On federally funded highway work, FHWA guidance calls for the engineer's estimate to be accurate enough that it lands within plus or minus 10% of the low bid on at least half of awarded projects. Bids that stray far from the estimate, in either direction, trigger closer review, partly as a guard against collusion or bid-rigging. Competition is generally considered strong when six or more bids fall within 20% of the low bid. Thin competition or a wide spread from the estimate can be grounds for an agency to reject all bids and re-solicit. Many agencies keep the engineer's estimate confidential until after bid opening so bidders price against their own costs rather than anchoring to the agency's number. Historical bid tabs (what agencies actually awarded relative to their engineer's estimate on comparable scopes) are a useful input for calibrating a new number rather than pricing in a vacuum. Nonlinear surfaces those patterns from public bid records so a contractor can use them when building a bid.
Knowledge Base
What is an engineer's estimate?
An engineer's estimate is the owner's or designer's own projected cost for a public works project, prepared before bidding and used as the baseline for judging whether the bids that come in are reasonable.
