Chapter 30 - Bidding and Negotiating of Contracts

Question 1

What’s the first step in CA?

Answer 1

finding a contractor and establishing an agreement between the owner and the contractor

Question 2

Contracts between owners and contractors can be done in two ways

Answer 2

bid or negotiated

Question 3

With a _____ contract, the owner (with the possible assistance of an interior designer) selects a contractor to do the work.

Answer 3

negotiated

Question 4

With a ___ contract, the drawings and specifications are completed by the interior designer (and other consultants if necessary) and then sent to several general contractors who bid on the work defined by the contract document

Answer 4

bid

Question 5

what type of selection of the contractor results in the lowest price?

Answer 5

competitive bidding

Question 6

Does AIA provides a document called Instructions to Bidders that outlines typical procedures and documents for bidding?

Answer 6

yes

Question 7

Is bidding open to any contractor?

Answer 7

it can be or it can be limited to a list of contractors prequalified by the owner

Question 8

why prequalify bidders?

Answer 8

to select only those who meet certain standards of reliability, experience, financial stability, and performance

Question 9

once bids are received, what are they mainly reviewed upon?

Answer 9

price
personnel
completion time

Question 10

there are two ways to advertise for bids

Answer 10

1. public advertisement (in newspaper, trade magazine, or online)
2. invitation to bid

Question 11

when are prequalified bidders used?

Answer 11

when an invitation to bid will be used

Question 12

where can bid documents be found?

Answer 12

designer’s office

Question 13

do contractors pay for the documents?

Answer 13

they typically put down a deposit and if the documents are returned in good condition, then they get their deposit back
electronic document services can also make the documents available online

Question 14

Should info about substitutions be included in the instructions to bidders?

Answer 14

yes–many contractor request that substitutions be considered for some materials. this most often happens when there are proprietary specs

Question 15

bidders have to submit the substitution request with backup. If the designer accepts it, what happens next?

Answer 15

the designer issues an addendum stating this fact and sends it to all the bidders

Question 16

During the bid process, there are always questions that need answers, errors that are discovered, and changes that the owner or interior designer decides to make. A(an) _________ is a written or graphic document issued by the interior designer before the execution of the contract that modifies or interprets the bidding documents by additions, deletions, clarifications, or corrections.

Answer 16

addendum

Question 17

when are addenda issued?

Answer 17

during the bidding process before bids are submitted

Question 18

is there a deadline for issuing an addendum?

Answer 18

yes- four days before the bids are due

Question 19

what happens at a bid opening?

Answer 19

most are conducted by the interior designer, with the owner and bidders present. the bids are read aloud. a bid log is prepared to note the base bid amount, amounts of alternates (if any), whether receipt of any addenda was acknowledged, and other pertinent information. there should be no announcement of the apparent low bid at the bid opening

Question 20

A decision on contractor is usually made no more than __ days after the bid opening

Answer 20

10

Question 21

Who evaluates the bids?

Answer 21

the designer can help the owner evaluate the bid

Question 22

can the owner reject and or all bids?

Answer 22

yes

Question 23

if all the bids exceed the project budget and the owner-designer agreement fixes a limit on construction costs, the owner has four options

Answer 23

1. rebid (or renegotiate)2. authorize an increase in the construction cost3. work with the designer to revise the scope to reduce costs4. abandon the project

Question 24

one advantage of having alternates in the drawings?

Answer 24

it’s a flexible way to deleting or substitute materials or construction elements to reduce the project cost if the bid is too high

Question 25

who prepares the bidding documents?

Answer 25

the interior designer using standard forms or forms provided by the owner

Question 26

where are the bidding documents located?

Answer 26

they are usually bound in the project manual , but the are not a legal part of the contract documents

Question 27

Bidding documents include:

Answer 27

advert or invitation to bid
instructions to bidders
bid forms
bid security information
requirements for a performance bond, if any
requirements for labor and material payment bond, if required

Question 28

what else is included in the bidding package?

Answer 28

drawings, specs, general and supplementary conditions of the contract, addenda issued before the receipt of bids, and a form of agreement between owner and contractor

Question 29

how are bids submitted?

Answer 29

in a sealed envelope with the name of the party receiving the bid on the outside along with the project name and the name of the company submitting it

Question 30

AIA produces a document entitled “Instructions to Bidders”These instructions normally include:

Answer 30

consideration of bids
bidders’ representation bidding documents
substitutions
bonds
interpretation or correction of bidding documents
addenda
modification or withdrawal of bid
post-bid information

Question 31

What happens if there’s an error inconsistency in the drawings that a bidder notices?

Answer 31

the bidder should alert the designer at least 7 days before bid opening and the designer should issue an addendum to all bidder answering the question

Question 32

If a bidder proposes a substitution, who does the burden of the proof of the merit of the substitution rest on?

Answer 32

the bidder

Question 33

can substitutions be considered after the contract is awarded?

Answer 33

no (unless there is a valid reason)

Question 34

_____ is used to ensure that the successful bidder will enter into a contract with the owner

Answer 34

bid security

Question 35

is bid security used more often on small or large projects?

Answer 35

large

Question 36

The final decision concerning the requirements for bid security is the ________’s

Answer 36

owner’s

Question 37

Form of bid security?

Answer 37

certified check, cashier’s check, or bid bond

Question 38

How is the bid security used?

Answer 38

if the successful bidder does not enter into an agreement, the bid security may be retained to compensate for the difference between the low bid and the next lowest bid

Question 39

A _____ is a statement by a surety company that obligates the surety company to complete construction of the project should the contractor default on his or her obligations

Answer 39

performance bond

Question 40

Are performance bonds mandatory?

Answer 40

They are, on public work

Question 41

What is the cost of a performance bond?

Answer 41

usually around 3% and is ultimately paid by the owner because it is included in the total amount of the contract price

Question 42

A ________ is usually required along with a performance bond. This is because a performance bond ensure the completion of the contact, but it does not guarantee payment for labor and materials by a defaulting contractor

Answer 42

labor and material payment bond

Question 43

An ______ is a request included in the bidding documents asking the contractor to supply a price for some type of variation from the base bid.

Answer 43

alternate

Question 44

_______ are set costs for certain portions of the work based on individual quantities, such as linear feet or square yards, of installed material.

Answer 44

unit prices

Question 45

Why are unit prices used?

Answer 45

they are listed on the bid form and provide a basis for determining changes to the contract. ex: a cost per square foot for adding parquet flooring may be requested if the full extent of this type of flooring in unknown

Question 46

An _________ is a set amount of money estimated by the interior designer to cover a particular material or piece of equipment when the cost for that material is unknown

Answer 46

allowance

Question 47

where do you put allowances in the drawings?

Answer 47

in the specs