Which of the following statements about unbalanced bids is correct?O An owner may reject a heavily unbalanced bid as an irregular bidOwners may sometimes accept a small amount of front-end unbalancing so a contractor canfinance the early stages of a projectUnbalancing a bid to take advantage of an owner's error is unethicalUnbalanced bids are not a problem - the owner pays the same as with a balanced bid

The correct option is (b) Owners may sometimes accept a small amount of front-end unbalancing so a…

Answered: Which of the following statements about…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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Which of the following statements about unbalanced bids is correct?
O An owner may reject a heavily unbalanced bid as an irregular bid
Owners may sometimes accept a small amount of front-end unbalancing so a contractor can
finance the early stages of a project
Unbalancing a bid to take advantage of an owner's error is unethical
Unbalanced bids are not a problem - the owner pays the same as with a balanced bid

Expert Solution

Step 1

The correct option is (b)
Owners may sometimes accept a small amount of front-end unbalancing so a contractor can finance the early stage.

When an unbalanced bid is at one time that accommodate round sum or unit price that do not include other direct costs, pro-rata share of the project overhead, markup, bond and taxes.
Precisely, there is no exact parameter to calculate the variance from actual estimate made by an engineer. Sometimes, lowest bids are also rejected due to unbalanced bid because contractors try to control the bid by raising one bid and certainly lower the other one to balance the total contract bid.
In the main, contractors under quotes the price while bidding the unit price and when they get the contract, they create problems later.
An unbalanced bids are mostly not in the owner's interest because once the project starts at the price stated, later they cannot stop the project else the amount invested will turn into huge loss.

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