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Engineering PlansThere are a variety of surety bonds that a contractor must obtain when involved with a construction project, from bidding to project completion. While multiple contractors invest time and money into developing a proposal and purchasing the required bid bond, only one will be awarded the contract, after which, a contract bond must be purchased before work begins.

But, what happens to the contractors who do not win the contract? In most cases, they’re out the time and money they put into the project’s initial phase. So naturally, people began to question if the losing bidders should be compensated for their contributions. Let’s take a look at both sides of the argument.

Yes, They Should Be Compensated

The people who think that losing bidders should be compensated for their work believe so for the following reasons:

·         Offering this compensation would encourage more bid competition, leading to proposals of better quality. In theory, this could save taxpayer money in the long run.

·         With access to better proposals, applicable ideas can be used on similar projects. This means that bidders indeed deserve to be compensated if their ideas are used.

No, They Shouldn’t Be Compensated

The people who think that losing bidders do not need to be compensated for their work believe so for the following reasons:

·         Some people believe that compensating losing bidders is waste of taxpayer money.

·         It’s believed that if bidders truly wish to land a project, they’re put the effort into their proposal to stay in competition, resulting in higher quality work. On this train of thought, offering compensation to losing bidders may encourage anyone to submit a bid just to receive that stipend.

These are the most common arguments for both sides of the issue. What’s your take on it?

Get the coverage you need. Call Lancette Agency at (651) 264-1230 for more information on Minneapolis surety bonds.

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