Utah General Contractors - Business and Law Practice Exam

What is bid peddling?

1. A contractor lowering their bid after selection

2. A subcontractor offering a reduced price to be selected

3. A government contract negotiation process

4. A competitive bidding practice that benefits all parties

The correct answer is: A subcontractor offering a reduced price to be selected

Bid peddling refers specifically to the scenario where a subcontractor approaches a general contractor, offering to perform the work for a lower price than that originally specified in their bid in order to be selected for the project. This practice typically occurs after a bid has been submitted but before the contractor has made the final selection of subcontractors. The nature of bid peddling raises ethical concerns, as it can undermine the integrity of the bidding process by creating an environment where prices fluctuate and can lead to a race-to-the-bottom in terms of pricing, affecting the quality and viability of the work. Within competitive bidding, bid peddling is often discouraged because it can distort fair competition, and many industry standards and contracts include provisions designed to limit or prevent such practices. In contrast, the other options describe scenarios that do not define bid peddling. For instance, the first option involves a contractor lowering their bid after being selected, which is different from a subcontractor seeking to change their initial bid to gain selection. The third option references a government contract negotiation process unrelated to the specifics of bid peddling, and the final choice misleadingly suggests a competitive bidding practice that benefits all parties, which is not congruent with the implication of manipulating bids as seen