Bidding Requirements

1. Bidding Requirements ACT 380

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

3. Major Topics • The Bidding Process • Bidding Documents • Types of Bids • Bid Security • Bidder Qualification Data • Invitation to Bid • Instructions to Bidders • Elements of a Bid Form • Information Available to Bidders • Preliminary Schedules

4. The Bidding Process (TBP) • A basic principle of the process is that all bidders receive identical consideration and bid on an identical basis • Owner –”Who will do this work for the least cost?” • Contractor – “I will do the work for $xxxxx” • See pg 6.11; Section 6.4 covers Bidding

5. (TBP) Bids vary because: • Product costs vary among different suppliers • Labor costs & time estimates vary • Prices vary from the subcontractors • Labor rates vary with skill & experience • Overhead costs vary with composition of work force • Profit varies with bidder & other work available

6. (TBP) Subcontractor Bids • The subdivision of work will be accomplished by subcontractors which will submit their bids to the prime bidder • The prime bidder will select the subcontractors on a competitive basis

7. (TBP) Plan Rooms • Sets of documents for use by suppliers or subcontractors should be available in sufficient numbers and centrally located • Often these documents are available at the A/E office

8. (TBP) Submission of Bids • Time & date are set when the bids are invited • Bids are typically delivered in a sealed envelope to the A/E’s or owner’s office • Sometimes public project owner’s supply self-addressed, identical opaque envelopes that MUST be used for submitting the bid

9. (TBP) Time Limit for Bidding • The scope & complexity of the project influence the length of time given for preparing bids • A simple project may only allow 2 weeks • Other factors: • Time needed to collect subcontractor bids • Urgency dictated by owner • Time for settlement of questions & discrepancies

10. (TBP) Time for Acceptance • 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

11. (TBP) Bid Depository • Several states use this on publicly funded projects – may be voluntary or mandatory • Developed to improve the quality of bids & to reduce potential unethical bidding practices • 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

12. Bidding Documents (BD) • These documents provide the necessary information that enable bidders to comply, understand, and follow stipulated requirements of the project • Bid solicitation • Instructions to bidders • Information available to bidders • Bid forms & supplements • Addenda • Contract forms • Conditions of the contract • Specifications • Contract drawings

13. (BD) Cross-Reference of Requirements • Basic principle of stating things only ONCE in construction documents applies here as well • e.g., Bid Security is referred to in the BidSolicitation, but detailed requirements are found in Instructions to Bidders & Supplementary Instructions to Bidders • Correct way to document is “as indicated in the [location of primary reference]”

14. Types of Bids • Stipulated Sum – usually requested on architectural type of projects • Cost-Plus Fee • Guaranteed Maximum Price • Unit Price – usually used for civil type projects • Combined Bid – work divided into phases

15. Bid Security (BSec) • 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) • Selected bidder will furnish required construction performance & payment bonds – once done, they receive security back and are now considered the CONTRACTOR • Purpose of the security is to compensate the owner for damages incurred if selected bidder doesn’t accept contract award • If selected bidder accepts award, unsuccessful bidders receive their security back

16. BSec • Details should address: • Required amount of security (stipulated sum or %) • Form of security (cash, certified check, money order, bid bond) • Length of time security will be retained • Description of conditions under which security will be returned to unsuccessful bidders • Description of conditions under which bid security will be forfeited

17. Bidder’s Qualifications • Owners may require bidders to provide information related to their physical & financial ability to do the work • AIA Document A305 (Contractor’s Qualification Statement) may be used • Qualification information is CONFIDENTIAL

18. Bid Solicitation • Invitation to Bid – contain only pertinent data that will help bidders decide if they are qualified to submit a bid • See sample on page 5.8; fig 5.2-A • For public projects --- published as a legal notice in designated publications or newspapers • In private work the owner may send to a select few qualified bidders

19. Basic Information of Bid Invitation/Advertisement • Project Identification • Description of Work • Type of Bid • Time of Completion • Bid Opening • Examination and Procurement of Documents • Bid Security • Bidder’s Qualifications • Owner’s Right to Reject Bids • Laws & Regulations – nondiscrimination in employment/wages laws

20. Instruction to Bidders (ItB) • Provide more detail than the Invitation to Bid • Basic information includes: • Documents – where available, cost, return policy • Examination of Documents, Site & Local Conditions • Interpretations During Bidding –who to send inquiries to; how replies will be provided (formatted as Addenda); time limits

21. ItB • Substitutions of Products – list acceptable products or manufacturers • Type of Bid • Preparation of Bid – forms to use & the number of copies; required signatures • Bid Security Information • Performance & Payment Bond—in public projects it is typical that each are equal to 100 % of the contract sum

22. ItB • Subcontractor Listing • Identification & Submittal of Bid • Modification or Withdrawal of Bid • Disqualification of Bidders • Applicable Laws – list federal, state, & local • Licensing of contractors for special requirements • Permits for special construction • Exemption from sales tax, if applicable • Local labor agreements

23. ItB • Pre-bid Meeting – location, time, who can attend, if attendance is mandatory • Liquidated damages • Opening of Bids • Evaluation & Consideration of Bids – owner’s right to reject all bids • Execution of Contract

24. Bid Form (BF) • Prepared by bidder & submitted to the owner • Blank spaces are filled in by the bidder & he/she signs (if corporation—their seal included) • Bid form is bound into the project manual • See figure 5.2-C on pg 5.14 Note: this example does not include everything that could be included in a Bid Form

25. Elements of a Bid Form (EBF) • Project identification • Name/Address of party to whom bid is directed • Entity submitting bid • Acknowledgements –owner has right to reject bids; bidder will enter into agreement if accepted; bidder examined site & is familiar with laws

26. EBF • Amount of time for the bids to be held open • Identification of addenda • Prices • Alternatives • Allowances – cash & quantity • Combined bids • Completion date • Liquidated damages • Supplements (Attachments) non-collusion affidavit • Closing

27. Information Available to Bidders • When provided…not part of the contract documents • Often includes information related to subsurface, geotechnical reports, hazardous material reports, descriptions of the site or existing buildings, and property survey information

28. Preliminary Schedules • When provided, is included as advisory data only • Not part of the contract documents • Does not replace requirements for submission of a final schedule by the contractor