The Risks of Choosing a Contractor on Price Alone

Sep 9, 2025

Cost is a factor in every project, but making it the only factor is a common mistake. Selecting a contractor based purely on price can create more problems than it solves.

Key Points

  • Hidden Costs: Low bids may hide variations, exclusions, or cut corners that appear as costly changes down the line.
  • Capability vs. Cost: Ensure your contractor has the skills, systems, and scale for the project, not just a sharp price.
  • Program Risk: Cheap doesn’t help if deadlines blow out or subcontractors walk off due to unpaid invoices.
  • Safety Standards: Cost-cutting often undermines safety compliance — a high-risk liability for project owners.
  • Contractual Stability: Cheaper contractors may lack the financial stability to withstand large project cash flows and delays.