Originally Published in The Generals (2025 Summer Edition), the official magazine of the Ontario General Contractors Association, this article is the first in a four-part series aimed at helping general contractors navigate the legal and strategic challenges at each stage of a construction project.
In a highly competitive market, quoting is often treated as a race to the bottom — a pricing game with little time for reflection. But submitting a quote (verbally or in writing) is not just a business offer; it’s the first step toward a binding contract, with real legal and financial consequences. General contractors who take the time to ask strategic questions and assess risks before bidding are far more likely to avoid costly disputes, manage scope creep, and set the tone for a successful project.
Interpretation and Costing of the Drawings, Specifications, and Scope of Work
A simple review of plans and specs is not enough — dig deeper and ask: Is the scope buildable based on what’s been provided? Before pricing any project, a general contractor must be certain of what is — and isn’t — included in the drawings, specs, and scope of work. Misinterpreting or overlooking a vague or incomplete scope of work, or attempting to interpret poorly coordinated drawings, are among the most common causes of dispute after the contract is awarded. Of course, such lack of clarity can be an opportunity to seek profitable extras — but not without the risk of a hard-fought dispute as to whether or not you are entitled to such extra compensation. Is it worth the risk to let fate run its course by intentionally failing to identify ambiguities, inconsistencies, discrepancies, and lack of coordination prior to submitting your bid?
Some critical questions to ask before submitting a bid:
- Has the owner provided a complete and coordinated drawing package?
- Are the specifications consistent with the drawings? Most typical construction contracts state that specifications’ interpretation supersedes that of the drawings.
- Are there deficiencies or omissions in the drawings that require guesswork based on the general contractor’s experience (or lack thereof)?
- Have unit price allocations and allowances been clearly identified?
- Are there any ambiguous or undefined contractual terms and conditions that may have a significant impact on financial risk and legal exposure?
Where there are inconsistencies, missing information, or ambiguity in the bid package, it is essential to seek clarification in writing prior to submitting your bid. Unless you have a high risk tolerance for bidding “blindly,” if time doesn’t allow for clarification, you should consider withdrawing from the bid process — or your quote should include clear qualifications.
Risk Allocation and Contract Form Embedded in Bid Documents
Best practice: general contractors should be on the lookout for unexpected provisions and documents referred to or embedded in the bid documents. For example, even though you may expect to be provided with a formal contract for negotiation and signature after being selected as the low bidder, you may be surprised to learn that you have already “negotiated” and “agreed” to the formal contract — and all its terms and conditions, both neutral and unfavourable — embedded in the bid documents. The time to be vigilant is before you submit your bid.
More key questions to ask before submitting a bid:
- Is the form and substance of the contract referred to or embedded in the bid package? Will this be a fixed-price, unit-price, cost-plus, or construction management arrangement?
- What contract form is expected (e.g., a standard industry precedent such as CCDC-2, or a custom form)? If a custom form, be extremely cautious and be sure to understand all of its risk allocations — it is almost certainly not favourable to the general contractor. The same caution applies to detailed supplementary conditions.
- Are there liquidated damages clauses, force majeure clauses, or other risk-shifting terms?
- Are the conditions required to satisfy the determination of a “proper invoice” too expansive or too onerous?
- Are there extended warranty provisions, onerous indemnity clauses, and/or performance bonds that extend until the end of the longest warranty period? For example, until the end of the 7-year Tarion major structural defects warranty period.
Bottom line: don’t price what you don’t understand.
Read Part 2 of this series: Prebid Contract Pitfalls