BCT 100

1. BCT 100 The Bid Documents Overview of the Construction Industry

2. Bid Documents Bid Document Sets Available to General Contractors and their sub contractors. Much of this is now done online. Plans can be posted a bid document management site for viewing.

3. Selecting the Contractor /Selecting the Project There are a variety of ways to select a contractor, and a variety of ways in which contractors obtain work. The type of delivery system, in part, defines the selection process.

4. Contractor Selection:Negotiated Select • The Design Team and the Owner will develop a list of pre-qualification criteria upon which to base a decision to enter into a contract. • Often, only one Contractor will be provided the bid package. (Or a very short preliminary list) • The selected Contractor, the Owner and the Architects will work transparently together to develop a fair price for the project. This will often include a guaranteed profit percentage for the Contractor. • Typically, all future billing will be completely transparent and open. All receipts are copied to the Owner.

5. Contractor Selection:Competitive Bidding • The Design Team will work closely with each of the competing bidders, answering questions and clarifying information • The bidders will be given individual tours of the site • Often bidders will raise valid questions which must be answered by the Design Team, often requiring new drawings be completed to adequately cover the issues • All information is shared with the other bidding teams so that each team is aware of all information discussed/ distributed. New drawings issued are called Addenda, or Addendums

6. The Bidding Process:Competitive Bidding • Instructions to Bidders • The Bid Package • Bidding Period • Base Bid, Alternate Bid, and Unit Pricing • Bid Bond • Bid Deadline: FIRM • Opening of Bids and Determining Apparent and Actual Low Bidder

7. Qualifying the Bid:Competitive Bidding • The Design Team will review the bids from all those who submitted, and will often question the bidders as to their understanding of the documents. • The Design Professional may confirm with the Bidder any items on the bid which appear out of order, or incorrect, in order to ensure that a mistake or omission has not occurred. • It is the bidder’s responsibility to ensure that his bid is accurate and complete. • Owner’s generally do not want to take on a Contractor who has greatly miscalculated the cost of the project, as they will default, or manufacture Change Orders to make up the difference.

8. Awarding the Job:Competitive Bidding • The Design Team will review the bids, once all questions have been answered, with the Owner, and will most likely make a professional recommendation. • Public Work: The Owner typically must select the lowest ‘qualified’ bidder, unless other qualifications for selection have been articulated in the RFP (Request for Proposals). Recently CMGC contracts are awarded on qualifications, or points. Price may be just one category for which points are awarded. • Private Work: The Owner may select any of the bidders they care to select, based upon any criteria they choose to use. For this reason, GC’s often want to know who they are bidding against.

9. To Bid Or Not To Bid The General Contractor will invest a lot of time, effort and money into bid preparation. The decision to bid on a project is not one taken lightly. A General Contractor may win only 20 – 30% of the contracts upon which bids were prepared and submitted. Understanding which projects to bid on is often the difference between a successful contractor and a bankrupt contractor.

10. Bid Preparation:To Bid Or Not To Bid Considerations will include, at a minimum: • Probability of Getting the Job • Availability of the Firm • Size of the Project • Location of the Project • Type of Project • Available Personnel • Capital Requirements • The Competitive Environment • Reputation of the Architect • Fair Bidding Procedure • Award to the Low Bidder

11. Bid Preparation:Sub Out vs. Self Perform Sub Contracted Work VS Self Perform. Questions the company must ask themselves on each project. • Can you REALLY do it cheaper • Do you have the expertise • What risk is involved in the Self Perform • Is the Sub Contractor reliable and effective • Are there other benefits to one option over another • Can you combine some work into other packages of work you are already performing, reducing cost • Can you combine the work into another subcontract and get a better overall price • Do you have adequate supervision available to do self-perform, or does that additional cost make it unreasonably expensive

12. Bid Preparation:Deciding Who Bids WhatWho is Responsible for What Scope? • Review past Work Package Descriptions Job by Job • Is this job different than the past? What worked on one project may not be efficient or effective for the next. • Combining some tasks to be done by a particular crew may make sense in order to clearly identify responsibility if an overall ‘system’ fails. Avoid finger pointing by dealing with the issue ahead of time. EXAMPLE: Exterior Paving Mason responsible for substrate installation and grading of exterior courtyard. Avoid settlement issues and drainage issues.

13. Bid Preparation:Questioning Potential Subs Along with confirming the appropriate scope of work has been accommodated in the pricing: • Have the LATEST drawings been reviewed • Do they include all these revisions in their price • Have them sign a list of dated drawings • Does the bid include/exclude any tax. • Can they confirm the project schedule/window for work is included in the bid • Are there any exceptions being taken from the scope of work • Have they assumed any substitutions in their bid Make them identify these. Don’t allow them to assume that their interpretation of ‘better or equal’ will be accepted by an architect or engineer, or by the GC.

14. Bid Preparation:Questioning Potential Subs • Particularly, if separate sub contractors are bidding mechanical and electrical, it is important to review for overlap in bids, and gaps. • Review the specifications for these scopes for the above • Will the electrical sub provide power for the site and all parties • Will the electrical sub provide power to the GC trailer • Are all permits included for electrical work • Are starters for mechanical equipment in the mech sub bid or elect sub bid • Who does trenching, is it included or excluded for all trades

15. Bid Preparation:Questioning Potential Subs • Do trades do cutting an patching on their own, or is this performed by the GC • Who is responsible for completing fire safe penetrations • Who installs blocking in walls for towel bars, lighting, picture hangers, etc. • Misc concrete work required. Is it in bid. Is it needed. Should it be in the GC’s scope • Trash and Recycling requirements. • LEED or other requirements in gaining LEED points. Upon CONFIRMATION OF EACH , Acknowledge that these accommodations have been priced into the bid.

16. Bid Preparation:Additional Variables • Owner has the right to assign separate contracts, and GC must work this into the schedule • Temporary light and power • Utilities • Permits • Inspection • Warranties and Guarantees. • Job Site Cleanup • Site Cleaning • Communication methods required • Lien Waivers/ Retainage terms • Purchase Orders • Storage

17. Bid Preparation:What Are We Estimating? An accurate idea of the cost of the project • Estimating Materials What are the materials, and what are the quantities • Estimating Labor The number and type of workers required • Estimating Equipment The number and type of equipment needed to do the work • Estimating Time Length of time for tasks affects labor costs, and overall length of time affects overhead costs • Estimating Overhead Costs Project Site Overhead and Home Office Overhead • Estimating Risks / Unknowns

18. Bid Preparation:Types of Estimation Types of Estimates • Approximate Estimates Rough estimate prepared to obtain approximate cost • Detailed Estimates Determine actual quantities and all costs associated for completion of the work Methods • Unit Cost Method Based upon a unit of measure, per linear foot, per square foot • Total Cost Method Include Materials, Labor, Equipment, Overhead, Profit

19. Bid Preparation:Who Prepares the Estimate? An Estimator: • Reads and Understands Architectural Drawings • Has a good knowledge of building materials and construction methods • Has a consistent method for preparing an estimate • Learns from each job, and maintains a database of costs from project to project • Is well organized, and is accurate • Is a good with data analysis • Is creative in interpreting drawings and considers alternatives

20. Bid Preparation:Basic Steps in Estimation An Estimate is based upon data analysis, and: • Taking off quantities Quantity takeoff is the measurement from the drawings to determine quantities required. EX: How many linear feet of concrete foundation wall • Squaring out Calculating volumes and areas and putting them into the agreed units of measure • Abstraction Applying the measurements to a pricing matrix and applying pricing information

21. Bid Preparation:Cost Codes and Databases Job Costing Analysis and Database Maintenance • Which came first, the chicken or the egg? • Which came first, the estimate or the database? • On each project, the personnel on the job record the hours required for each specific task. • This tracking allows the project manager to keep an eye on cost and schedule, to complete on time • This tracking also creates a database of information from past projects, on how much things actually cost, so when estimating a future project, there is a basis upon which an estimate can be founded.

22. Bid Preparation:Modes of Estimation Job Costing Analysis, Database Maintenance, and Unit Costs are one important way of estimating costs Another is Conceptual Estimating. Conceptual Estimating is what is commonly referred to as ‘Ballpark’ Estimation. A Conceptual Estimate is based upon an overall understanding of how much a particular thing costs, and comparing what you have, to what you understand. EXAMPLE: High end residential runs around $300 per square foot in this area, and we have approximately 5500 square feet, so we’re in the ballpark of $300 x 5500 sq ft = $1,650,000

23. The Contract Documents Regardless of the manner in which the contract is awarded, the documents are the same: • The Owner / Contractor Agreement • The General Conditions • The Supplementary Conditions • The Bid Set Drawings • The Specification • The Addenda

24. The Contract Documents After the signing of the contract, the Contract Documents also include modifications to the documentation as the job proceeds: • Bulletins and Amendments • Change Orders • Written Interpretations • CCD = Construction Change Directives

25. The Contract Documents • The Contract Documents include any and all documents supplied to the contractor, including the Bidding Requirements, Contract Forms, Contract Conditions, Technical Specification, Bidding Documents (Project Manual, Construction Drawings, Addenda), and Contract Documents including changes made after signing of contract

26. Contract Documents • Building Sections and Roof Plan

27. Certificate of Liability Insurance

28. Sample Specification • Page 1 of 4

29. Sample Addendum

32. NOT Contract Documents • Bidding Instructions or Documents • The Contractor’s Bid • Shop Drawings • Product Data • Samples • Submittals

33. ALSO NOT Contract Documents • Correspondence, transmittals, unsigned change orders, insurance policies, surveys, soil tests, material and lab tests, purchase orders, schedule of values, payment requests, rfi’s, photos, permits, codes, zoning regs. However, these are all still legal documents that may be used as evidence

34. Meanwhile, in the Architect’s Office • Reviewing all of the Bids, attempting to compare apples to apples • Finalizing outstanding incomplete or unfinished details for submission as a BULLETIN • Working on last minute changes requested by the Owner during the bidding process • Modifying documentation to conform with requirements from regulatory agents

35. Dubious Activities and Failed Business Ethics • Dubious Practices do exist • Avoid Relationships with Unethical Players • Vet those you work with (and work for) • Beware the slippery slope of unethical conduct • Avoid APPEARANCE Of Impropriety

36. What is a Kickback? • The Award of Contracts and Sub-Contracts is perhaps the most vulnerable stage of the construction process, when ethical conduct may be compromised. • Fees and Rewards paid to the GC in exchange for award of the job is unethical and illegal. • There can be no: Quid Pro Quo

37. What is a Kickback? • Quid Pro Quo: “something given or received for something else; also: a deal arranging a quid pro quo “ -Merriam – Webster dictionary

38. Buying Out the Job:Getting The Thing Off The Ground • Bid Review and buying out / reward of Sub-Contracts by the General Contractor • Begin work on REALLY defining Allowances and Alternates (BOTH the money and the schedule) • Clarify outstanding information with the Design Team (Begin the RFI Process in Full)

39. Buying out the Job • Review the schedule with each sub-contractor individually and provide them with their own individual schedule and requirements. Customize for Each Sub, then, • Make it a part of their contract • NOTE: Same conditions/restrictions that apply to the GC can and should apply to all sub contractors. ‘Pass-through’

40. Improving the Schedule • What does your Subcontractor recommend in terms of required time for given tasks? • What does your past experience tell you? • What can similar jobs tell you?

41. A Sample Schedule: Task ID, Task, Durations, Start and Finish Dates, Gantt Chart

42. Project Schedule / Master Program

43. Critical Path, Milestones, and Float

44. Award of the Project • Contractor development of Schedule of Values for submission to the Architect and the Owner • These will be used to determine payment. Percentages of completion/delivery on site will be assessed by the Architect and paid according to the line items presented on the Schedule of Values

45. Schedule of Values

46. Regulatory Review:Plans Examination • Preliminary Regulatory Review may have included public meetings, Zoning review,etc. • Plans examination regulatory agencies will specify for the Design Team what information they require, and in what format that information should be presented. • The Design Team will follow these instructions to the letter. No missing info. No extra info. • The representatives of the agency may request additional information. They may demand alterations to the design to meet code requirements. • The agency may be quite helpful. The agency may be very difficult to work with.

47. Next: GETTING STARTED • Preconstruction Job Conference • Site Setup • Building Permit Process / Finalization and Collection • Utilities: Temporary and Permanent • Site Access End of Presentation