The Risks of Low-Bid Options
blog/the-risks-of-low-bid-options
2025-07-02
When evaluating vendors or partners for a major project—especially something as complex as software implementation—it's tempting to lean toward the lowest bid.
On paper, it seems like a financially responsible decision. After all, who doesn’t want to save money?
Often times, however; low-cost bids comes with hidden risks that can derail projects, lead to unexpected expenses, and create stress for internal teams.
The truth is, the cheapest option rarely ends up being the cheapest in the end.
Why Can Low Bids Be Misleading?
Low bids may look appealing at first glance, but they often mask critical gaps:
Underestimated Scope: Vendors may intentionally or unintentionally underestimate the effort required, leading to change requests, scope creep, and ballooning budgets.
Lack of Change Management: Many low-bid proposals skip over or minimize change management—an essential part of successful implementation.
Inexperienced Delivery Teams: Some low-cost providers simply don’t have experience handling projects of a certain size or complexity. What works for a small business may fall apart in an enterprise environment.
Compressed Timelines: Unrealistically low hours often mean teams are stretched thin or corners are cut, which can compromise quality.
These risks aren't theoretical. We’ve seen them play out in real life.
A Real-World Example
Last year, we published a case study titled “The Real Price of Cheap Software Implementations”, where a client was evaluating two ERP implementation partners.
One presented a thoughtful, comprehensive bid. The other came in with a much lower price—but lacked the hours and detail needed for a successful delivery.
Our team actually had to intervene to encourage the low-bid vendor to increase their hours and budget to a realistic level—something that felt counterintuitive, but was absolutely necessary to protect the client.
Without this correction, the client could have been trapped in a drawn-out, frustrating implementation riddled with change requests and budget overages.
Key Takeaways
1. The Lowest Bid Isn’t Always the Smartest Choice
When the stakes are high, going with the cheapest option can cost you more in the long run.
Low bids often miss critical components, underestimate the true scope, or rely on overly aggressive timelines.
What looks like a cost-saving move upfront can quickly lead to change requests, budget overruns, and a messy implementation.
2. Choose Partners Who Plan for Reality
The most successful projects are backed by partners who truly understand your needs, scope the project accurately, and anticipate the challenges ahead.
A complete, thoughtful proposal will almost always deliver better outcomes than one that’s just trying to undercut on price.
3. Get a Second Set of Eyes
This is where having an unbiased third-party like Red Pill Labs can make a real difference.
Our role is to cut through the noise, pressure-test proposals, and advocate for your long-term success—not just your short-term budget.
A low price might win a pitch, but only a solid delivery wins the ROI, trust, and business outcome.
