Transportation Estimating Improvement Conference 2011: Enhancing Bid Letting and Justification Practices

1. Estimating Update Transportation Improvement Conference 2011 Christine Krall, P.E.

2. Bid Letting Review • FHWA guidelines: 50% of estimates should be within 10% of low bidder • 29% of estimates were within 10% of low bidder in fiscal year 2010 • 32% of estimates were within 10% of low bidder in fiscal year 2009

3. Justification Letters • Designers are asked to justify estimates when estimate falls outside of 10% range • Justification is also needed for the governor’s approval when estimate is 5% low • Want designer’s perspective on estimate • Use justifications to: • Review project • Review trends in monthly letting • Review estimating resources used by designer

4. Justification Letter Questions • What is your reasoning the total bid price is lower than the project estimate? • Why are significant bid items different than the estimate? What is unique about these items? • What specific adjustments could you have made to the estimate to be more accurate? • Are the plan quantities accurate on items where the engineers estimate and the bid prices vary significantly? • What tools or sources did you use to determine the estimate prices? • What tools/data sources/resources could the department provide to help you create more accurate estimates?

5. Unbalanced Bid Analysis • Analysis is performed • when department becomes aware of an quantity error in bid document • significant item to the contract is significantly unbalanced • If the project is determined to be materially unbalanced, the contract will be rejected and relet a minimum of two months later • Designer’s should submit an addenda when quantity error is noted to avoid an unbalanced bid (Call Bill McNary or Jan Kinar to discuss individual project issues)

6. Addenda • Required to change bid letting documents after advertisement • Submit addenda as early as possible (submit by 8am two Thursdays before the bid letting) • Review addenda for accuracy and completeness before submitting • March 2011 stats • 43 addenda issued • 4 proposals each had three addenda • 3 emergency addenda issued (6 in February)

7. Mobilization • Mobilization revision in ASP 6 • No change from past payment schedule if mobilization as a percentage of original contract amount is less than or equal to ten percent • When mobilization exceeds ten percent of the original contract amount, mobilization will be paid according to WS 6191 • http://roadwaystandards.dot.wi.gov/standards/cmm/forms/ws6191.xls

9. Mobilization Stats • Mobilization Statistics for CY 2005-2010 • 56% of projects mobilization between 0-5% • Under 10% for 85% of projects • Under 20% for 98% of projects • Summary of mobilization by work class breakdown • Mobilization is the most justified item in estimate • Mobilization is generally estimated too high

10. Mobilization

11. Steel Price Adjustment Index • Steel price adjustment added to contracts with more than 50,000 pounds of structural steel • Added by special provision • Paid for using item 801.0910 Steel Price Adjustment • Payment based on bid letting and mill shipment dates • Monthly index numbers located on HCCI website

12. Questions or Comments Christine Krall, P.E. Estimating Engineer Christine.Krall@dot.wi.gov 608.266.9626