Suicide bidding is a response to a tendering exercise in which a potential supplier, anxious to win business, submits a proposal to carry out the work for less than it will cost.
These procurement processes are typically modelled as reverse sealed-bid auctions with the lowest bid winning.
[1] The motive for such bidding is to keep the company's skilled labour employed, even if the project only breaks even or makes a loss.
[5] 2010 survey by the Chartered Institute of Building found that 82% of respondents believed that “suicide bidding” existed within the industry.
[3] The Civil Engineering Contractors Association acknowledged that the practice had become "rife" in the desperate competition for work during the late-2000s recession, but blamed the public sector procurement process for focussing on the lowest price rather than best value.