Bidding Requirements

ACT 380

Objective

Provide an overview of the bidding process, including documents included in the bidding requirements

Major TopicsO The Bidding ProcessO Bidding DocumentsO Types of BidsO Bid SecurityO Bidder Qualification DataO Invitation to BidO Instructions to BiddersO Elements of a Bid FormO Information Available to BiddersO Preliminary Schedules

The Bidding Process (TBP)

O A basic principle of the process is that all bidders receive identical consideration and bid on an identical basis

O Owner –”Who will do this work for the least cost?”

O Contractor – “I will do the work for $xxxxx”

O See pg 6.11; Section 6.4 covers Bidding

(TBP) Bids vary because:

O Product costs vary among different suppliers

O Labor costs & time estimates varyO Prices vary from the subcontractorsO Labor rates vary with skill &

experienceO Overhead costs vary with composition

of work forceO Profit varies with bidder & other work

available

(TBP) Subcontractor Bids

O The subdivision of work will be accomplished by subcontractors which will submit their bids to the prime bidder

O The prime bidder will select the subcontractors on a competitive basis

(TBP) Plan RoomsO Sets of documents for use by

suppliers or subcontractors should be available in sufficient numbers and centrally located

O Often these documents are available at the A/E office

(TBP) Submission of Bids

O Time & date are set when the bids are invited

O Bids are typically delivered in a sealed envelope to the A/E’s or owner’s office

O Sometimes public project owner’s supply self-addressed, identical opaque envelopes that MUST be used for submitting the bid

(TBP) Time Limit for Bidding

O The scope & complexity of the project influence the length of time given for preparing bids

O A simple project may only allow 2 weeks

O Other factors:O Time needed to collect subcontractor

bidsO Urgency dictated by ownerO Time for settlement of questions &

discrepancies

(TBP) Time for Acceptance

O Bidder should be allowed to withdraw a bid before deadline to receive all bids – if after his/her bid is accepted then only if the owner consents may they withdraw the bid

(TBP) Bid DepositoryO Several states use this on publicly

funded projects – may be voluntary or mandatory

O Developed to improve the quality of bids & to reduce potential unethical bidding practices

O Significant units of work bid by subcontractors are deposited and either compared to the bids submitted by the contractor bids or “deposited” for these contractors to use as a reference

Bidding Documents (BD)

O These documents provide the necessary information that enable bidders to comply, understand, and follow stipulated requirements of the projectO Bid solicitationO Instructions to biddersO Information available to biddersO Bid forms & supplementsO AddendaO Contract formsO Conditions of the contractO SpecificationsO Contract drawings

(BD) Cross-Reference of Requirements

O Basic principle of stating things only ONCE in construction documents applies here as well

O e.g., Bid Security is referred to in the Bid Solicitation, but detailed requirements are found in Instructions to Bidders & Supplementary Instructions to Bidders

O Correct way to document is “as indicated in the [location of primary reference]”

Types of BidsO Stipulated Sum – usually requested

on architectural type of projectsO Cost-Plus FeeO Guaranteed Maximum PriceO Unit Price – usually used for civil type

projectsO Combined Bid – work divided into

phases

Bid Security (BSec)O This guarantees if a bid is accepted, the

bidder will enter into a formal agreement w/ the owner (typically 30-90 days from opening of bids)

O Selected bidder will furnish required construction performance & payment bonds – once done, they receive security back and are now considered the CONTRACTOR

O Purpose of the security is to compensate the owner for damages incurred if selected bidder doesn’t accept contract award

O If selected bidder accepts award, unsuccessful bidders receive their security back

BSecO Details should address:

O Required amount of security (stipulated sum or %)

O Form of security (cash, certified check, money order, bid bond)

O Length of time security will be retained

O Description of conditions under which security will be returned to unsuccessful bidders

O Description of conditions under which bid security will be forfeited

Bidder’s QualificationsO Owners may require bidders to

provide information related to their physical & financial ability to do the work

O AIA Document A305 (Contractor’s Qualification Statement) may be used

O Qualification information is CONFIDENTIAL

Bid SolicitationO Invitation to Bid – contain only

pertinent data that will help bidders decide if they are qualified to submit a bid

O See sample on page 5.8; fig 5.2-AO For public projects --- published as a

legal notice in designated publications or newspapers

O In private work the owner may send to a select few qualified bidders

Basic Information of Bid Invitation/Advertisement

O Project IdentificationO Description of WorkO Type of BidO Time of CompletionO Bid OpeningO Examination and Procurement of

DocumentsO Bid SecurityO Bidder’s QualificationsO Owner’s Right to Reject BidsO Laws & Regulations – nondiscrimination

in employment/wages laws

Instruction to Bidders (ItB)

O Provide more detail than the Invitation to Bid

O Basic information includes:O Documents – where available, cost, return

policyO Examination of Documents, Site & Local

ConditionsO Interpretations During Bidding –who to

send inquiries to; how replies will be provided (formatted as Addenda); time limits

ItBO Substitutions of Products – list

acceptable products or manufacturersO Type of BidO Preparation of Bid – forms to use & the

number of copies; required signaturesO Bid Security InformationO Performance & Payment Bond—in public

projects it is typical that each are equal to 100 % of the contract sum

ItBO Subcontractor ListingO Identification & Submittal of BidO Modification or Withdrawal of BidO Disqualification of BiddersO Applicable Laws – list federal, state, &

localO Licensing of contractors for special

requirementsO Permits for special constructionO Exemption from sales tax, if applicableO Local labor agreements

ItBO Pre-bid Meeting – location, time, who

can attend, if attendance is mandatory

O Liquidated damagesO Opening of BidsO Evaluation & Consideration of Bids –

owner’s right to reject all bidsO Execution of Contract

Bid Form (BF)O Prepared by bidder & submitted to the

ownerO Blank spaces are filled in by the bidder &

he/she signs (if corporation—their seal included)

O Bid form is bound into the project manualO See figure 5.2-C on pg 5.14 Note: this

example does not include everything that could be included in a Bid Form

Elements of a Bid Form (EBF)

O Project identificationO Name/Address of party to whom bid

is directedO Entity submitting bidO Acknowledgements –owner has right

to reject bids; bidder will enter into agreement if accepted; bidder examined site & is familiar with laws

EBFO Amount of time for the bids to be held

openO Identification of addendaO PricesO AlternativesO Allowances – cash & quantityO Combined bidsO Completion dateO Liquidated damagesO Supplements (Attachments) non-

collusion affidavitO Closing

Information Available to Bidders

O When provided…not part of the contract documents

O Often includes information related to subsurface, geotechnical reports, hazardous material reports, descriptions of the site or existing buildings, and property survey information

Preliminary SchedulesO When provided, is included as

advisory data onlyO Not part of the contract documentsO Does not replace requirements for

submission of a final schedule by the contractor