What is a negative consequence of bid peddling in subcontracting?

Bid peddling in subcontracting refers to the practice where subcontractors attempt to win contracts by significantly lowering their bids, often at unsustainable levels. This can lead to a situation where subcontractors are unable to deliver on the promises made in their proposals, resulting in a risk of substandard workmanship. Lower bids may lead to cuts in quality, materials, or labor standards, as subcontractors may try to meet profit expectations under unrealistic pricing conditions.

Subcontractors focused on securing work through bid peddling may prioritize winning the contract over maintaining quality standards, which can ultimately compromise the overall integrity of the project. This could lead to increased costs for the main contractor or project owner down the line if rework is required to address deficiencies or if quality issues affect the project's performance or safety.

In contrast, lower labor costs, higher quality work, and clear competitive advantages are often perceived benefits in a competitive bidding environment. However, these outcomes can be undermined if bid peddling leads to reckless underbidding, which puts quality at risk.