Estimating Practice Exam

Private owners often invite contractors to bid on construction projects in which type of system?

1. Open bid system

2. Restricted bid system

3. Closed bid system

4. Invitation-only system

The correct answer is: Closed bid system

The correct response identifies the closed bid system, which is characterized by private owners inviting a select group of contractors to submit their bids for construction projects. In a closed bid system, the owner typically has specific criteria for choosing which contractors will be invited to bid, often based on their qualifications, past performance, or experience in similar projects. This method allows for more control over the bidding process, as the owner can evaluate bids from contractors they trust or who have been prequalified. In this scenario, confidentiality is often emphasized, as bids are submitted without competitors being able to see each other’s proposals until after the bids have been opened. This system can lead to more tailored bids and can foster a more focused competition among the invited contractors. The other options do not fit the context as well. The open bid system allows any interested contractor to submit a bid, making it a broader approach and not limited to preselected contractors. The restricted bid system is somewhat similar but typically involves a larger group than what is standard in a closed bid atmosphere. Lastly, the invitation-only system could imply an informal approach without the structured criteria that define a closed bid process. Thus, the closed bid system aligns best with the specified situation of private owners inviting contractors to bid.