I registered as a bidder not knowing if I will bid or not, figured the experience will be worth it either way.

Remember some of these were before I won the bid; so there was no way I was going to fork out $350 for a house I have not even won yet.

They actually make money on materials, but they pay the installer at certain amounts of line item bids.

If you feel that the exterior even needs painting, Joe the Painter (assuming he has previous experience) can bid on that job along with other painters.  

You could lose control of expenses very quickly if you don't know where each dollar is supposed to go from the beginning.The lump sum he provided sounds more like an estimate and not an actual bid.

This means properties get bid up higher.

We had no plans to bid, just wanted to observe for our own education.  

I had them give me a bid for a house with a pier/beam foundation to replace some of the posts that were in disrepair.

I got a bid for work from a contractor who later offered to purchase the house.  

FMV is 450k, starting bid is 310k, just 3k is past due.