a loss — sometimes a small one, sometimes catastrophic — and learns the lesson the expensive way.
The difference between a winning bid and a winning profitable bid lives in line items most new contractors don't know to include: overhead allocation, contingencies, compliance costs, retention timing.
Want to know the exact line items new contractors leave out — and the math for pricing public-sector work correctly? Members get the estimating framework.Reserve your spot →