3 ms·
Profit isn't usually a big part of any budget. Ok, but budget directly influence profit, no? Do you have a proposed solution? How would one mitigate the "low
by bumby 4y ago
Profit isn't usually a big part of any budget.
Ok, but budget directly influence profit, no?
Do you have a proposed solution? How would one mitigate the "low bid" incentive?
My experience is that it creates an incentive to often create excessively low bids (to the point of not being profitable) in order to ensure a company gets a contract. And then ensure their "budget/profit" is made up by either a) cutting corners to reduce overhead or b) making change orders to increase revenue.
One solution is additional oversight, but it's not clear to me that is a feasible option.