nmppa nmpc class

NMPPA NMPC Class

PUBLIC CONSTRUCTION

CONTRACTING IN NM

Las Cruces Southern ConferenceAugust 21, 2008

NMPPA New Mexico Procurement

CertificationClass

Presented by:

Dotty McKinney, CPPB PSFA Contracts Administrator

PLANNING

DESIGN

CONSTRUCTION

PLANNING

What makes a successful Project?

Identify and engage all constituents in the

construction activities

- Planning

- Execution and logistics of

the construction project

- Post construction occupancy


Public Sector Owners

In planning a Public Works Project, it is wiser to “include” any and all constituents than to “exclude” them in the process.

Internal Constituents

External Constituents

What makes a successful Project? Internal Constituents

User Groups, especially

- Building Managers

- Maintenance/Operations

- Security/Safety/Environmental

- Information Technology

- Parking/Logistics/Communications

- Governing Board


External Constituents

Neighborhood Associations

Advocacy Groups

Regional Planning Authorities

Local Planning Authorities

Compliance Authorities

What makes a successful Project? A successful project minimizes the time,

once planning and funding are in place, between the award and the project completion without sacrificing quality, compliance with laws and regulations, and being accountable to policymakers and the public.

Timely WITH

Quality, Compliance & Accountability

“Keys” to a successful ProjectGood management -

●of the breadth of interests to be serviced

●of the time required to serve them

Understanding you can’t please everyone –

●but listening to all sides of an issue even though the ●ultimate answer may be “no”

●using the best judgment possible

●being prepared to defend the logic behind decisions made

●informing rather than telling, being rational

●making it a “win-win” for everyone involved

“Barriers” to a successful Project• There are a lot of unknowns in construction and

success sometimes requires quick decisions to be made that can have costly and time consuming consequences.

• Legal barriers• Physical barriers• Environmental barriers• Funding barriers

TRANSLATION – “LACK OF PLANNING”

CONSTRUCTION DOLLAR$

Project Funding

How much funding is available

When funding is available

Schedule to expend funding

Funding Sources

From other public agencies

Local or State appropriations

Federal

Or combination of the above


When Acquiring Funding“Players must be able to relate the request in a general, broad-brush-stroke of information involving the building and associated costs as well as understanding of timing and logistics of the project – simply and informatively”.

The application for funding may take place long before design professional services are engaged.

There are numerous sources for identifying “cost per SF” for various building types such as “Means for Construction Cost Estimating Guide”, and other agencies/entities having recently built similar facilities.


Funding Sources – Important Things to Know!!!Requirements that accompany funding

- Appropriation languageWhat funds may be spent onTime lines for expendituresType of building and standards that apply

Size of rooms, qualities of amenitiesTypes of materials, Green/Leed

- Federal & NM Davis Bacon wage rates


Once Funding is in place -● Hire a design professional qualified to design the project

based on the scope of work and the budget.

• Assign staff to the Project that are knowledgeable in procurement methods and state requirements governing public works projects, and construction.

• Ensure that both the design professional and construction contracts are followed and enforced – more commonly known as “Contract Administration”.

DESIGN

The Design Professional

NM Statutes you must know!13-1-66.1 “Local public works project”

means a project of a local public body which uses architectural or engineering services requiring professional services costing fifty thousand dollars ($50,000) or more, or landscape architectural and surveying services requiring professional services costing ten thousand dollars ($10,000) or more, excluding applicable state and local gross receipts taxes.

The Design Professional Statute 13-1-76 NMSA 1978 Definition;

professional services.“Professional services” means the services of architects, archeologists, engineers, surveyors, landscape architects, medical arts practitioners, scientists, management and systems analysts, certified public accountants, registered public accountants, lawyers, psychologists, planners, researchers, construction managers and other persons or businesses providing similar professional services, which may be designated as such by a determination issued by the state purchasing agent or a central purchasing office.


The statute for “professional services” does include architects. However, any services required of an engineer, landscape architect, surveyor, or construction manager means that a letter of determination justifying the District’s need for these or other types of services would become the first document in the procurement file.


The professional services for architects in definition 13-1-76 is appropriate for research reports, studies, evaluations, etc. that do not require “formal bidding documents including plans, specifications , professional liability insurance to cover any errors or omissions, that would require a standard Design Professional Agreement.


Statute 13-1-119 NMSA 1978. Competitive sealed qualifications-based proposals; architects; engineers; landscape architects; surveyors; additional requirements.

“In addition to compliance with the requirements of 13-1-112 through 13-1-114 and 13-1-116 through 13-1-118 NMSA 1978, a state agency or local public body, when procuring the services of architects, landscape architects, engineers or surveyors for state public works projects or local public works projects, shall comply with Section 13-1-120 through 13-1-124 NMSA 1978.


Qualifications based proposals have very definite criteria and rules for evaluation that are provided in the statutes referenced in Statute 13-1-119 NMSA 1978. These statutes define the method and procedures required to procure these services.

Cost is not a factor. The professional’s abilities, resources, technical competence, past record of performance, proximity to the project site, and volume of work previously or currently being performed for the entity are taken into consideration when awarding a contract.


PUBLIC WORKS PROJECTS

Public Works Projects require RFP Selection Process for Design Professionals

IFDesign fees will be $50,000 or greater for Architects and Engineers, and $10,000 for Landscape Architects, and Surveyors


QUESTION: What about Design Professional contracts that are less than $50,000 in fees and reimbursables, if applicable, but exclusive of GRT? Do I need to go out to RFP?

ANSWER: No. Because the Design Professional fees and any applicable reimbursables, exclusive of GRT is less than $50,000, it is not a public works project and therefore the RFP process of procurement is not required.


Professional Technical Advisory Board NMSA 13-117-2 – Required by Statute since

1979. Purpose: To provide professional technical

advisory services to local public bodies in the development of Scope of Work, RFP, ad the selection of professional services of architects, engineers, landscape architects and surveyor through the use of the “qualifications based selection process”.


In summary, qualified professional services have their own set of procurement guidelines and evaluation process that is required by the Procurement Code, in addition to the requirements for request for proposals. The professional services acquired to produce drawings, specifications, maps, etc., carry a certain liability to both the procuring entity and the professional, and require that the professional be properly licensed so that drawings, specifications, etc. meet all of the local and/or national laws, codes, local requirements, etc. necessary to provide a safe, complete environment.


Again, architects, engineers, landscape architects and surveyors can provide professional services, those that require evaluations, reports, investigations, etc. And they can provided qualified professional services that require drawings, specifications, maps., as well as the entity providing certificates of insurance in the event gross errors or omissions occur.


PROJECT BUDGET

MACC

DESIGN FEES

The Design Professional√ It is important to understand the Project Budget

(overall funding and funding sources) Maximum Allowable Construction Cost, and appropriate design fees for execution of your Project.

√ The Design Professional’s fees are based on the Maximum Allowable Construction Cost, not the Budget.

√ The Budget includes the MACC (cost of construction) site work, design fees, FF&E, some consultants, and if appropriate, CM fees, a contingency amount for errors & omissions,administrative fee allowances and all NMGRT.

Probable Cost Estimate1. Construction costs (bldg type, materials, special considerations)

Professional Services1. Design fees2. Other design services (Landscaping, Interior Design)

Indirect Costs1. Owner Consultants 2. Testing

(surveys, geo-tech, concrete & structural, TAB, Hazardous Material)

1. Legal Ad/Contract Document Printing Costs2. Builders’ Risk Insurance3. Commissioning Services4. FF&E5. Demolition

Project Budget

MACC“Maximum Allowable Construction Cost”

means the amount that is set by the Owner and represents the total sum available for the Cost of the Work, the CMAR Fee, and General Conditions, excluding gross receipts tax, but may include furnishings, fixtures and equipment.

MACC shall not include professional fees, testing fees, Owner’s project contingency funds, acquisition costs or other soft costs.

Design Fees

13-1- 124 NMSA 1978 Architect rate schedule. The secretary shall adopt by regulation an architect rate schedule which shall set the highest permissible rates for each building-type group, which shall be defined in the regulations. The rate schedule shall be in effect upon the approval of the state board of finance and compliance with the State Rules Act and shall apply to all contracts between a state agency and an architect which are executed after the effective date of the architect rate schedule.”

Design Fees

are based on a percentage of the MACC, taking into consideration the complexity of the Project. Typically, the greater the MACC for a building type, the lesser the percent fee.

EXAMPLE: MACC = $1,000,000DESIGN FEE% = 6.0%FEES (not incl. GRT) += $60,000


RFP STEPS Committee & Duties

1 Legal Notice

2 Pre-Proposal Conference

3 Receipt of Proposals

4 Evaluations/Short List Ranking

5 Notices/Interviews

6 Award

7 Contract negotiations


The Selection Process – What you need to know!

Do not rush the process

Do ensure proposed schedules are realistic

Do not make your decision on a “design” that

you like, it may not fit your project

Do consider the “design team” and their abilities and their availability to manage your project


Negotiating a Contract

√ Complexity of the Project and Budget dictate the fees that can be charged by the DP

√ Remodels, Renovations and Additions may require additional work and coordination, and may warrant an additional ½ to 1% in fees

√ Additional costs may be required for difficult site conditions


√ Landscaping, interior design, etc. may are specialty or “additional services” as well that warrant extra fees.

√ Although fees are negotiable, the rates set forth by the State are fair and reasonable.

√ Always require professional liability insurance of the design professional for design services.


BUZZ WORD

PROJECT DELIVERY METHODS

When you interview the design professionals, you may want to explore their knowledge and experience in working with different methods of construction contracting such as -

Project Delivery Methods

PROCUREMENT OPTIONS

DBB Design/Bid/Build – 13-1-102 DB Design/Build – 13-1-119.1 RFP Request for Proposal - 13-1-111

for Construction & Maintenance Services CMS Construction Management Services –

Not at Risk 13-1-40.1 CMAR Educational Facility

Construction Manager AT RISK 13-1-124.1 (HB303)

Project Delivery

DELIVERY METHODS

PER THE PROCUREMENT CODE DEFINITIONS ARE KEY SOME DELIVERY METHODS HAVE RULES

(REGULATIONS) THAT DESCRIBE HOW TO PROCURE IN DETAIL (Available on SPD website at www.state.nm/spd)

Which Method To Use?

What to consider when making your decision

STAFF KNOWLEDGE

of different methods available UNDERSTANDING

various project delivery methods SELECTION

of appropriate method IMPLEMENTATION

of chosen project delivery method

Which Method To Use?

* What is allowed by law

* Who on your staff is available

* When is the Project to be ready

Other factors

- What Benefits (not Obstacles)

are evident in the Project circumstances

Which Method?

The one that fits BEST!

DesignPlanning Bid Construction Occupancy

NEED Recognized

Traditional Linear Process

The Four Phases(every project goes through)

Design

Planning

Occupancy

Construction

Fast-Tracking Process

Bid

DESIGN / BID / BUILD

Low Bid

DBB - Design / Bid / Build

LOW BID

1. Traditional method of procurement

2. Owner selects designer to design building

3. Contract awarded to Lowest Responsible Bidder

4. Owner holds Design/Construction Contracts

5. Subcontracts held by General Contractor

LOW BID

Considerations:

√ Separate contracts for design & construction

√ Final selection based 100% on total cost


LOW BID

PROS:*Process intends to stimulate price competition*Process understood by owners & public*Process has established legal & procedural guidelines*Fairness of the process allows qualified contractors to compete on an equal basis*Owner has an expectation of finished product prior to construction based upon design & price


LOW BID

CONS:√ Process may require considerable time√ No guarantee that bid won’t exceed budget leading to delays to re-bidding or canceling project√ Adversarial relationships can develop

Owner – wants best possible building at lowest cost

Architect – wants to satisfy Owner & meet design elementsContractor – must complete job within time & price

√ Differences in interpretation of contracts√ Differences may result in claims/delays to be resolved


DESIGN / BUILD

Request for Proposal

Negotiated Price

DB – Design Build

13-1-119.1 NMSA 1978

Definition: “means a procurement process by which a using agency contracts with one firm who has responsibility for the design, construction and delivery of a project under a single contract with the agency”.1. Procured using the RFP method

Qualifications basedEvaluation criteria same as DP

2. Regulations – NMAC 1.5.7Guides you step-by-step

DB – Design Build

13-1-119.1 NMSA 1978

Important Note: If project budget is less than $400,000 or more than $10,000,000 you can use the DB process. If your budget falls in-between these figures, you cannot use the DB process.

DB - Design Build

PROS:• One contract for design/construction saves time• Long lead time items can be identified, order ahead • Quicker resolution on issues – design/costs• Project cost determined relatively soon• Contract documents can be less detailed• Value engineering & constructability review enhanced• Complex projects – full integration of design &

construction enables fast schedule with controlled budget

• Project close-out may be smoother as fewer parties are involved

• Possibility of fewer disputes, changes, claims & delays

DB – Design Build Cons:

• Owner must provide clear scope of work & project requirements

• Potential loss of checks & balances (DP/Contr)• Loss of objectivity may be perceived as Owner’s decision

based on qualifications, not price• Insurance/Design liability must be addressed - design services require licenses of design/build team• Less detailed documents may result in

misunderstandings by Owner – affect time/price• Owner may require more cost monitoring than lump-sum

contracting

RFP

Request for Proposal

forCONSTRUCTION

MAINTENANCE, SERVICES & REPAIRS

Discussion:

This competitive sealed proposal process is authorized to give agencies flexibility to obtain the best overall value from a procurement contract. This is accomplished by permitting consideration of certain contractor qualification and performance factors that add value to a procurement contract, such as past performance, technical expertise and experience, management capabilities and resources.

RFP for Construction, Maintenance, Services & Repairs

13-1-111 NMSA 1978

Became Law in 2003

1.4.8 NMAC Regulations issued 2005

Step-by-step guidelines


SUMMARY OF STEPS

1. Owner hires DP, develops

Scope/Design & Bid Documents

2. Owner issues Request for Proposal

Qualifications

Team of Subcontractors

3. Offerors (General Contractor) are

evaluated on criteria determined by Owner

4. Short List – Best & Final Offer(s)

5. Contract Negotiations – “GMP”


Definition -

“GMP” means Guaranteed Maximum Price and is the maximum amount to be paid by the governing body for the construction of the educational facility, including the Cost of the Work, the general conditions and the fees charged by the CMAR.

Pros:√ Early construction input in Design Phase√ Ability to Fast Track√ Ability to evaluate Construction “Team”√ Collaborative (not adversarial) process√ Early cost feed-back/value engineering√ Higher quality product √ Cost controls – Guaranteed Maximum Price


Cons:√ Must have very well-defined Scope of Work

& √ Must have clear understanding of RFP

process and the Best & Final Offer process

√ Must have committed and knowledgeable Evaluation Committee members

√ Must understand project scope/time lines Cost of work is not the only factor!


CM

Construction Manager/

Construction Management Services

Not at Risk

CMS Not at Risk

Definitions: 13-1-40.1 NMSA 1978 reads:

A. “Construction management” means consulting services related to the process of management applied to a public works project for any duration from the conception to completion of the project for the purpose of controlling time, cost and quality of the project.”

B. “Construction manager” means a person who acts as an agent of the state agency or local public body for construction management, for whom the state agency or local public body shall assume all the risks and responsibilities.

CMS Not at RiskDiscussion:1. Services procured through RFP process2. Includes a comprehensive array of management

and/or consulting services spanning all phases of design & construction process from conception to completion of the project

3. Purpose is to control time, cost and quality of project for the Owner

4. DOES NOT include professional design or professional engineering services

5. DOES NOT include acting in the capacity of a contractor or any tier of contracting for a construction project

CMS Not at Risk

Pros:√ Project management delegated to Consultant

– saves time√ CM must be licensed – qualified to perform

services required√ Level & degree of services required are

determined by the Owner√ CM represents the interests of the Owner√ Design Documents are not complete when

CM engaged—substantially complete when bid occurs

CMS Not at Risk

Cons:

√ Owner, not the CM, assumes the RISK & RESPONSIBILITY for the project

√ May require multiple contracts for subcontractors & sub subcontractor tiers

√ Control of costs/change orders may be difficult

√ Control of project close out/warranty items may be difficult to execute and control

Owner

General/SubContractors


A / E

CMS – Construction Manager(Many Separate Contracts for Design & Construction)

Responsible for own portion of Construction

Responsiblefor Design

CM

Responsible for Administration

of Project

Responsible for Performance and

Holds Trade Contracts











CMAR

CONSTRUCTION MANAGER - AT RISK

For Educational Facilities

CMAR

Educational Facility Construction Manager – AT RISK

HB 303Introduced in Legislative Session 2007

Amends 13-1-102, Competitive Sealed Bids 13-1-119.1 Competitive Sealed Proposals

CMAR Discussion:

“CM at Risk” means a person who, pursuant to a contract with a governing body, provides the preconstruction services and construction management required in a construction manager at risk delivery method for an educational facility including - Pre-construction management

Cost Estimation & consultation regarding designPreparation & coordination of bid packagesSchedulingCost controlValue engineeringActs as GC during construction

AT A GUARANTEED MAXIMUM PRICE !!

CMAR

Procured through the RFP Process

TWO STEP – UP TO $500,000

or

THREE STEP – OVER $500,000

CMAR

TWO-STEP Procurement ProcessUp to $500,000

Establish Selection Committee& Evaluation Criteria1. Solicit Qualifications2. Interview Offerors

CMAR

THREE-STEP Procurement ProcessOver $500,000

Establish Selection Committee& Evaluation Criteria1. Solicit Request for Qualifications2. Solicit Request for Proposals3. Interview Offerors

CMAR

Qualifications include: Licensing for Work to be performed Bonding Capacity Detailed statement of obligations of

all parties including Owner/CM at Risk/

and Design Professional

CMARPros:√ Possibly quicker process than DBB√ Potential CMAR can be pre-qualified and short-

listed√ CM can be brought on early – perform pre-

construction services for Owner√ Smooth integration of design & construction√ CM makes recommendations during design√ Value engineering/constructability/cost

reduction by CM prior to completion of Bid documents

√ GUARANTEED MAXIMUM PRICE Contract & schedule

CMAR

Cons:√ Loss of objectivity in selection process – Owner

selects based on Qualifications rather than Price

√ Owner may require more cost-monitoring than DBB

√ Selection of CM requires qualifications based process which may be manipulated

√ Must maintain Open Book to ensure return/cost savings to Owner of GMP otherwise, CMAR may focus on wrong goals

JOC

JOB ORDER CONTRACTING

JOC Question:

What is J O C?■ Answer:

Competitively bid, firm fixed price,indefinite quantity contract for smallconstruction services and/or installation of finished products, materials, or merchandise and equipment which will become a permanent fixture of a structure

JOC■ To construct, alter, repair, add to, subtract

from, improve, move, wreck or demolish any building, structure, facility, roadway, excavation – any part thereof

■ Perform work in connection with improvements to roofing systems, HVAC units, utility services lines, meters, etc. on an as-needed basis

JOC■ JOC Contracts in place for:

UNM, NM State University,

Albuquerque Public Schools

Los Alamos Public Schools

■ CES has JOCs for all regions

NOTE:: All procurement rules apply!

Wage Rates, bonds, insurance, etc!

CONSTRUCTION

CONSTRUCTION

DBB – Design Bid Build 5-Phase Process

Programming - Schematic Design

Design Development

Construction Documents

Bidding & Negotiation

Construction Admin

CONSTRUCTION

Programming

Complex facilities may require “programming”, to identify goals, needs, and spaces to meet those needs, such as an educational facility.

CONSTRUCTION

Schematic Design√ Program review and verification√ Development of physical spaces and their relation to each other√ Problem solving√ Cost estimating√ Presentation – input – approval to

proceed

CONSTRUCTION

Design Development

√ Refinement of the layout

√ Early development of major systems

Structural, HVAC, Electrical, Materials

√ Value Engineering

What to include or delete for budget purposes

√ Outline Specifications

√ Refinement of Project cost estimates

CONSTRUCTION

Construction Documents

√ Fully detailed drawings and specifications for bidding purposes

√ Submitted to code & regulatory agencies having jurisdiction for review

Fire Marshal, Handicap, CID

√ Wage Determination

CONSTRUCTION

Regulatory Agencies

It is the Owner’s responsibility to submit plans to regulatory agencies, however, this is generally a service that the design professional provides on the Owner’s behalf.

Changes may be required prior to bidding based on regulatory review.

BID DOCUMENTS

√ Project Manual Consists of a bound book which

includes Project bidding requirements, general terms and conditions, Project Agreement /General Conditions, Supplementary Conditions

√ Project Plans/Drawings

BID DOCUMENTS

√ The Plans/Drawings and the Project Manual together are considered the

Contract Documents

BID DOCUMENTS

Bidding & Negotiating√ Contract documents are distributed to

interested partiesPlan Deposits/Design ProfessionalPlan Rooms

Minor suppliers & subcontractors√ Contractors are encouraged to ask for clarification or to submit requests for substitutions√ Addenda are “a fact of life!”

CONSTRUCTION BIDS

MAJOR MILESTONES

1 Legal Notice2 Pre-Bid Conference3 Bid Documents/Addenda4 Bid Opening/Bid Security5 Notice of Award/Execution of Contract6 Performance & Payment Bonds7 Subcontractor Listing Requirements8 Protests

CONSTRUCTION BIDS

9 Notice to Proceed

10 Progress Payments

11 Construction Change Orders

12 Delays/Extensions/Liquidated Damages

13 Substantial Completion

14 Project Close-out

15 Warranties

CONSTRUCTION BIDS

Legal Notice13-1-104 NMSA 1978

√ Minimum requirement is 10 days from date of advertisement to bid opening

√ Construction – DBB – Industry standard is 30 days from date of advertisement to bid opening

√ Re-bid time frame is often shortened

√ Must consider the schedule and complexity of the Project

CONSTRUCTION BIDS

Pre-Bid Conference√ May be Mandatory or not√ Opportunity to review Contract Documents and field questions√ May include a Site Visit√ Open discussions on how work to be performed if it is at a site that is occupied√ Hold Pre-Bid at same location bids are to

be received – no excuses for late bids!

CONSTRUCTION BIDSBid Documents/Addenda may include:a. Definitions & Termsb. Investigation of Site Conditionsc. Bidding Procedures – form/style of bidsd. Bid Securitye. Statutory Requirements

Resident Contractor’s PreferenceCID License Number & ClassificationPublic Works Registration (DOL#)NM Tax ID Number

f. Subcontractors Fair Practices Act

CONSTRUCTION BIDSg. Protestsh. Post-Bid Information

SubmittalsPlan DepositsExecution of ContractNotice to ProceedFailure to execute a ContractContractor’s Qualification Statement

CONSTRUCTION BIDSI. Other Instructions to Bidders

Exceeding the budgeted project funds – if within 10%, Owner may negotiate a lower bid/contract amount if there are no changes to the original project scope, terms or conditions!

CONSTRUCTION BIDS

Addenda

√ Bid Form must include area to acknowledge receipt of Addenda

√ May affect responsiveness to the Bid

√ Issuing Addenda within 48 Hrs of Bid

√ Postponement of Bid Opening

CONSTRUCTION BIDS

Bid Form

1. # of Days bid shall be accepted (45 Days)

2. Acknowledgment of Addenda

3. Alternates – Additive/Deductive & order taken

4. Unit Prices

5. Signatures & Business Information

6. Licenses, Registration Numbers

CONSTRUCTION BIDS

Bid Form

Licenses, Registration Numbers

Contractor License #(s) CID

Contractor Preference # GSD/SPD

WSD(DOL) Registration #

CONSTRUCTION BIDS

Attachments to the Bid Form

1. Bid Security with Agent’s Affidavit

2. Certificate of Insurance

3. Subcontractor Listing

4. Anti-Trust Claim Form

5. State W-9/Federal W-9

Bid Security 13-1-146. Requirement for bid security. Bid

security shall be required of bidders or offerors for construction contracts when the price is estimated by the procurement officer to exceed $25,000. Bid security in an amount equal to at least 5% of the amount of the bid shall be a bond provided by a surety company authorized to do business in this state, or the equivalent in cash, or otherwise supplied in a form satisfactory to the state agency or a local public body.13-1-147 Bid Security. Rejection of bids. Noncompliance by bidder requires bid be rejected. If bidder withdraws bid before award, no action taken.

Bid Security

The Bid Bond gaps the bridge between the Owner’s acceptance of the low Bid and the Contractor’s signing the Construction Contract.

The Bid Bond is a “promise” that the low bidder (Contractor) will sign the Construction Contract.

If the Bidder fails to honor the Bid, the Surety becomes liable to the Owner for the difference between the successful bid amount and the amount that the Owner may be required to pay the second low bidder, per the amount stated in the Bid Bond face amount.

Bid Security

Agent’s Affidavit

Form to be used by the Surety

Notarized document that verifies the Surety is the “duly appointed agent” for the bidder and that the bond was given to indemnify to state of NM in connection with the construction project, and that the Surety is licensed to do business in the state.

Certificate of Insurance

Accord Certificate of Liability Insurance

Limits of Liability set by statute:

Broker’s Name/Insured’s Name

General Liability

Automobile Liability

Excess Liability

Worker’s Comp

Other

NOTE: Check signature & date of expiration!

Subcontractor Listing

Subcontractor’s Fair Practices Act Public Works Contracts chapter of the Code 13-4-31 through 13-4-42 Written to prevent bid shopping and bid

peddling, to eliminate poor workmanship, and to promote fair competition among contractors and subcontractors, prevent loss of wages


13-4-34. Listing of subcontractors; requirements.

Bid forms must state the “listing threshold” or dollar amount which shall be $5,000 or ½ of 1% of the architect/engineer’s estimate of the total project cost, not including alternates, whichever is greater.

Bid documents that don’t include a threshold can cause postponement of the bid opening until the agency complies with this statute.


13-4-34. Listing of subcontractors; requirements.

All that is required on the listing form is the name and the city or county of the place of business of each subcontractor who will perform work or labor or render service, etc.

And the category of work to be performed. Bid submitted that fails to comply is non-

responsive and shall be accepted.

Anti-Trust Claim Form

Assignment of Antitrust Claims General contractor agrees that any and all claims

that Contractor may have or that may inure to the Contractor for overcharges resulting from antitrust violations as to goods, services, and materials purchased in connection with the Bid are hereby assigned to the State of NM, but only to the extent that such overcharges are passed on to the State. Contractor further agrees to require each of its subcontractors and suppliers to assign any and all such claims to the State as well. This may be done by a signature on the Subcontractor Listing Form.

CONSTRUCTION BONDS

13-4-148.1 Bonding of subcontractors.

A sub-contractor shall provide a performance and payment bond on a public works building project if the subcontractor’s contract for work to be performed o a project is $125,000 or more.

STATE W-9/FEDERAL W-9

Requirement verification of business information for construction payments.

CONSTRUCTION BIDS Bid Opening1 Late Bids cannot be accepted2 Bids are opened in public3 The Bids are read aloud, and recorded4 Items identified in reading the bid include

acknowledgement of addenda, bid bond, agent’s affidavit, insurance, subcontractor list, and that the bid is signed

5 Subcontractor list for the apparent low bidder will be of great interest and will be requested to be read aloud

6

CONSTRUCTION BIDS

13-1-108. Competitive sealed bids; award.A contract shall be awarded with reasonable promptness by written notice to the lowest responsible bidder. Competitive sealed bid contracts shall require that the bid amount exclude the applicable state GRT or applicable local option tax but that the contracting agency shall be required to pay the applicable tax including any increase through the life on the contract. Taxes shall be shown as a separate amount on each billing or request for payment.

CONSTRUCTION BIDS

Notice of Intent to Award

Alerts the apparent low bidder to apply for the Building Permit

Execution of Contract

1 Notice of Award

2 Subcontractors List, Anti-Trust Claims

3 Performance & Payment Bonds

4 Certificate of Insurance

Performance & Payment Bonds

13-4-18 Construction contract performance and payment bonds.

When contract awarded in excess of $25,000, the following bonds or security shall be delivered to the state agency or local public body and shall become binding on the parties. Failure to deliver security shall result in rejection of the Bid and calling in the Bid Security/Bond.


13-4-18 Construction contract performance and payment bonds.

Bonds must be executed by a surety company authorized to do business in this state and said surety to be approved in federal circular 570 as published by the US treasury dept. or state board of finance or local governing authority, in an amount equal to 100% of the price specified in the contract


Bonds in General

Surety investigates financials/track record

Bonds protect Owner against damages

Tri-party agreement

Surety

Contractor (Principal)

Obligee (Owner, Lender, or General Contractor)

Cost of bonds included in Contract $


Performance Bond - Discussion

Owner is now faced with the risk that the Contractor cannot or will not complete performance in the manner specified by the Contract. Under the Performance Bond, the Surety issuing the bond stands side by side with the Contractor to assume the obligations & responsibilities of the Owner for performance of the terms of the Contractor.

Performance & Payment Bonds Performance Bond - Discussion

If the Contractor defaults, the Surety traditionally has several options under the terms of the bond. These include1. Obtaining a new Contractor at the Surety’s expense, but subject to the payment obligations of the Owner under the bonded contract2. Taking over the construction of the project or the

portion covered by the bonded contract3. Financing the Contractor so that he is able to complete the work4. Paying the Owner the amount required to complete the work, again subject always to the face amount of the bond.


Payment Bond – Discussion

Assuming that the contractor or subcontractor is able to adequately perform the physical or mechanical aspects of its work, there remains the risk that it will fail to make payment to its subs, laborers or suppliers resulting in lien claims against the project. The Payment Bond, sometimes called the labor and Materials Bond, protects the Owner from this risk and will pay the subs, suppliers, etc. for the services and materials used in the project.

Performance & Payment Bonds Other Forms of Surety Protection

1. The Personal Guaranty

●Financially able 3rd party/individual●Good only to the extent of the assets of the individual●Inconvenient & Uncertain – Owner must exercise due diligence with regards to the assets and the ability of the issuer to cause the Contractor to perform.●Value of 3rd party guaranty is limited by both the integrity and the issuer and their continuing financial liability.

CONSTRUCTION BIDS

Protests

13-1-172. Right to protest.

“Any bidder or offeror who is aggrieved in connection with a solicitation or award of contract may protest to the state purchasing agent or a central purchasing office. The protest shall be submitted in writing within 15 calendar days after knowledge of the facts or occurrences giving rise to the protest.”

CONSTRUCTION BIDS

13-1-173. Procurements after protest.

“In the event of a timely protest, the state purchasing agent or a central purchasing office shall not proceed further with the procurement unless the state purchasing agent or a central purchasing office makes a determination that the award of the contract is necessary to protect substantial interest of the state agency or a local public body.”

CONSTRUCTION BIDS

13-1-174. Authority to resolve protest.

“purchasing authorities or designee shall have the authority to take any action reasonable necessary to resolve a protest. This authority shall be exercised in accordance with regulations promulgated by the purchasing authorities to promulgate rules – but shall not include the authority to award money damages or attorney fees.”

CONSTRUCTION BIDS

13-4-175. Protest; determination.

“The purchasing authorities or a designee shall promptly issue a determination relating to the protest. The determination shall

a. state the reasons for the action taken

b. inform the protestant of the right to judicial review of the determination”

CONSTRUCTION BIDS

13-4-176. Protest; notice of determination.

“A copy of the determination shall promptly be mailed to the protestant and other bidders or offerors involved in the procurement.”

CONSTRUCTION BIDSNotice to Proceed

1 Occurs once the contract and all contract documents are fully executed and in order.

2 Notifies Contractor to begin work within 10 days of Notice to Proceed.

3 Verifies the number of days to completion of the project unless modified by Change Order.

4 Spells out any other conditions the Owner places on the contract, such as “all paperwork must reference the project number, name, etc.”

CONSTRUCTION BIDS

Project Budget/Re-Bid/Negotiation13-1-105. Competitive sealed bids; receipt and

acceptance of bids.If the lowest responsible bid has otherwise qualified and if there is no change in the original terms and conditions, the lowest bidder may negotiate with the purchaser for a lower total bid in order to avoid rejection of all bids for the reason that the lowest bid was up to 10% higher than budgeted project funds. Such negotiation shall not be allowed if the lowest bid was more than 10% over budgeted project funds.

CONSTRUCTION BIDS

Project Budget/Re-Bid/Negotiation

13-1-106. Competitive sealed bids; correction or withdrawal of bids. A bid containing a mistake discovered before bid opening may be modified or withdrawn b a bidder prior to the bid opening by delivering written or telegraphic notice to the location bids are being received. No modifications are allowed after bid opening.

CONSTRUCTION BIDS

Project Budget/Re-Bid/Negotiation13-1-106. Competitive sealed bids; correction or

withdrawal of bids. A low bidder alleging a material mistake of fact which makes his bid non-responsive may be permitted to withdraw its bid if:

1) The mistake is clearly evident on the face of the bid documents; or

2) The bidder submits evidence which clearly and convincingly demonstrates that a mistake was made.Any discussion to permit or deny withdrawal of a bid shall be supported by a determination setting forth the grounds for the decision.

CONSTRUCTION BIDS


13-1-131. Rejection or cancellation of bids or requests for proposals; negotiations.

An ITB, RFP or any other solicitation may be canceled or any and all bids or RFP’s may be rejected in whole or in part when it is n the best interest of the state agency or a a local public body. A determination containing the reasons for the cancellation shall be made a part of the procurement file.

CONSTRUCTION BIDS


13-1-131. Rejection or cancellation of bids or requests for proposals; negotiations.

If no bids are received or if all bids are rejected, then new ITB shall be requested. If upon re-bidding the bids are unacceptable or no bids were received, you may purchase the property, construction or services in the open market at the best obtainable price.

CONSTRUCTION BIDS


13-1-132. Irregularities in bids or proposals.

You may waive technical irregularities in the form of the bid or proposal of the low bidder or offeror which do not alter the price, quality or quantity of the services, construction or items of tangible personal property bid or offered.

CONSTRUCTION BIDS

Project Budget/Re-Bid/Negotiation13-1-133. Responsibility of bidders and offerors.

If a bidder or offeror who otherwise would have been awarded a contract is found NOT to be a responsible bidder or offeror, setting forth the basis of the finding, shall be prepared by the procurement official. The unreasonable failure of a bidder or offeror to promptly supply information in connection with an inquiry with respect to responsibility is grounds for a determination that the bidder or offeror is not a responsible bidder or offeror.

CONSTRUCTION

Progress Payments

Before the first request for payment, Contractor submits a “Schedule of Values” to the Design Professional.

Allocates the Contract Sum to various portions of the Work (Site, Electrical, HVAC, etc.)

GRT added as a line item to the Schedule of Values

CONSTRUCTION

Progress Payments

Application/Certificate for Payment – AIA Document

- Invoice to be submitted by 25th of the month to DP for review

- DP verifies request for payment with Owner and Project Superintendent by means of a “walk through” on the Project

-DP signs request and forwards to Owner for payment

-Invoice to Owner by the 10th of the month (to be paid not later than 21 days following the end of the period covered by the Application for Payment)

Changes in the Work

“Construction is not a perfect science”. Things happen, changes occur – either by omission, unforeseen circumstances, or requests for change by the Owner”.

“Changes may include additive or deductive costs to the Contract Sum, or changes in the Contract time”.

“Documentation (proposals, breakdowns, etc.) must accompany the Change Request”.

“Once approved, the Request becomes a Change Order and must be signed by the Owner, the Design Professional and the Contractor”.

Delays/Time Extensions

Justifiable Delays/Time Extensions to the Work

1. May be caused by the Owner or Design Professional

2. Subcontractors/labor disputes

3. Delays in deliveries

4. Un-controllable circumstances (weather)

5. Unavoidable casualties (war)

Liquidated Damages

Contract Time is reasonable for completion of the Work/Project with consideration to weather and reasonable delay in deliveries

Assessed if Contractor neglects, fails, or refuses to honor Contract Time

Contractor pays the Owner for such delays, though amount is difficult to ascertain

May be deducted from Payments Final accounting is determined at Substantial

Completion

Substantial Completion

Contractor notifies Owner project is complete Design Professional prepares a formal

“Certificate of Substantial Completion” Includes a list of defects for correction (Punch

List) that are noted in a “walk through” of the Project

If Project is acceptable, Certificate is signed by all parties (Owner, DP, Contractor)

Substantial Completion Some deficiencies may not be apparent at the “walk through”

These items may be subject to the same warranties/repair remedies as the rest of the Project.“If the roof is not leaking at walk through because its sunny, the roof is still guaranteed per the Project requirements (warranties).

NOTE: Certificate of Completion Form shall stipulate a time frame adequate to complete the Punch List deficiencies

This can be a very slow process, as the subcontractors/trades have moved on to another project.

Close-Out of Project

Once all deficiencies are corrected, the Project is ready to be “closed out”.

Once closed out – the Contractor may apply for Final Payment

Typical Close-out Check List prior to Contractor’s submittal of Final Payment Request includes:


Certificate of Substantial CompletionKeys turned over to OwnerFinal Walk Through (Punch List complete)Utilities turned over to Owner, Contractor’s

portion paidOperations & Maintenance Instructions

completedOperations & Maintenance Manuals turned

over


Test Adjust Balance Report completedWarranties: (From date of Substantial

Completion)Metal Roof at Portal – 20 year finishMetal Roof at Portal – 2 year performanceBuilt-up Roof at Bldg – 2 year product &

workmanshipHardware Closures - 10 yearsWood Doors - Life of the building


Permit Copies:

Certificate of Occupancy

As-Built documents submitted to DP

Release of Liens

Consent of Surety


Warranties – are covered by contract law. A warranty is a “promise” by a party to a contract to do a particular thing. Most often warranties are express promises, made either in writing or orally. The most common warranties are in construction contracts to build in accordance with the plans and specs, and to guarantee the integrity of the work for a specified period of time after the completion of the project.

THANK YOU!!

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