#8 Cost Estimate and Bid Documents

Read Chapter 7 Bidding and Procurement in Construction Project Management by Gould and Joyce
Factors of Bid Process

If a project has the ingredients necessary to return a good profit, the motivation to bid is high.

The factors that make one company succeed over another include:
- Relationships with key subcontractors
- Knowledge of and experience with the specific type of project
- Ability to buy out the job
- Estimating capability
- Project team setup
- Safety records
- How efficiently they conduct their business
- Overhead costs

Direct costs + Indirect Costs = Cost of the work
Cost of the work + % of Overhead and Profit = Total Cost to the Owner


Invitation to Bid/Bid Advertisement
-Abstract description of the project
-Critical time lines
-Contact information
-Information on obtaining bid documents
-Reference to regulatory requirements

Information contained within Bid Documents

-Instructions to Bidders
-Project Manual/Construction Documents
-Bidder Qualifications/Pre-qualified bidder
-Bid Form
-Alternatives
-Unit prices
-Bidder proposed alternatives
-Bid Addenda

Contractual Information
-Form of Owner/General Contractor Agreement (Contract)
-General Conditions of the Contract
-Special Conditions
-Bid Bond
-Performance Bond
-Insurance requirements
-Requests for bid clarification/question period and procedure
-Required prebid meeting
-Site availability to for prebid existing conditions review

Insurance

Workers’ compensation: State law that compensates employees who are injured on the job. (covers disability and medical treatments)

Comprehensive liability: Protects the contractor against third-party claims.

Builder’s risk: Property insurance for the building, while it is under control of the contractor. Protects against property damage during construction. (covers losses resulting from fire, smoke, water, explosions, vandalism, and theft)

Bonds

Bid Bond: If the contractor withdraws, he or she agrees to pay a percentage of the bid cost as stipulated in the bid documents—usually 5 to 10 percent of the bid itself.

Performance Bond: If the contractor goes bankrupt or otherwise cannot complete the work, the bonding company becomes liable for it.

Payment Bond: Also called labor and material bonds. This assures that the contractor will pay all the bills, thus leaving the owner unharmed by claims and liens.

Bid submital procedure
-Location Time and Date specific for receipt of bids and procedure
-Bid opening procedure, Location, Time and Date, public or private
-Definition of a complete and responsive bid

Bid analysis procedure
-Public agency requirements; public record
-Non-public entity; requirements developed to comply with regulatory requirements for entity
-Review of documents required with bid
-Review and comparison of bid total, requested itemized costs, requested unit costs, requested alternate costs, bidder offered alternates.
-Review of bidder qualifications and previous projects of similar type
-Review of credit history, accountants statement, current and prior legal actions.
-Review insurance and bonds

Contract Award procedure
Identify bid that conforms with definitions provided in bid documents for qualified responsive bidder in the best interest of owner, which may not be the lowest bidder. There owners bid team may identify a number of bidders that that fit this definition, the bid team may then meet with the bidders individually to review the bid before making an award of contract.

If a public entity; all bidders must be notified that a contract has been awarded, additional details for the notification may be required by regulation of the entity.

If a private entity; notification to other bidders of the contract award may be required by the structure of the entity and nature of regulation.

If any part of the bid process involves a publicly traded entity; Securities and Exchange Commission regulations must be followed, including limits on insider trading for all individuals that are part of the bid process.

Public agencies, publicly traded entities, private corporations and partnerships, and larger private entities will have legal staff review the bid procedure and award before an award is made.

Requirements; award of contract to notice to proceed
Upon award of contract the GC will commence assembling required project administrative documentation which may include;
-Project insurance for the site and proposed work
-General Liability insurance for the project, listing the owner
-Confirm other insurance including; workers compensation, vehicles and equipment
-Performance bond

Identify key GC staff for the project, and contact information;
-GC's Construction Management team and site supervision team

Schedule of Values
GC prepares final schedule of value for major work categories for use in payment request during construction, to be reviewed and approved by owners project team, with contract award total.

Project Schedule
GC prepares project schedule with major categories from schedule of value, to be reviewed and approved by owners project team. The GC for internal and project management use will prepare a more expansive and detailed project schedule.

Notice to Proceed
Upon satisfactory review by the owners team of required documentation, schedule of values and project schedule the owner will issue a "Notice to Proceed" with a specific date and time. The GC has sole control and responsibility for the project site, as defined in the notice to proceed, including access by owners team, until substantial completion.

The GC will commence preconstruction activity including;
-secure contract required permits and meet with local inspectors
-subcontract final negotiation and sign contracts
-material and component supply contracts
-meet with utility providers and confirm schedules
-initiate "One-Call" procedure
-schedule mobilisation activity

Commence on site activity

Assignment for Monday
Prepare schedule of values for payment voucher (major items without labor, material and equipment or quantity breakdown)
-Mobilization
-Storm water management during construction
-Site grade to establish rough sub paving grade
-Below grade permanent stormwater management system
-Light Pole complete system
-Curbing
-Paving system including stripping
-Concrete pads
-Prefab structure and gate control (allowance $175,000)
-Landscape (allowance $200,000)
-Permanent fence

Prepare project schedule for same items, an item may be subdivided into parts; A, B, C,... but don't create sub-elements for this schedule.
Use the crew hrs line for scheduled item duration from NCCE, or make a reasonable guesstimate.

Coming next;

#9 Schedule of values - Project Schedule - Value engineering

#10 Payment voucher/cash flow

Chapter 11 Controlling Project Cost, Time and Quality; Construction Project Management by Gould and Joyce