Which procurement method is typically associated with the lowest construction cost?

Which procurement method is typically associated with the lowest construction cost?

• A. Competitive bid
• B. Negotiated select team
• C. Design-build
• D. Integrated project delivery

Answer: (A)

The main idea is that price competition drives the lowest construction cost. In competitive bidding, the owner invites bids from qualified contractors, the bids are publicly opened, and the contract goes to the lowest responsive and responsible bidder who meets the scope and requirements. This process incentivizes bidders to submit their lowest possible price because they know price becomes the primary factor in selection, assuming they meet the necessary qualifications. This approach tends to yield the lowest initial construction cost because multiple firms vie to win the contract, pushing prices down. The other procurement methods—negotiated select teams, design-build, and integrated project delivery—often aim for value, risk transfer, faster scheduling, or better coordination, which can reduce total costs or improve quality but may not produce the lowest upfront price.

The main idea is that price competition drives the lowest construction cost. In competitive bidding, the owner invites bids from qualified contractors, the bids are publicly opened, and the contract goes to the lowest responsive and responsible bidder who meets the scope and requirements. This process incentivizes bidders to submit their lowest possible price because they know price becomes the primary factor in selection, assuming they meet the necessary qualifications.

This approach tends to yield the lowest initial construction cost because multiple firms vie to win the contract, pushing prices down. The other procurement methods—negotiated select teams, design-build, and integrated project delivery—often aim for value, risk transfer, faster scheduling, or better coordination, which can reduce total costs or improve quality but may not produce the lowest upfront price.