Allowances and alternates: where bids hide risk

A bid can be complete, honest, and still leave you exposed — through allowances and alternates.

Allowances

An allowance is a placeholder for scope that is not yet selected: flooring, lighting, appliances, landscaping. The contractor carries a number. If your actual selection costs more, you pay the difference plus markup.

**What to check:** - Is the allowance a realistic price for what you actually intend to buy? - Does it include installation, or material only? - Is markup applied to the overage, and at what rate? - When must selections be made to avoid a schedule impact?

Low allowances make a bid look competitive and are one of the most common reasons a final cost exceeds the contract sum.

Alternates

An alternate is priced scope you may accept or decline. Useful for managing budget — dangerous when the base bid quietly excludes something you assumed was included.

**What to check:** - Does the base scope function without the alternate? - Is the alternate price valid for a defined window? - Does accepting it change the schedule?

The practical fix

Before comparing bids, build a levelling sheet: one row per allowance and alternate, one column per bidder. The lowest bid frequently stops being the lowest bid once every placeholder is priced at what you actually intend to spend.