FHWA treats the spread between the low bid and the engineer's estimate as a formal review trigger on federally funded highway work. It generally considers competition strong when six or more bids land within 20% of the low bid. A wide spread between the low and second bidder can flag a busted bid (a real pricing mistake) just as easily as it can flag a genuinely lower-cost contractor. That is why many owners reserve the right to question, or even reject, a bid that comes in unusually far below the rest of the field.
For a contractor building pricing strategy, bid spreads on comparable past projects are a reliable way to calibrate a number. Historical bid tabs are the raw material for this analysis. Nonlinear surfaces those patterns from public bid records: how a given contractor, or a market as a whole, has typically spread against the engineer's estimate on comparable scopes.
