Sierra Group ESD | Top Benefits of a Negotiated Contract

When it comes to constructing or maintaining a commercial structure, there are many variables and many of them hinge on whether you choose to solicit competitive bids or a negotiated contract. Any long-time readers will know that while there are many valid reasons to go the competitive bid route, we at Sierra Group believe strongly in the power of a negotiated contract.

Here are just a few reasons why the negotiated delivery method is beneficial for all parties involved.



You are Working with a Trusted Professional

By nature, there is always a lot on the line for commercial projects, and turning one over to any contractor involves a lot of emotional energy. Since a negotiated contract is awarded to a contractor based on their history of providing quality service, it eliminates many of the problematic variables from the start. Those involved can confidently move forward with a knowledgeable, proven, and trusted professional.  


You Lead with Expertise

A competitive bid scenario can be a race to the bottom in more ways than one. While the company is getting the lowest bids, as in anything, you get what you pay for. To continue to cut prices, contractors must find savings elsewhere, and the hiring entity could suffer in finding out where later. In a negotiated bid, a company considers far more than price and looks at a firm’s qualifications and history of success. 

Better Price Control

In any large-scale project, price is certainly a consideration. However, choosing a contractor based on price alone is a fast way for things to go sideways. Working with a negotiated bid, your general contractor works with you to maintain standards, efficiencies, and budget across all project phases.


You Benefit from Shared Trust

An essential element of a negotiated contract is the integrity of both parties involved. When two honest organizations work together, they will create a transparent, fair, and easy deal for both to follow. This will result in a decreased chance of disagreements occurring during the project.

When trust is earned, a business can feel confident in California commercial contractors. During a negotiated contract, both companies will have worked together during the project’s planning phase.


The Project Has Better Value

It is common for a business to fear a contractor will take advantage of them unless they submit their project to a competitive bid process. However, the very nature of a negotiated bid and the resulting process ensures transparency and efficiency. All parties involved are invested in the project staying on budget, and the contracting company has an incentive to bring the most value possible to the project. A negotiated contract allows a company to work with the right contractor within the proper structure.


You Minimize Changes 

Changes are costly, and you will want to avoid them on any project. In a negotiated contract, the contractor comes on during the design phase and can review drawings to point out potential problems, errors, or concerns. This provides the opportunity to address those issues ahead of the construction phase. The ability to significantly reduce deviations from an established plan helps projects stay on time and within budget.


There is Increased Communication

A successful construction project is the result of an effective collaborative process.  Collaboration can be more of a challenge during a traditional hard bid process. With a negotiated contract, the business and construction company start working together at the very beginning. Both parties benefit from ensuring an efficient process. 

These are just a few of the many advantages of a negotiated contract. If you are going to embark on a construction project, call Sierra Group to help you realize the most benefit from your project.


About Sierra Group

Sierra Group’s Construction Division provides pre-construction services and general contracting services to Commercial, Industrial, and Retail industries, along with a Bank and Credit Union Branch construction specialty. We deliver by established best practices to minor special projects to complex major tenant improvements to save you time and money and avert distracting frustrations.

As a multi-disciplined service-focused company specializing in commercial construction, we have a unique 360° perspective that gives us the ability to help you meet your specific construction needs with laser precision.

Learn more about the Sierra Group difference here, or reach out to us at:

Carl Frommer
President & CEO
818-266-7402 (cell)
1-(888)-880-4949 ext. 224

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