CASE STUDY
The SR100M Lowest Bidder Trap
How a government agency lost 50% of project value by choosing the
cheapest contractor—and how financial analysis could have prevented it
The Vision: Modernizing City Infrastructure
AMBITIOUS PROJECT
A government agency launches an ambitious $200M transportation hub project to modernize city
infrastructure and boost economic development. Five major contractors compete for the prestigious contract.
The Fatal Choice: Lowest Bidder Wins
COST FOCUSED
Company A wins with the lowest bid, beating Company B by just 8%. The decision seems fiscally responsible
—save taxpayer money and deliver infrastructure on budget.
The Red Flags (Overlooked)
The Collapse: Project Stops Mid-Construction
CRITICAL FAILURE
Within six months, Company A's financial instability becomes catastrophic. Construction halts mid-project,
labor strikes emerge, and the agency is forced to re-tender the entire project.
