What Is a Bid Division?

Bid division is a practice where different components of a project are broken up into chunks and opened for bid individually. This approach may be used for large and complex projects where there may be concerns about the ability of one contractor to complete the work appropriately and in a timely fashion. In situations where bids are divided, contractors may be able to put in multiple bids, but they will need to bid separately to express interest in the project, rather than putting in a single large project bid.

In an example of bid division, a government agency might order a new facility. It can break the contract into components like plumbing, wiring, flooring installation, landscaping, and so forth. It publishes a public notice to make contractors aware of the project, and the separate requests for bid available. Contractors can ask for information packets on the different divisions to get more information about what is expected and what they would need to provide. When prepared, they can submit bids for areas of interest.

Government agencies can use bid division to shop for services from a number of contractors, rather than relying on a single entity for a whole project. It may be possible to get less expensive work this way, and the work may also be of higher quality because the agency can pick the most appropriate contractor for each component. At the time bids are opened and reviewed, the contract is usually awarded to the lowest offer, unless there is a compelling reason to direct resources to another offer, such as a demonstration of particular skills, or questions about the abilities of a contracting firm to actually meet a low bid.

Contractors with an interest in government contracts of this nature can usually find information about open bids at government offices. They may also be listed in the legal notices of the newspaper. To place bids, it is necessary to follow directions, taking particular note of where to direct bids, and any deadlines listed by the agency. It will typically not review bids that do not make it in by the deadline, and can dismiss bids that don't meet the specifications of the bid division.

Members of the public can see the outcome of a bid division, if they have an interest. Once the agency awards a contract, the identity of the contractor enters the public record, and people can request more details. This is designed to maintain transparency, to encourage agencies to deal accurately and honestly.