Bidding Flashcards
Bidding Process 1
Owner issues request for bids
- Advertisements
- Letters of invitation
- Oral request
- Requests for prequalification
Advertisements include;
- Location, closing date + time
- Public opening
- Disqualification criteria for late bid submission
- Where to obtain plans, specs, contract documents
- bid bond: 5%
- Clarification of owner’s right to reject bids
Bidding Process 2
GC views/obtains bid documents - governmen office, owner’s office - deposit paid
- instructions to bidders
- info available to bidders (geotechnical reports, materials testing, etc)
- contract agreement
- bid forms
- bidding addenda
- general conditions (contract administration: bonding, insurance, payment, dispute resolution)
- supplementary conditions : special legal requirements
Bidding Process 3
Contractor makes decision to bid or not to bid
Factors for decisions to bid:
- volume and type of work
- size+location of project
- resources available - labour, equipment, supervisory, financial
- bonding capability
- corporate business plan
- likelihood of winning project (number of competitors)
Bidding Process 4
Contractor prepares estimate and bid submission
- visit site
- prepare estimate - calling subcontracts + supply contracts
- assemble bid
Bidding Process 5
Contractor submits bid
- by date + time of closing at specified location
Bidding Process 6
Owner opens bids + awards contract
- public / closed bid opening
What happens if there’s too many bids?
Too Many Bids?:
Pre-qualification
- only qualified contractors can obtain bidding documents, submit proposals, enter into contract for project
- almost all public projects require this
What happens if there are too few bids?
Too Few Bids?:
- reject bids
Can also reject if:
- substantially over budget
- irregularity/omission
- qualification lacking
what happens when there are mistakes in bids and what are types of mistakes?
Mistakes in Bids? :
- withdrawal means loss of bid security
- if contract starts work, no relief for mistake
Cases where contractor legally withdraws bid if there’s mistake:
- so major
- unintentional (understandable + quick notif to owner)
- clerical (arithemetic/transcription) error
- inexcusable errors: judgement, not visiting site, incorrect rough estimates
-
Bid Rigging
- contractors meet and divide projects among themselves by determining low bidder and price for each
- unlawful !!!!
GC and SC relationship
Owner - GC = GS - SC
- Contractors selects sub-bids
- Professional + ethical approach required:
–> if subcontractor doesn’t honor telephone bid, contractor can hv recourse by law
–> oral offer can be binding, can also be in writing
–> listing of sub names in proposal doesn’t mind GC and SC, GC can change mind subject to owner’s approval - GC needs several bids on each item to be competitive
Bid ethics
–> contractor should use lowest responsive bid
–> Bid shopping: GC uses bid of one SC to drive down bid of another
–> Bid peddling: SC contact GC providing better price after bidding closure
- HVAC, plumbing, electrical should be awarded as separate contracts
- owner requires list of selected subs to submit w proposal
Paying SCs (by GC) problems and solutions
- during construction, GC is pipeline for money to SC
–> GC often holds up payment to cover their own financing (BAD!) - efforts to prevent by owner
–> checks made out directly
–> money can be withheld from GC until proof of sub payment
–> GC required to get SC receipts on money reciepts
Collaboration (coordination) of GC and SC
- GC is coordinator of all SCs: they can damage GC is they want
- SCs depend on GC
- should all work tgt!
Bidding Process Summary
- owner issues request for bids
- GC views/obtains bid documents
- contractor makes decision to bid or not
- contractor prepares estimates and bid submission
- contractor submits bid
