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1. MS 404 CONTRACT MANAGEMENT
ASSIGNMENT No. 3
Last Submission Date: 10-06-2020
Prepared By: Syed Muneeb Haider
Registration no: F2016132057
Q.1 A school district has determined that there is a need to add a new gymnasium to an existing
high school. The programmed amount for the project, which is the amount of funds
available, based on the enabling legislation, is $ 12.5 million. The architect’s estimate is $
12.9 million, but the school district desires to retain as many of the features in the
gymnasium as possible. These deductive alternates and their estimated values have been
identified:
1. Bleachers for the basketball court $ 240,000
2. Racquetball courts $ 125,000
3. Additional parking $ 55,000
4. Replace brick exterior with metal siding $ 98,000
5. Replace air-conditioning with ventilation $ 135,000
The school district invited bids for the above work and the following five bids were
received with base bids alongwith five deductive alternates:
Bidders A B C D E
Base bid $12,879,384 $13,045,900 $13,243,765 $12,999,001 $13,684,700
Alternate 1 $224,318 $237,982 $264,280 $274,460 $312,238
Alternate 2 $97,210 $114,000 $107,340 $145,600 $99,000
Alternate 3 $43,500 $62,300 $65,000 $68,500 $73,600
Alternate 4 $97,500 $89,450 $99,650 $92,450 $89,650
Alternate 5 $130,500 $129,000 $136,750 $128,000 $125,000

2. Evaluate the bids received to determine the lowest bidder. Would any additional features,
as described above (1 – 5), be a part of the contract for construction of new high school
gymnasium?
Solution
For the evaluation of lowest bidder, we can subtract the amounts of five deductive alternatives
form the base bids
 Bidder C and E are still above the available funds i.e. PKR12.5million even after
deducting all the alternatives. So there two bidders are rejected.
 Bidder B price is close to available funds, so we cannot retain any alternative by this
bid.
 Bidders ‘A’ and ‘D’ base prices after deducting all the alternatives are PKR 12,286,356
and PKR 12,289,991 respectively. As Bidders ‘A’ bid price is lowest so we will consider
it most suitable for retaining possible alternatives.
 Now looking at the deductive bid price of ‘A’, we can retain 2 and 3 alternative or 2 and 4
alternatives. But we retain Alternative 2 and Alternative 4 because total bid price will
approximately be equal to $12.5 million which is within the available funds as shown in
following calculations.
Bidders A B C D E
Base bid $12,879,384 $13,045,900 $13,243,765 $12,999,001 $13,684,700
Alternate 1 $224,318 $237,982 $264,280 $274,460 $312,238
Alternate 2 $97,210 $114,000 $107,340 $145,600 $99,000
Alternate 3 $43,500 $62,300 $65,000 $68,500 $73,600
Alternate 4 $97,500 $89,450 $99,650 $92,450 $89,650
Alternate 5 $130,500 $129,000 $136,750 $128,000 $125,000
After
deduction
base bid
PKR12,286,356 PKR12,413,168 PKR12,570,745 PKR12,289,991 PKR12,985,21
Available
Budget
PKR12,500,000 PKR12,500,000 PKR12,500,000 PKR12,500,000 PKR12,500,000
Difference PKR 379,384 PKR 545,900 PKR 743,765 PKR 499,001 PKR 1,184,700

3. Bidders ‘A’ Bid Price After deduction of Alternatives PKR12,286,356
Alternate 2 (Racquetball courts) PKR 97,210
Alternate 4 (Replace brick exterior with metal siding) PKR 97,500
Total Price of Bidders ‘A’ after adding Alternative
2& 4 and deducting 1,3,5 alternative.
PKR12,481,066
 We awarded to Bidder ‘A’ by retaining Alternate 2 (Racquetball courts) and
Alternate 4 (Replace brick exterior with metal siding) and deducting 1,3,5
alternatives.
Q.2 A new research laboratory building is to be constructed on a university campus. The
programmed amount is $5.6 million. The architect’s estimate is $5.8 million. The contract
will not be awardable above $5.6 million. The decision is made to advertise the building
with a base bid and four additive alternates. The four additive alternates and their estimated
values are:
1. Additional installed testing equipment $74,000
2. Upgraded administrative area $88,000
3. Additional climate control areas $48,000
4. Landscaping $76,000
The following five bids were received with base bids along with four additive alternates:
Bidders A B C D E
Base bid $5,440,200 $5,195,165 $5,380,760 $5,582,685 $5,234,678
Alternate 1 $56,480 $69,485 $71,900 $46,425 $68,945
Alternate 2 $82,450 $79,675 $56,900 $82,000 $80,450
Alternate 3 $40,800 $43,580 $44,687 $49,784 $42,136
Alternate 4 $74,690 $79,300 $72,345 $70,985 $76,890
Evaluate the bids received to determine the lowest bidder.
**********
Solution
To evaluate the lowest bidder, we will add the all alternative bides with base bid or find out
the available amount

4. Bidders A B C D E
Base bid $5,440,200 $5,195,165 $5,380,760 $5,582,685 $5,234,678
Alternate 1 $56,480 $69,485 $71,900 $46,425 $68,945
Alternate 2 $82,450 $79,675 $56,900 $82,000 $80,450
Alternate 3 $40,800 $43,580 $44,687 $49,784 $42,136
Alternate 4 $74,690 $79,300 $72,345 $70,985 $76,890
Results
after
adding all
additive
alternative
bides
PKR5,694,620 PKR5,467,205 PKR5,626,592 PKR5,831,879 PKR5,503,099
Budget PKR5,600,000 PKR5,600,000 PKR5,600,000 PKR5,600,000 PKR5,600,000
Available
Amount
PKR 159,800 PKR 404,835 PKR 219,240 PKR 17,315 PKR 365,322
 After adding the additive alternative bids with the base bid then bids A, C and D are
above from the available funds 5.6million. So, we rejected A, C and D.
 Bides B and E are within the available fund 5.6 million. Bidder B is the lowest bidder
with the bid value of with PKR5,467,205. So, we awarded bid to bidder B with retain
all alternatives