Construction Program Guide
Additive (or Deductive) Alternate Bidding
Additive alternate bidding is a technique used by owner-agencies to achieve the maximum project scope within an available budget. Under this procedure, the owner-agency defines its critical project scope components as the 'base' and defines specific additional components as 'alternates' which will be added to the base in a pre-defined order to establish the low bid. The contract will be awarded to the bidder providing the maximum scope within the budget.
While this alternative bidding method is considered to be non-traditional, when implemented in a fair and transparent manner, it is consistent with the competitive bidding principles in 23 U.S.C. 112, and therefore, does not need SEP-14 approval.
The owner-agency must clearly define the priority order in which the alternatives will be considered and added to the base. Some owner-agencies identify the available budget in the bid documents while others do not. Additionally, the bid documents may establish whether the bid prices for unselected alternatives will apply should the owner-agency receive additional funds for the contract.
For a deductive alternate contract, the predefined alternate packets will be deducted from the base in a predefined order to result in a contract that fits the budget.
Authority/Legal Basis
Laws
Regulations
Policy
- Section III.B.8.c.iv.b) 4) of the FHWA Contract Administration Core Curriculum Manual summarizes the FHWA's policies and provides general guidance on the use of Additive or Deductive Alternates.