Can a dearer bid be the cheaper option?
Yes. A bid that is 20% dearer and includes the changes, support and rework the cheap bid will later charge for is not dearer.
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The cheapest bid is the most expensive decision on the table
Because a bid well below the others either misreads the job or was priced to win rather than to deliver, and both costs come back during delivery, as out-of-scope charges, junior staff or cut corners, once you are committed and have no negotiating position left. Price is the only hard number on selection day, which is why people anchor on it. Score value instead: set the criteria and the weight of price before bids arrive, ask for evidence of delivery, and compare the three-year cost.
I once sat in a trustee meeting and argued against the cheapest bid. As the unpaid advisor in the room, with no fee riding on the outcome, I could say it plainly: this is donated money, and the cheapest way to spend it badly is to pick the lowest number on the table.
We did not pick the cheapest. The project came in on scope and the charity still uses what it bought. I have sat in versions of that meeting for forty years, and the pull of the low number never weakens. It deserves a proper answer, so here it is.
Why the low number always looks sensible
On selection day, price is the only real number in the room. Everything else, the quality of the work, the fit of the team, the truth of the timeline, is an estimate dressed as a fact. Faced with one hard number and a page of soft ones, people anchor on the hard one. Choosing it feels prudent, and better yet, it is defensible. Nobody was ever hauled in front of a board for taking the lowest quote.
But think about what a significantly low bid actually tells you. Either the bidder understands the job differently from everyone else, or they have priced to win rather than to deliver. Both cost you. The first surfaces as "that wasn't in scope" three months in. The second surfaces as junior staff on your project, corners quietly cut, or a supplier who resents the job by the halfway point. The gap between the cheap price and the real price does not vanish. It moves downstream, where it compounds, and where you have no negotiating position left because you are already committed.
The saving was never a saving. It was a loan, and delivery is where the interest gets charged.
Cheap, expensive and the third thing
The mistake underneath all this is treating the decision as cheap versus expensive. The real axis is price versus value, and value needs evidence, not adjectives.
When I run a selection properly, the scoring is built before the bids arrive, and price is one criterion among several with its weighting fixed in advance. Does the bidder demonstrate they understood your problem, or did they answer a different, easier question? Can they show delivery, not describe it: real projects, referenceable clients, the same team that will work on yours? And what is the three-year cost, including the changes, support and rework, not the day-one figure? A bid that is 20% dearer and includes the things the cheap bid will later charge you for is not dearer.
Run it that way and sometimes the cheapest bid wins anyway, on merit. Wonderful. Now you know it was cheap because it was efficient, not because it was hollow, and you can proceed with confidence instead of hope.
The awkward part
Here is the reason this discipline is rare: the person advising you on the choice is often paid more when the project is bigger, or is bidding themselves, or wants the relationship. Advice to spend more is suspect from anyone who benefits from the spend. That trustee meeting stuck with me because the argument only carried weight for one reason. Everyone in the room knew I gained nothing either way.
You will not always have an unpaid advisor to hand. But you can borrow the position: before the decision, ask what each voice in the room gets from each outcome, and weigh accordingly. And if every advisor you have stands to gain from a yes, find one who does not, just for the day.
Cheap is a price. Value is a judgement. Boards that cannot tell the difference pay the difference, usually twice.
Questions people ask
Why does it matter who is advising on the choice?
Because advice to spend more is suspect from anyone who gains from the spend. Before deciding, ask what each voice in the room gets from each outcome, and if every advisor gains from a yes, find one who does not.
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