Some bid documents request alternate prices where the owner wants to evaluate the effect on the bid price or construction duration if an alternate material, product or system is used in lieu of the specified material, product, or system. The specified material, product, or system becomes part of an adjusted bid price/time, where the alternate price/time is available for evaluating the effect on the bid price or construction duration.

Alternate Prices have been abused in the past to determine the winning bid by manipulating the low bid price by selective addition or subtraction of various alternate prices. This process can effectively change the ranking of the bids, sometimes resulting in the lower ranking base bid becoming the highest ranking adjusted bid by manipulating which alternate price combinations are selected for implementation. The use of alternate prices is not recommended by the Ontario General Contractors Association (OGCA) as it can open the outcome of the bid to manipulation by the owner.

Where Alternate Prices are used, it is recommended that the Instructions to Bidders identify that the contract will be awarded to the highest ranking compliant “base bid”, or alternatively the process by which the alternative prices will be applied against the base bid to achieve an adjusted bid price/time to determine the best value compliant bid should clearly spelled out.