Dive Brief:

• Negotiating a construction contract with one company will likely cost a client more than going for the lowest number in a bidding process, but two executives at Englewood Construction Inc. argue that the client gets a partner, not just a contractor, and gets a say in what aspect of the project deserves the most spending for top quality.
• William Di Santo and Chuck Taylor say that negotiating helps the contractor understand what is most important to the client beyond just saving money, and the contractor can use that in making suggestions and decisions.
• In a negotiated contract, the general contractor has an incentive to save the client money wherever possible – materials, schedule, methods – because the contractor shares in the savings, usually getting 30% while the client gets 70%.

Dive Insight:

The premise of Di Santo's and Taylor's argument is that they have client who is willing to spend more than the bid process would cost because quality sometimes outweighs cost. An example they give is a shopping center that does not want the cheapest possible lighting because lighting can define the project to the public.