In brief
- A bid can look complete while its contingency line is a placeholder that does not cover any real risk.
- Comparing contingency allowances line by line, and asking what each one pays for, exposes the gap before award.
- The client's own estimate still sets the ceiling; without one there is nothing to measure a low bid against.
Contents
A low bid in Borama often wins because the uncertain parts of the job were never priced. The tender contingencies underbidding risks that matter sit in the gap between what the drawings show and what the ground, the weather or the programme will demand. When that gap is unfunded, the contractor carries it, and the work absorbs it.
Where does an unfunded contingency hide in a Borama bid?
It hides in the sums that look like money but carry no scope. A contingency line in a bill of quantities should name the risk it covers: excavation below expected formation, extra dewatering, a longer rain stop, or a redesign after a soil report. If the line just says "contingency" with a figure and no description, the reviewer cannot tell whether it covers anything. The same applies to allowances for seawater-resistant fixing on coastal deliveries, or for curing water on an inland site in the hot months. Ask each bidder to write one sentence per contingency line: what event triggers it, who decides, and how the money is released. A bidder who cannot answer has priced a number, not a risk.
How do unrealistic allowances pull the total down?
They cut the price by moving work into someone else's column. Common moves include pricing a shallow foundation because no borehole log was supplied, assuming the client will provide water and power, or excluding cart-away of spoil and calling it "by others". Each of these is a real cost sitting outside the bid. The total looks low, but the scope is incomplete. Reviewers should line up every exclusion and ask where that cost lands if the condition fails. Check what the tender documents require the bidder to price, and compare that list against what each bid actually covers. If the client's own estimate exists, measure the bid against its contingencies line by line rather than against the headline total. Ask the municipal engineer's office whether it holds borehole logs or previous site records for the plot, and attach them to the tender so bidders price the same ground.
How do you detect omitted costs before award?
You test the bid against the conditions it will meet. Walk a recent site nearby with the bidder and the supervisor, and ask what that job did not anticipate. Request the method statement, the programme and the plant list, then check whether the rates can deliver them. Ask for the curing and water plan, the spoil plan, and the plan for the Gu and Deyr rains. Compare the contingency total against the items that could realistically change: ground conditions, fill import, haul distance, and the time lost to rain. A contingency that is small relative to those exposures is a warning sign. Confirm any technical limit against the project specification or the engineer, since general practice on cover, slopes and curing varies between jobs.
What to do next
Before award, send every bidder one written question: list each contingency, the event that releases it, and the cost it covers. Compare the answers against your own estimate and the site records. Where an answer is missing, ask the bidder to price the item or withdraw it in writing. Keep the replies with the tender file so the contract carries the same understanding.
Frequently asked questions
Should a client reject a low bid outright?
No. Ask what the bid excludes and which risks its contingency covers. A low total with named, priced risks can be workable. A low total with a blank contingency line usually is not.
Who decides whether a contingency is released?
Check what the contract says. The usual arrangement ties release to a defined event and a named approver, often the engineer. If the tender does not name that person or event, ask for it in writing before award.
Local reporting: this article is written for building work in Borama and Somaliland. Ground conditions, prices and rules differ between places; confirm the details for your own site.