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ACH 231 Lecture 07 (Contract Documents) Part 2
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ACH 231 Lecture 07 (Contract Documents) Part 2

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  • 1. Contract Documents Parts of Construction Documents The Bidding Process & Requirements Construction Contracts- AIA Family of Documents
  • 2. PART 2 The Bidding Process & Requirements
  • 3. BASIC PRINCIPLE: ALL BIDDERS RECEIVE IDENTICAL CONSIDERATION AND BID ON AN IDENTICAL BASIS.
  • 4. The Bidding Process
    • Bidding is the process of securing official, legally enforceable costs or prices from general contractors, sub-contractors and vendors/suppliers.
    • Competitive bidding is a method of determining the least cost for accomplishing work defined by the contract documents.
    • Bids are prepared confidentially by each bidder (general contractor) and are sealed and submitted to the owner to be examined and compared in competition with one another.
  • 5. The Bidding Process
    • Before bids can be submitted, prospective bidders must be made aware of the project and sufficient data must be furnished for them to determine the requirements for the project.
      • Specific information needed:
        • Compliance with required bidding procedures
        • Understanding of bidding and awarding requirements
        • Following the intent of the construction documents
        • Submitting bids that will not be disqualified for technicalities
        • Understanding conditions that apply after the bid submittal and prior to contract award.
  • 6. The Bidding Process
    • The contractor’s bid price is comprised from the following:
      • Quantity-takeoff
      • Unit pricing
      • Labor to perform work
      • Sales tax
      • Overhead & profit
      • Commissions (if applicable)
  • 7. The Bidding Timeline (in a NUT SHELL)
    • The project is but out for solicitation by architect on owner’s behalf
      • Invitation to Bid
    • Contractors obtain Construction Documents
      • drawings, specs and project manual
    • Contractors will:
      • Review docs and familiarize themselves with project
        • Send RFI’s (Request for Information) on unclear items
      • take-off quantities of material from drawings
      • refer to spec for material/product info and compliance
      • gather unit prices from suppliers
      • solicit to subcontractors for bids on portions of work
  • 8. The Bidding Timeline (in a NUT SHELL)
    • Addenda may be issued to clarify or correct issues brought forward by contractor (or A/E, Owner)
    • Once all estimating is completed and sub-c bids are gathered, information is put into a form
      • Form is broken down into CSI MasterFormat 16-Division format
        • May be further broken down by section
        • Includes quantities, unit prices and labor costs or
        • lump sum bids from subcontractors
      • Then sum of all Division costs are calculated
      • Additional costs are included (OH & P, sales tax)
      • RESULT is Total Bid to Owner
  • 9. The Bidding Timeline (in a NUT SHELL)
    • Then Bid is sent to Owner
      • Could be open or closed bid
    • Owner will review bids with architect
    • Owner will select bidder and send “Letter of Intent”
      • Modifications may be issued to further clarify issues
        • Results in a change to the contract price
    • Owner and Contractor review contract and sign agreement
    • CONSTRUCTION COMMENCES!!
  • 10. THE BIDDING REQUIREMENTS
    • Invitation to Bid
    • Instructions to Bidders
    • Information Available to Bidders
      • Preliminary Schedule
      • Geotechnical Information
      • Existing Conditions Documents
    • Bid Forms and Attachments
    • Bid Security Forms
  • 11. Bidding Requirements INVITATION TO BID
    • Intention to attract qualified bidders to furnish a price
    • Help prospective bidders decide whether to bid on project
    • Should be brief, simple and to the point
      • Should not contain detailed requirements or instructions
      • Should not contain irrelevant information
  • 12. Bidding Requirements INVITATION TO BID
    • Should always be in writing containing the following information:
      • Project Identification
        • Project name
        • Site address
        • Project Number (if applicable)
      • The INVITER (entity that is requesting bid, usually the owner or A/E)
        • Company or Individual name
        • Address
        • Phone number
        • Fax number
        • Contact person
  • 13. Bidding Requirements INVITATION TO BID
    • Date of Issuance of the bidding documents
    • Brief Description of Work
      • A brief listing of the scope of work can be included
        • Project type and size
        • Major characteristics of construction
      • Type of Bid (see section for explanation)
      • Time of Completion (if established)
        • Number of days to execute project
    • Required date of substantial completion
  • 14. Bidding Requirements INVITATION TO BID
    • Bid Date and Time due (also called the Bid Opening )
      • Who will receive bids
      • When will bids be received
      • Where will bids be received
      • When & where they will be opened
      • Will the opening be public or private
        • If the opening is private, state who may attend
        • Sometimes bidders are permitted to attend private openings that are closed to sub bidders and trade publication representatives
  • 15. Bidding Requirements INVITATION TO BID
    • Examination and procurement of bid documents
      • Location of where bid documents can be examined
      • Can documents be obtained from GC or printer
        • Give printing costs/charges
        • Deposit and refund information
    • Bidder’s Qualifications
      • If required, state type of qualification
    • Bid Security (if required)
      • Is security percentage of bid or lump sum amount
  • 16. Bidding Requirements INVITATION TO BID
    • Owner’s Right to Reject Bids
      • Owner reserves right to waive irregularities and to reject bids
    • Laws and Regulations
      • Listing of applicable laws and regulations
        • May cover nondiscrimination in employment and wage rates
      • Not typically included on Invitations to sub-contractors
  • 17. Bidding Requirements INSTRUCTIONS TO BIDDERS
    • Requirements with which bidders must comply before and during submission of bids
    • Very detailed, specific information
      • Description of conditions affecting award of contract
      • Standard publications by associations, local, state and federal agencies can be used
        • AIA Document A701
  • 18. Bidding Requirements INSTRUCTIONS TO BIDDERS
    • Basic information incorporated into the Instructions to Bidders:
      • Availability of documents
        • Whether documents will be issued to other people than prime bidders
        • Required deposit or costs
        • Responsibility of issued sets of documents
        • Requirements for returning of documents by bidders
          • Time of return & refund of deposit
  • 19. Bidding Requirements INSTRUCTIONS TO BIDDERS
    • Basic information incorporated into the Instructions to Bidders:
      • Examination of documents, site & local conditions
        • Bidder is responsible for examining docs & site
        • Note limitations on examination time
        • Arrangements for examination of docs
  • 20. Bidding Requirements INSTRUCTIONS TO BIDDERS
    • Basic information incorporated into the Instructions to Bidders:
      • Interpretations During Bidding
        • Describes how discrepancies and ambiguities in the docs will be resolved during bid period
          • Contact name & info for clarifications & inquiries
          • Manner in which such requests are made, including time limits
          • How replies will be made
            • Replies will be issued as addenda
  • 21. Bidding Requirements INSTRUCTIONS TO BIDDERS
    • Basic information incorporated into the Instructions to Bidders:
      • Substitution of Products
        • Listing more than one acceptable product, method or manufacturer
          • Required in public work
          • Stimulates competition
        • A/E will state requirements and procedures under which substitutions will be considered
          • Substitution requests will no longer be accepted after a certain date before the bid date
  • 22. Bidding Requirements INSTRUCTIONS TO BIDDERS
    • Basic information incorporated into the Instructions to Bidders:
      • Type of Bid
        • Lump Sum
        • Cost-Plus-Fee
        • Guaranteed Maximum Price (GMP)
        • Unit Price
    Will review types of Contracts in Part 3
  • 23. Bidding Requirements INSTRUCTIONS TO BIDDERS
    • Basic information incorporated into the Instructions to Bidders:
      • Bid Security
        • Guarantees that if a bid is accepted within the specified time, the bidder will enter into a formal agreement with the owner
          • Usually 30 to 90 days from opening of bid
          • Bidder guarantees that they will furnish the required performance and payment bonds
  • 24. Bidding Requirements INSTRUCTIONS TO BIDDERS
    • Basic information incorporated into the Instructions to Bidders:
      • Bid Security
        • Purpose is to compensate the owner for damages incurred if the selected bidder does not accept the contract award
        • Bid security is returned to selected bidder once performance and payment bonds are issued and contract is executed.
  • 25. Bidding Requirements INSTRUCTIONS TO BIDDERS
    • Basic information incorporated into the Instructions to Bidders:
      • Bid Security
        • Bid Security Requirements information as follows:
          • Required amount of bid security
            • Usually percentage of bid price
            • Or stipulated sum of money
          • Form of Bid Security
            • Bid Bond
            • Cash
            • Certified Check
            • Bank Draft
            • Cashier’s Check
            • Money Order
  • 26. Bidding Requirements INSTRUCTIONS TO BIDDERS
    • Basic information incorporated into the Instructions to Bidders:
      • Bid Security
        • Bid Security Requirements information as follows:
          • To whom the bid security is to be payable
          • Required licensing or rating of the surety
          • Length of time that bid securities will be retained
          • Conditions of how bid security will be returned to unsuccessful bidders
          • Description of bid security forfeiture conditions
  • 27. Bidding Requirements INSTRUCTIONS TO BIDDERS
    • Basic information incorporated into the Instructions to Bidders:
      • Bid Security
        • Should be acknowledged on Bid Form and submitted with bid. (included in same envelope as bid form, if hand carried)
        • If a specific form is to be used, it should be included in the project manual and a statement saying that only the form is accepted.
        • Bid security should be checked for correct amount & form at time of bid opening.
  • 28. Bidding Requirements INSTRUCTIONS TO BIDDERS
    • Basic information incorporated into the Instructions to Bidders:
      • Bid Preparation
        • Informs bidders how bids are to be prepared
        • Instructions for forms
        • Number of copies required
        • Instruction on how many signatures are required
        • Additional information that is to be submitted with bid
  • 29. Bidding Requirements INSTRUCTIONS TO BIDDERS
    • Basic information incorporated into the Instructions to Bidders:
      • Bond Requirements
        • Informs bidders what types of bonds are required
          • Labor & Material Payment bond
          • Performance bond
          • Bid bond
        • Gives period of time in which the bonds must be furnished
        • Bind requirements are coordinated with the conditions of the contract
  • 30. Bidding Requirements INSTRUCTIONS TO BIDDERS
    • Basic information incorporated into the Instructions to Bidders:
      • Subcontractor Listing
        • Explains conditions and requirements that relate to the listing and acceptance of subcontractors
        • Bidders should
          • submit information as a listing on the bid form,
          • attached to the bid form or
          • to be furnished within a specified time after the bid opening.
  • 31. Bidding Requirements INSTRUCTIONS TO BIDDERS
    • Basic information incorporated into the Instructions to Bidders:
      • Identification and Submittal of Bid
        • Instructions given regarding the submission of bid
        • Basic information given for identification of the bid
          • Project name
          • Project number
          • Contract number
          • Owner
          • Bid date and time
          • Name of Bidder
  • 32. Bidding Requirements INSTRUCTIONS TO BIDDERS
    • Basic information incorporated into the Instructions to Bidders:
      • Modification or Withdrawal of Bid
        • Info on whether bids can be withdrawn or changed within a time period after submission and bid opening
        • Circumstances under which the bidder may not withdraw a bid
          • Listed conditions that bids may be withdrawn without forfeiting the bid security
          • Procedures for the above listed conditions
        • States the length of time the owner can hold the bids before any withdrawal is permitted.
  • 33. Bidding Requirements INSTRUCTIONS TO BIDDERS
    • Basic information incorporated into the Instructions to Bidders:
      • Disqualification of Bidders
        • Conditions under which a bidder will be disqualified
  • 34. Bidding Requirements INSTRUCTIONS TO BIDDERS
    • Basic information incorporated into the Instructions to Bidders:
      • Applicable Laws
        • Listing of federal, state and local laws and regulations
        • Keep list short and to the point, it should include:
          • Licensing of contractors
          • Requirements for permits
          • Exemption from sales tax
          • Wage rates and employment requirements
          • Local labor agreements
          • Nondiscriminatory hiring practices
  • 35. Bidding Requirements INSTRUCTIONS TO BIDDERS
    • Basic information incorporated into the Instructions to Bidders:
      • Pre-Bid Conference
        • Info on location, time and who may attend and if attendance is mandatory
      • Liquidated Damages
        • Information regarding the provisions on liquidated damages
  • 36. Bidding Requirements INSTRUCTIONS TO BIDDERS
    • Basic information incorporated into the Instructions to Bidders:
      • Opening of Bids
        • Refer bidder to Invitation to Bid for information regarding Bid Opening
        • Can be repeated in Instructions to Bidders section, but not necessary
  • 37. Bidding Requirements INSTRUCTIONS TO BIDDERS
    • Basic information incorporated into the Instructions to Bidders:
      • Evaluation and Consideration of Bids
        • Describes basis under which owner will award contract, including considerations of alternates and unit prices
        • Information about the Owner reserving his/her right to reject all bids and right to waive bid irregularities
  • 38. Bidding Requirements INSTRUCTIONS TO BIDDERS
    • Basic information incorporated into the Instructions to Bidders:
      • Execution of Contract
        • Listing of requirements and conditions for execution of the agreement, including preparation &examination.
  • 39. Bidding Requirements BID FORM
    • Prepared document that the bidder will submit to the owner
    • Contains blank spaces that are filled in by the bidder
    • Contains a space for bidder’s signature or corporate seal
      • This is to indicate that the bidder agrees to all bid provisions
    • Bid form is located in the Project Manual
      • An unbound bid form is usually provided for bidder’s convenience
  • 40. Bidding Requirements BID FORM
    • Bid form should be prepared to ensure an uniform arrangement that facilitates comparison and equal consideration for awarding the contract
    • Bid form is not considered a part of the Instructions to Bidders, but is related to it.
  • 41. Bidding Requirements BID FORM
    • ELEMENTS of the BID FORM:
      • Project Identification
        • Project Name
        • Project Number
        • Contract Number
        • Date of Construction Documents
      • Party to Whom Bid is Directed
        • Name of Person or Company
        • Address
        • Headings used are:
          • “ BID TO:”
          • “ THIS BID IS SUBMITTED TO:”
  • 42. Bidding Requirements BID FORM
    • ELEMENTS of the BID FORM:
      • Entity Submitting Bid
        • Name of Person or Company
        • Address
        • Headings used are:
          • “ BID FROM:”
  • 43. Bidding Requirements BID FORM
    • ELEMENTS of the BID FORM:
      • Acknowledgements
        • Bidders must provide statements regarding the following:
          • Owner has right to reject bids and waive irregularities
          • If bid is accepted, bidder agrees to enter into an agreement with owner
          • Bidder agrees to abide by Instructions to Bidders regarding disposition of bid security
          • Bidder acknowledges receipt of bidding docs; bidders signature will testify to their receipt
  • 44. Bidding Requirements BID FORM
    • ELEMENTS of the BID FORM:
      • Acknowledgements
        • Bidders must provide statements regarding the following:
          • Bidder had reviewed and is familiar with local conditions, laws and regulations
          • Bidder has examined site conditions and all documents and is familiar with both
          • Bidder accepts the determinations in the supplementary conditions regarding information upon which the bidder can rely, as well as bidder’s responsibility to obtain additional data.
  • 45. Bidding Requirements BID FORM
    • ELEMENTS of the BID FORM:
      • Amount of Time for the Bids to be Held Open
        • Provide a statement that the bidder agrees to hold the bid open for a stated period of time
          • Usually 30 days for private sector work
          • Usually 60-90 days for govt./public work
        • If lower bidder defaults for any reason, this provision allows owner to award contact to another bidder, w/o repeating entire bidding process.
        • If length of time is lengthen or shortened, a change to the general conditions and instructions to bidders in necessary.
  • 46. Bidding Requirements BID FORM
    • ELEMENTS of the BID FORM:
      • Identification of Addenda
        • Provides a place for bidder to fill in the number of addenda received and reviewed during the bidding process.
        • State that addenda were received and that their costs are included in the bid
      • Prices
        • Provides blanks for the bidder to fill in all prices.
        • Lump sum is quoted in numerical form as well as written word form
  • 47. Bidding Requirements BID FORM
    • ELEMENTS of the BID FORM:
      • Alternates
        • Provides a blank for bidder to fill in bids for alternates that are requested by the architect/owner.
        • Also, contractor-proposed substitutions that are permitted by owner
        • Alternates are costs that may be used as a substitute or replacement for the specified material or method
          • Gives the owner ability to “up-grade” if base bids are within or under budget
        • Either add or deduct to the base bid
          • Pricing is separate from base bid
  • 48. Bidding Requirements BID FORM
    • ELEMENTS of the BID FORM:
      • Allowances
        • Cash amount or quantity that bidder is required to include in bid to cover specific work that has not been fully defined.
          • Cash Allowance - dollar amount for specific item
          • Quantity Allowance – an estimated quantity of items
  • 49. Bidding Requirements BID FORM
    • ELEMENTS of the BID FORM:
      • Completion Date
        • Provides a statement indicating date that the project is to be completed from time of award.
          • Designates a specific date
          • Designates a number of days for construction
            • Calendar days
            • Working days
  • 50. Bidding Requirements BID FORM
    • ELEMENTS of the BID FORM:
      • Liquidated Damages
        • Stated amount of money paid to owner by contractor for failure to complete project by stated completion date
        • Acknowledgement for provisions for liquated damages, if necessary
  • 51. Bidding Requirements BID FORM
    • ELEMENTS of the BID FORM:
      • Attachments
        • Provide a statement that necessary attachments are enclosed, including:
          • Bid Security
          • Subcontractor Listing
          • Statements or evidence of bidder’s qualifications
          • Bidder’s Financial Statement
          • Noncollusion Affidavit
        • List other required documents for specific attachments
  • 52. Bidding Requirements BID FORM
    • ELEMENTS of the BID FORM:
      • Closing
        • Signature of the appropriate party/parties
        • Date of signature
        • Corporate Seal of bidder
  • 53. NEXT LECTURE-PART 3 Construction Contracts