Friday, April 24, 2009

Reconmended bid procedures part 4

4. Day and time for receiving bids

The Issue: Upon what days of the week, times of the day and under what conditions should bids be received?

Discussion: Owners who wish to receive the most competitive bids must recognize that the construction industry has certain days and times to tender bids which are much preferred. The preferred days are Tuesday, Wednesday, and Thursday. The preferred time is a time specific between 2:00 p.m. and 4:00 p.m. local time. Bids tendered at times and on days other than these will receive substantially less coverage and very likely will be higher.


1. Bids should be received at a specific time between 2:00 p.m. and 4:00 p.m. on Tuesday, Wednesday, or Thursday.

2. Bids should not be received on holidays, on the day before or after holidays, nor during the week between Christmas Day and New Years Day.

3. Prime Bidders should be afforded telephones in close proximity to the place for receiving bids for receiving and recording last minute changes to their bids.

4. The time of receipt should be clearly stated and strictly enforced. An official clock should be displayed in the place receiving bids, and the person receiving bids should stamp bids received with the time of receipt and publicly state when the time for receipt of bids has elapsed. Bids received after that time should not be accepted.

5. The Owner’s construction budget for the project and basis for selecting the low bidder should be announced prior to opening bids. See also Section 10, Pre-Bid Conference and Section 19, Owner’s Proof of Financial Ability.

6. Bids should be publicly opened and read aloud. Obvious problems with a bidders responsiveness (e.g., no bid bond, failure to acknowledge addenda, failure to comply with listing requirements, etc., should be noted). If protests are allowed, the mechanism for them should be set out in bidding documents.

7. Other pertinent bid information (alternates, Subcontractor listing, etc.) should also be read aloud.

8. Interested parties should be allowed to review the bidding documents of all bidders.

9. The schedule for award should be announced. Bids should not be held longer than sixty (60) days without an award announcement being made.

10. Complete bid results should be formally published in a timely way.

Recommended bid procedures Part 3

2. Advertisement for bids

The Issue: Should a bid be advertised? If so, what information should be included in the advertisement?

Discussion: A typical bid advertisement is issued prior to the issuance of bid documents for the purpose of attracting prospective bidders. It may be mailed to individual firms, published in an appropriate newspaper or magazine of general circulation in the construction industry, and/or posted in plan rooms.

Recommendations: A bid advertisement should:

1. Be circulated sufficiently in advance of the distribution of bidding documents to allow prospective bidders to include the project in their respective bid calendars. The minimum advance notice should be 30 days prior to bid document issue.

2. Contain a short description of the project including bid date, time, approximate contract amount, approximate size (or capacity), project location, licensing requirements, and bid and performance and payment bond requirements.

3. Be circulated to both individual Prime and major Subcontractor and Material Supplier prospective bidders, published in construction oriented magazines and newspapers, and posted in plan rooms.

4. State date of document availability, location to obtain documents, and deposit and refund provisions.

Hugolina -

Recommended bid procedures Part 2

1.2 Invited or selected bidders-subcontractors and material suppliers

The Issue: Should Subcontractor and Material Supplier bids be received from any Subcontractor and Material Supplier or only from those which the Owner pre-qualifies?

There are two principal schools of thought on this issue. One is that the Prime Bidder should bear the responsibility for the Subcontractors and Material Suppliers it uses. The other is that the Owner has a valid interest in assuring itself as to the capability of its Subcontractors and Material Suppliers. An associated question for Owners in this case is the extent to which pre-qualification is carried. Some Owners choose to pre-qualify only mechanical and electrical Subcontractors; others pre-qualify these and roofing, masonry, and excavation Subcontractors; still others pre-qualify all Subcontractors. Whether and to what extent Subcontractors are pre-qualified is the choice of the individual Owner. Many Prime Bidders would prefer the Owner not pre-qualify Subcontractors and/or Material Suppliers.

Where Subcontractor pre-qualification is used:
1. The names and disciplines of all pre-qualified Subcontractors and Material Suppliers should be published concurrently with those of pre-qualified Prime Bidders.
2. All pre-qualified Subcontractors and Material Suppliers should be able to furnish payment and performance bonds for the project being bid to the Prime Bidders, and to identify the cost for such bonds

Hugolina -

Recommended bid procedures part 1

1. Invited or selected bidders

1.1 Invited or selected bidders-prime bidders

The Issue: Should Prime bids be received from any Prime Bidder, or should bids be received only from invited (Pre-qualified) Bidders?

Many public Owners are required by law to solicit and accept bids from any bidder which meets the criteria set forth in the bidding documents (e.g., which provides a bid bond, properly executes its bid form, etc.).

These criteria are often inadequate to determine whether the Prime Bidder is “responsible”. That is, such criteria fail to determine whether the firm has the financial and organizational resources necessary to bid and construct the project under consideration.

For this reason, many Owners use a pre-qualification process to gather information from and about a prospective bidder prior to issuing bid documents. After evaluating this information, the Owner selects those Prime Bidders which it determines are best qualified to both bid and construct the project.

Recommendations: Where pre-qualification is used:

1. The number of Prime Bidders selected should be limited to no more than four to six. This number will insure both adequate and spirited competition.

2. The selected Prime Bidders and the construction community at large should be notified of the names of selected Prime Bidders prior to issuing bid documents.

3. Bids should be publicly opened. See also Section 4, Day and Time for Receiving Bids.

4. The contract should be awarded to the lowest responsive bidder.

5. All pre-qualified Prime Bidders should be able to furnish payment and performance bonds for the project being bid to the Owner, and to identify for the Owner the costs for such bonds.

Quality control mechanisms

* Centralized system
- For quality control and assurance of quality
- Quality control independent of production
- Authority and independence of quality manager
- Effectively insulated from commercial pressures
- Quality control is in isolation from production
- Precluded in planning of procedures for prevention of defects
- Tend to be expensive

* De-centralized system
- Responsibility on workers
- Production manager develops plans, and routines for inspection and testing
- Inspection and testing conducted by production staff with defined and documented control programs
- Independent quality assurance manager