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Best and Final Offers (BAFO) are probably the fastest growing trend in construction, especially given the economy today.  In a previous blog, I talked about the ethics of the BAFO process. There are legitimate reasons to utilize the process, but you have to have integrity from everyone involved or you may just be another bid shopper.

When dealing with vendors you need to ask yourself several questions when it comes to entering the BAFO process:
  1. Was the information that the vendors were provided to produce a bid unclear enough that all of them could have reasonably misunderstood the information and bid things that are incorrect?
  2. Has there been new information since the bid that would substantially change all of the bids?
  3. Was the new information out of the "reach" of all of the bidders?
If the answer is yes to all three questions, then you should probably enter a BAFO process.  When doing so you must make sure that you communicate clearly with all of the vendors.  Simply sending out an email to each of the vendors with a chunk of information and asking for a revised number on a specific date could make it appear like bid shopping.  The best rule is to view the BAFO process from their eyes.  Most vendors have a pretty good idea of where the numbers sit right after the bid, so any new request from you to provide numbers could look like a way for you to pad your pockets after award, which will only hurt your reputation.

The BAFO process serves a very important need in purchasing.  It can be abused and will hurt you in the long run if it is not executed properly.  Always communicate clearly with everyone involved and never share numbers or information between the bidders.  If one of the vendors has a unique way of providing for the job, he should win the job, that idea should not be shared in a BAFO process.  The easiest way to decide if a BAFO process is right for your vendors, ask yourself "if you were in their shoes, would you feel good about it, or would you think your customer is being unfair."

About the Author

Craig Pierce

Craig Pierce has been working in the construction industry for the past 25 years helping subcontractors master their trade. Currently he is President of Atalanta Enterprises which provides consulting services to contractors And software solutions through ConstructionMonkey.com.