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14 Cards in this Set
- Front
- Back
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Why Bid? |
Profits Need to establish or maintain relationship with a new client Unusual project to add variety to the portfolio High publicity probability or benefits to the community |
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Factors That Makes One Company Succeed Over Another
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Relationship with key subcontractors Expertise in the type of project Estimating capability Project team set-up Safety record Ability to work efficiently Overhead costs |
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Elements of a Bid |
Estimate Solicit prices from a number of subs Subs perform material takeoffs from the drawings and specifications that result in the quantities required on the job. These quantities are then multiplied by the unit cost. The unit cost is established by talking with vendors and suppliers Direct cost + Indirect costs = Cost of the work Cost of the work + % of overhead and profit = Total cost to the owner |
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Bidder Qualification Process |
Two methods Pre-bid Requires the interested contractor to submit information about the firm before the bid documents are released. This is done while contract documents are being finalized to save time. Advantages of prequalifying bidders When the bids are received, the lowest bidder can be selected. Saves time and potential disputes from disqualified bidders after the bid based on financial or technical abilities |
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Pre-Bid Qualification |
Even with the prequalifying process, bidders can be disqualified. How? Not following the terms of the contract documents Offering material or methods that are different from what was expectedTypically between five and seven bidders for each major trade, but no less than three |
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Work Packages |
One of the advantages of Construction Management delivery method is the ability to package the work to the best advantage of the project in terms of price and efficiency It also allows fast tracking of the work so the parts of the project can be bid and started before the entire design package is assembled Even if the project is completely designed before it is bid, there are number of advantages to breaking the project into various work packages. |
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Advantages of Work Packages |
Allows for the incorporation of local practices Packaging work reduces overhead: The more packages, the fewer markups. Requires that a large number of subcontractors must be managed directly. Too little layering of subs affects both price, time, and quality of the project Subs may be contracted directly to either the owner or CM . In either case, the owner is involved in the selection process |
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Disadvantage of Work Packages |
Omission of responsibilities resulting in change orders or a dispute Drilling cores to run conduits Patching after the conduit is run Furnishing scaffolding to multiple trades Clean upRedundancy of work - Two or more trades may end up with part of the same scope Mechanical contractor has control wiring as well as the electrical contractor Disadvantages of Work Packages Poor Coordination Improper packaging of work – If the work is not bid properly, there might be little interest or the bids will come in high. The CM must package the work correctly Breaking work packages into individual bid packages is best done by CMs |
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Construction Documents |
Translates owner needs for the contractor Communication link among all parties in the project All narrative information is packaged with drawings in one binder (or several binders) to make up a complete package Construction Documents (Continued)Package is divided into three general sections Bidding Contractual Technical |
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Bidding Information |
Invitation to bid - Is the request for pricing. The owner usually prepares it with the help of the CM or designer. It includes information that is relevant to the project The type of project The size of the project The location of the project Bid due date Start and completion dates Bonds Document location Legal requirements Instruction to the bidders Bid due date Instructions about filling out the form Places to indicate fees for additional work Unit Prices Location to deliver the bid Method of awarding the bids Expected dates of awards and start of the project Bid form Name of the contractor Price Price breakdown for the major trades Amount of the bond Alternates (materials or altered scope of work Fees for additional work Unit pricing if quantities are unclear Time required for the job Acknowledgement of receipt of all addenda issued after the bids have gone out Key Subs Signature, title, and date Alternates – An alternate is a request for a price for substituting one material for another, for adding to the scope of work, or for deducting from the scope Two ways to present alternates Additive price. This is the best method for the owner since it is priced as a new item. This brings in a better price. Deductive price. Might leave some of the cost in the price. Designers prefer this because they can produce a complete set of documents that can then be deducted from more easily. Addenda – After the documents are issued but before the bids are due, changes often need to be made. The most common reason is to correct mistakes in the bidding documents. Contractors really study the drawings and often find things that are missed by designers or drafters Contractor may propose a better method Owner may generate additional requests. Sometime addenda simply completes documents that had to be sent out before being totally complete |
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Contractual Information |
Agreement General Conditions Special Conditions Bonds Insurance Agreement Identification of the parties Description of the project and the work Start date Substantial completion date Liquidated damages Agreement (continued)The contract sum Progress payments Interest rates Retainage Final Payments Enumeration of contract drawings General Conditions Special Conditions Bonds Bid Bonds Performance Bonds Payment Bond Insurance Worker’s Compensation Comprehensive Liability Builder’s Risk |
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Technical Information |
Drawings. Specifications Design specifications Performance specifications Proprietary specifications Open Specifications |
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Analysis of Bids |
The bids are tabulated in a spreadsheet. The owner and CM must evaluate the assumptions and make sure that they are reasonable. If bidders provide pricing that is outside the plans and specifications, the project needs to decide how to handle this. If the bidder who is low, even without an alternative, suggests an equal to or better alternate that makes him even lower, the owner has the option of accepting If the bidder who is not low provides an unequal but acceptable alternate that then makes him low, the owner has the option of giving the other bidders the opportunity to bid this alternate as wellIf the bidder who is not low and won’t ever be low suggests an acceptable alternative, the owner has the option of having the low bidder price this alternate |
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Award of the Contract |
The owner has the right to reject or accept the bids In most cases, a project does not get bid if the estimates are higher than the money available to complete the project If the bids are higher, the normal procedure is to redesign or reduce scope Redesigning is time consuming, however, so the owner may elect to work with the bidder to bring down the price through value engineering, cost cutting, or scope reduction Once the bid is accepted, the contract negotiations begin. This is a straight forward process since the contractor has already seen the contract. While negotiations are ongoing, the owner may send a letter of intent which states a specific time period, methods of payments, and conditions of termination if the negotiations fall through. |
