Oregon Construction Contractors (CCB) Practice Test

What term describes when a subcontractor attempts to reduce the original bid price after the project has been awarded?

1. Bid peddling

2. Negotiation

3. Re-bidding

4. Subcontracting

The correct answer is: Bid peddling

The term that describes when a subcontractor attempts to reduce the original bid price after the project has been awarded is known as bid peddling. This practice can occur when a subcontractor approaches the general contractor with a lower price than what was initially agreed upon, often with the aim of getting a larger share of the project or creating competition among subcontractors. Bid peddling typically happens after a general contractor has made the award, which can undermine the initial bidding process and affect the project's integrity. It can create issues in contractual relationships and lead to challenges in managing project costs and schedules. Understanding this term is essential for contractors to maintain a fair and competitive bidding environment, and it underscores the importance of adhering to contractual agreements once a bid has been accepted. In contrast, negotiation generally refers to discussions that occur before a final agreement is reached. Re-bidding would imply a new bidding process rather than a price reduction from an existing contract. Subcontracting refers to the practice of hiring another company to perform part of a contracting project rather than price adjustments after the award. Thus, bid peddling distinctly defines the action of a subcontractor trying to lower the bid price post-award.