Lecture 10

Question 1

During the ______ of the project, the owner selects a party (Contractor) to undertake his/her project.

Answer 1

procurement phase

Question 2

The selection process is based on pre-set criteria mandated by ___________________________.

Answer 2

statute (Public works) or established by the private owner or his/her agent (A/E or CM)

Question 3

Project Award methods

Answer 3

Competitive bidding, negotiation, Direct Assignment

Question 4

Open or selective [can be used by both public or private owners]

Answer 4

Competitive bidding:

Question 5

Mostly used in private projects, very seldom used in publicly owned or financed projects.

Answer 5

Negotiation:

Question 6

Mostly used in private projects.

Answer 6

Direct Assignment:

Question 7

1. Public or private
2. Required by law for public projects
3. Usually awarded to lowest responsible bidder
4. May have pre or post qualification  If cost is only criterion, leads to many problems
5. May be open or selective
6. Mostly lump sum or unit price

Answer 7

Competitive bidding

Question 8

1. Mostly private
2. Usually based on past experience or high trust level
3. May have pre or post qualification
4. Cost is one of many important factors  Usually selective (short list)
5. Mostly cost plus or target (GMP)

Answer 8

Negotiated Bidding

Question 9

1. Provides clear idea of total construction cost
2. Fair to all contractors
3. Allows for competition and innovation to reduce price
4. Gives chance for new contractors with limited past experience
5. Shifts risk from owner to contractor

Answer 9

Advantages of Competitive Bidding

Question 10

1. Lowest cost may result from errors or miscalculations
2. Lengthy in time (to evaluate all submitted bids)
3. Gives chance for new contractors with limited past experience
4. Shifted risk might be too costly to owner

Answer 10

Disadvantages of Competitive Bidding

Question 11

1. Selected pool of experienced and trustworthy contractors.
2. Factors other than cost are involved
3. May start as cost plus and change later to lump sum
4. Shorter period of time for evaluation
5. Allows for more information flow between parties

Answer 11

Advantages of negotiated bidding

Question 12

1. Eliminates “new blood”
2. Possibility of collusion and “Bid Rigging”
3. Final price unknown beforehand

Answer 12

Disadvantages of negotiated bidding

Question 13

1. size,
2. scope,
3. location,
4. financing,
5. bonding requirements,
6. requested forms,
7. conditions of payment,
8. time requirements (including bonuses, penalties, and liquidated damages),
9. award criteria,
10. owner’s right to reject bids and reasons if any,
11. bidding documents (availability and purchase price), owner’s info,
12. A/E or CM info,
13. special bidding requirements (pre-qualification, pre-bid conferences),
14. Bid submittal info (place, date and time)

Answer 13

Elements of the Bid

Question 14

1. Substitute for advertisement to secure the same result for private projects.
2. Limited circulation.
3. Owner not required to award bid to lowest bidder. 4. Owner may reject any/all bids without giving reasons.
4. Includes most of the info included in the advertisement.

Answer 14

Invitation to bid includes these things

Question 15

1. Also known as Information For Bidders (IFB).
2. Used to disseminate uniform information for all bidders.
3. Ensures uniformity in bid preparation, submittal, and responsiveness.
4. Allows the owner and the A/E or CM to compare apples to apples and oranges to oranges.
5. Reduces the time and effort required to review future bids.

Answer 15

Elements of the Bid

Question 16

1. Procedure for preparation of bid (Proposal), including needed forms, addenda receipt, Bid value representation, etc.
   2, Procedure for submission of bid, including format, packaging, addresses, number of copies if necessary, etc.
2. Bid Bond (Security), in the form of a bond from a surety or a certified bank check, showing the value, provisions for forfeit, provisions for return, etc.
3. Withdrawal of bids, including conditions allowing for withdrawal, procedure for withdrawal, penalties if any, and any time limits.
4. Opening of bids, including date, time, and place, whether bidders information will be public or kept private, etc.
5. Rejection of bids, including conditions for rejection, reasons and justification for rejection.
6. Procedure for discrepancies, including documents hierarchy, what bidder should do if an error was discovered, procedures for correction and dissemination of corrected information.
7. Return of bid documents, including conditions for return of documents to get a refund, deductions , etc. 9. Time limitations, including period of validity of bids, project timeframe in working or calendar days, etc. 10. Requirements unique to the project, including hiring requirements, working hours, purchasing provisions, special rules or regulations, and/or special methods, sequence, or procedures for construction

Answer 16

IFB includes these things

Question 17

IFB is usually prepared by ________, and the same party will be responsible for distribution, explanation, corrections, collection, review, evaluation, and recommendation to the owner.

Answer 17

A/E or CM

Question 18

Preparer of the IFB, should expect the offset values to be ______ (depending on preparer’s experience, and availability and accuracy of information)

Answer 18

+/- 10 – 20 %

Question 19

1. Upon Receiving Bids, the AE or the CM starts by evaluating the bids based on the original contract conditions and documents, in addition to any alternates.
2. If the main criterion is lowest responsible responsive bid, then the successful bidder is selected based on the lowest total tally.

Answer 19

Bid Tabulation

Question 20

Project team building three steps

Answer 20

1. Understand the extent of their contractual rights and responsibilities and effectively carry them out
2. Work fairly, efficiently, and swiftly to solve problems through communication
3. Act in an ethical manner

Question 21

One of the primary benefits of this partnering process is that it increases the perception of all parties to the contract that they have the same common goals

Answer 21

Partnering as a vehicle for team building

Question 22

1. Reduced exposure to litigation through open communication and issue resolution strategies
2. Lower risk of cost overruns and delays because of better time and cost control over the project
3. Increased productivity and lower administrative costs because of elimination of defensive case building
4. Increased opportunity for innovation through open communication and the element of trust, especially in development of value analysis changes and constructability improvements
5. Increased opportunity for a financially successful project

Answer 22

Partnering as a Vehicle for Team Building

Question 23

1. Sets ground rules for communication
2. Establishes how problems will be addressed
3. Identifies critical decision makers from each of the parties to the contract
4. Often includes a mission statement for the project 5. Often includes a written and signed pledge to work to resolve problems without conflict

Answer 23

Formalizing the Partnering Process

Question 24

1. Better communication and coordination
2. Increased productivity
3. Reduced project costs
4. Earlier project completion
5. Improved project team morale
6. Fewer claims and delay

Answer 24

Benefits of Working as a Project Team

Question 25

1. Adversarial relationships/personalities
2. Incomplete or inaccurate contract documents
3. Unreasonable schedule requirements
4. Unplanned or inordinate number of changes to the project scope
5. Labor issues
6. Delays in product fabrication or delivery
7. Poor communications
8. Delays caused by ineffective management

Answer 25

Obstacles to Working as a Team