Additive Alternate Bid
A supplementary bid for a project which quotes a sum to be added to the base bid if there is a change in the specified work or materials.
Additive Alternate Bid Details
A base bid quotes an amount for a baseline project, such as fitting a new kitchen, and an additional bid for extra items added to the baseline project might accompany this base bid. The base bid might cover design, construction, and work surfaces but not include new appliances. When the commissioning party opens the bids and discovers the base bid price, it can add bid items if extra funds are available.
The commissioning party can ask for a different quotation if they want to use an alternative construction method specified in the base bid. Or the commissioner can request to see the charged price if it used different materials. An alternate bid is additive if the new price is greater than that quoted in the base bid and deductive if the new price is less.
For the commissioning party, the advantage of using alternate bids lies in matching the funds available with a base price. This base price, in additive alternate bids, should be less than the budget available. The commissioning party can then easily calculate what additions or changes are affordable.
Example of Additive Alternate Bid
Mega has decided to build a new cafeteria for its staff and asks construction companies to bid for the project. The baseline bids include the price for construction and fitting the building with kitchen equipment, and supplying furnishings such as tables and chairs. Mega specifies that the materials should be of good quality but the most economical possible. At the same time, Mega asks for additive alternate bids that cover specified changes to the original baseline bid:
- Using marble instead of laminate on worksurfaces
- Painting the cafeteria in pastel colors
- Providing more comfortable chairs and installing better air conditioning
Mega receives six quotations for the project. Of these, three are significantly below the amount that the company has budgeted. Mega can now decide which of the upgrades it wants to include based on the additive alternate bids which it asked the construction companies to supply. Mega might determine that it can now afford better air conditioning and more comfortable furniture, but laminate worksurfaces are sufficient.
Mega found that asking for alternate bids offered them more control and flexibility. Mega knew how much they were spending and what exactly they were buying and what options were open to them. There were also advantages for the construction companies that had quoted for the project. What Mega wanted and how much they would pay was clear from the beginning, so there were fewer grounds for future disputes.
Additive Alternate Bid vs. Alternate Bid
An additive alternate bid is a form of an alternate bid. Alternate bids have two basic forms: the additive alternate and the deductive alternate, which is, perhaps, less common. A deductive alternate bid is one in which the alternatives to the baseline bid are less expensive than those in the baseline bid.