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Bidding Requirements
ACT 380
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Objective
Provide an overview of the bidding process, including documents included in the bidding requirements
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Major TopicsO The Bidding ProcessO Bidding DocumentsO Types of BidsO Bid SecurityO Bidder Qualification DataO Invitation to BidO Instructions to BiddersO Elements of a Bid FormO Information Available to BiddersO Preliminary Schedules
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The Bidding Process (TBP)
O A basic principle of the process is that all bidders receive identical consideration and bid on an identical basis
O Owner –”Who will do this work for the least cost?”
O Contractor – “I will do the work for $xxxxx”
O See pg 6.11; Section 6.4 covers Bidding
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(TBP) Bids vary because:
O Product costs vary among different suppliers
O Labor costs & time estimates varyO Prices vary from the subcontractorsO Labor rates vary with skill &
experienceO Overhead costs vary with composition
of work forceO Profit varies with bidder & other work
available
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(TBP) Subcontractor Bids
O The subdivision of work will be accomplished by subcontractors which will submit their bids to the prime bidder
O The prime bidder will select the subcontractors on a competitive basis
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(TBP) Plan RoomsO Sets of documents for use by
suppliers or subcontractors should be available in sufficient numbers and centrally located
O Often these documents are available at the A/E office
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(TBP) Submission of Bids
O Time & date are set when the bids are invited
O Bids are typically delivered in a sealed envelope to the A/E’s or owner’s office
O Sometimes public project owner’s supply self-addressed, identical opaque envelopes that MUST be used for submitting the bid
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(TBP) Time Limit for Bidding
O The scope & complexity of the project influence the length of time given for preparing bids
O A simple project may only allow 2 weeks
O Other factors:O Time needed to collect subcontractor
bidsO Urgency dictated by ownerO Time for settlement of questions &
discrepancies
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(TBP) Time for Acceptance
O Bidder should be allowed to withdraw a bid before deadline to receive all bids – if after his/her bid is accepted then only if the owner consents may they withdraw the bid
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(TBP) Bid DepositoryO Several states use this on publicly
funded projects – may be voluntary or mandatory
O Developed to improve the quality of bids & to reduce potential unethical bidding practices
O Significant units of work bid by subcontractors are deposited and either compared to the bids submitted by the contractor bids or “deposited” for these contractors to use as a reference
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Bidding Documents (BD)
O These documents provide the necessary information that enable bidders to comply, understand, and follow stipulated requirements of the projectO Bid solicitationO Instructions to biddersO Information available to biddersO Bid forms & supplementsO AddendaO Contract formsO Conditions of the contractO SpecificationsO Contract drawings
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(BD) Cross-Reference of Requirements
O Basic principle of stating things only ONCE in construction documents applies here as well
O e.g., Bid Security is referred to in the Bid Solicitation, but detailed requirements are found in Instructions to Bidders & Supplementary Instructions to Bidders
O Correct way to document is “as indicated in the [location of primary reference]”
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Types of BidsO Stipulated Sum – usually requested
on architectural type of projectsO Cost-Plus FeeO Guaranteed Maximum PriceO Unit Price – usually used for civil type
projectsO Combined Bid – work divided into
phases
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Bid Security (BSec)O This guarantees if a bid is accepted, the
bidder will enter into a formal agreement w/ the owner (typically 30-90 days from opening of bids)
O Selected bidder will furnish required construction performance & payment bonds – once done, they receive security back and are now considered the CONTRACTOR
O Purpose of the security is to compensate the owner for damages incurred if selected bidder doesn’t accept contract award
O If selected bidder accepts award, unsuccessful bidders receive their security back
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BSecO Details should address:
O Required amount of security (stipulated sum or %)
O Form of security (cash, certified check, money order, bid bond)
O Length of time security will be retained
O Description of conditions under which security will be returned to unsuccessful bidders
O Description of conditions under which bid security will be forfeited
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Bidder’s QualificationsO Owners may require bidders to
provide information related to their physical & financial ability to do the work
O AIA Document A305 (Contractor’s Qualification Statement) may be used
O Qualification information is CONFIDENTIAL
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Bid SolicitationO Invitation to Bid – contain only
pertinent data that will help bidders decide if they are qualified to submit a bid
O See sample on page 5.8; fig 5.2-AO For public projects --- published as a
legal notice in designated publications or newspapers
O In private work the owner may send to a select few qualified bidders
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Basic Information of Bid Invitation/Advertisement
O Project IdentificationO Description of WorkO Type of BidO Time of CompletionO Bid OpeningO Examination and Procurement of
DocumentsO Bid SecurityO Bidder’s QualificationsO Owner’s Right to Reject BidsO Laws & Regulations – nondiscrimination
in employment/wages laws
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Instruction to Bidders (ItB)
O Provide more detail than the Invitation to Bid
O Basic information includes:O Documents – where available, cost, return
policyO Examination of Documents, Site & Local
ConditionsO Interpretations During Bidding –who to
send inquiries to; how replies will be provided (formatted as Addenda); time limits
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ItBO Substitutions of Products – list
acceptable products or manufacturersO Type of BidO Preparation of Bid – forms to use & the
number of copies; required signaturesO Bid Security InformationO Performance & Payment Bond—in public
projects it is typical that each are equal to 100 % of the contract sum
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ItBO Subcontractor ListingO Identification & Submittal of BidO Modification or Withdrawal of BidO Disqualification of BiddersO Applicable Laws – list federal, state, &
localO Licensing of contractors for special
requirementsO Permits for special constructionO Exemption from sales tax, if applicableO Local labor agreements
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ItBO Pre-bid Meeting – location, time, who
can attend, if attendance is mandatory
O Liquidated damagesO Opening of BidsO Evaluation & Consideration of Bids –
owner’s right to reject all bidsO Execution of Contract
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Bid Form (BF)O Prepared by bidder & submitted to the
ownerO Blank spaces are filled in by the bidder &
he/she signs (if corporation—their seal included)
O Bid form is bound into the project manualO See figure 5.2-C on pg 5.14 Note: this
example does not include everything that could be included in a Bid Form
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Elements of a Bid Form (EBF)
O Project identificationO Name/Address of party to whom bid
is directedO Entity submitting bidO Acknowledgements –owner has right
to reject bids; bidder will enter into agreement if accepted; bidder examined site & is familiar with laws
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EBFO Amount of time for the bids to be held
openO Identification of addendaO PricesO AlternativesO Allowances – cash & quantityO Combined bidsO Completion dateO Liquidated damagesO Supplements (Attachments) non-
collusion affidavitO Closing
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Information Available to Bidders
O When provided…not part of the contract documents
O Often includes information related to subsurface, geotechnical reports, hazardous material reports, descriptions of the site or existing buildings, and property survey information
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Preliminary SchedulesO When provided, is included as
advisory data onlyO Not part of the contract documentsO Does not replace requirements for
submission of a final schedule by the contractor