Multiple Bid Fair Price Range Calculator
Enter up to 10 contractor bids to calculate the statistically fair price range, identify outliers, and determine a recommended budget target.
Formulas Used
Quartiles: Q1 = 25th percentile, Q2 = 50th percentile (median), Q3 = 75th percentile using linear interpolation.
Interquartile Range (IQR): IQR = Q3 − Q1
Outlier Fences: Lower = Q1 − (k × IQR), Upper = Q3 + (k × IQR), where k = sensitivity multiplier (default 1.5).
Valid Bids Mean (μ): μ = Σ(valid bids) / n
Standard Deviation (σ): σ = √[ Σ(xᵢ − μ)² / n ]
Fair Price Range: [max(validMin, μ − σ), min(validMax, μ + σ)]
Recommended Target: 0.6 × median + 0.4 × mean (of valid bids)
Budget with Contingency: Target × (1 + contingency% / 100)
Coefficient of Variation: CV = (σ / μ) × 100%
Spread: ((max − min) / min) × 100%
Assumptions & References
- The IQR method for outlier detection is the industry-standard approach used in competitive bidding analysis (Tukey, 1977).
- A 1.5× IQR multiplier is the standard threshold; 1.0× is stricter, 2.0× is more permissive.
- The recommended target uses a weighted blend (60% median, 40% mean) to balance resistance to outliers with overall market data.
- Standard deviation range (μ ± σ) captures approximately 68% of a normal distribution, representing the statistically "fair" zone.
- Contingency buffer follows construction industry best practices: 10–15% for well-defined scopes, 15–25% for complex projects (AACE International).
- A Coefficient of Variation (CV) above 20% indicates high bid disparity and warrants scope clarification with contractors.
- A spread above 25% between the lowest and highest valid bids suggests inconsistent scope interpretation.
- All bids are assumed to cover the same scope of work. Bids with different inclusions/exclusions should be normalized before entry.
- Reference: Construction Industry Institute (CII) — Competitive Bidding Best Practices; RS Means Cost Data.