Every contractor has seen the number that makes the room go quiet. Two proposals are relatively close, and the third is 30 percent lower. The first reaction usually isn’t, “Great. We just saved a bunch of money.” It is something much more skeptical: What did they miss?
Maybe nothing. Maybe that contractor found a better approach, secured better pricing, or simply wants the work. But anyone who has been around construction long enough knows that a remarkably low number can also mean missed scope, bad labor assumptions, or a failure to appreciate what the job will actually require.
That familiar construction lesson is at the heart of Tennessee Attorney General issued Opinion No. 26-09 issued on October 14, 2026. The opinion addresses energy-related contracts with Tennessee local public entities, but its broader lesson for contractors is simple: your price tells the owner more than what you will charge. It can also tell the owner what you understand.
Under Tenn. Code Ann. § 12-4-110, these particular energy-related contracts to be awarded on the same basis as professional services. That leads to Tenn. Code Ann. § 12-3-1209, which provides that the selection must be based on “recognized competence and integrity” rather than competitive solicitation. The Attorney General concluded that does not make price irrelevant. A public entity can request and consider price, but it cannot simply turn the procurement into a lowest-price competition.
Here is where it gets interesting. The Attorney General reasoned that price itself can say something about competence. An unusually low price may suggest that the contractor does not fully understand the work or what it will take to perform it properly.
That makes sense in the real world. We have all seen a great-looking number become less attractive once someone starts asking questions. Did they carry the required phasing? What about supervision, escalation, temporary conditions, or schedule restrictions? Sometimes the low price reflects a real competitive advantage. Sometimes it reflects a problem waiting to be discovered.
For contractors, the takeaway is simple: your price needs to tell the same story as the rest of your proposal. If your proposal describes a complicated project requiring experienced people, careful coordination, an aggressive schedule, and significant risk, your number should reflect that understanding.
This is not really a change in Tennessee law. Earlier Tennessee guidance already recognized that price could play a role in professional-services procurement. Opinion No. 26-09 is better viewed as a useful clarification: qualifications-based procurement does not mean price-blind procurement.
So, back to that bid that came in 30 percent below everyone else. Maybe the contractor found a better way to do the work. But experienced owners and contractors know there is another possibility.
Maybe they missed something. But every price tells a story. Make sure yours tells the owner that you understand the job.
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