lecture 14 Flashcards
How do we select contractors under different types of contracts
Under lump sum:
Look at the value and compare to other , we look at the average, we look at the range, we look at the engineer estimate.
Under cost plus fee:
we can ask the contractor for a fee and a gauranteed maximum price.
Lowest fee and Lowest GMP Best one to choose.
If not, we evaluate it qualatitively (project is well know implies GMP must not be very high) and quanitatively (we do exxcel sheet.
Selecting contractor under unit price contract (remeasured type of contract , based on the field not on the office)
If you have estimated quanitities given from the client and u gave the price , you dont have the exact quantities because you are not in the field yet.
What could happen?
If the contractor knew that the estimated quantities were wrong, he can change the price in a way that he can even make more profit money during the work field ( the bid money will be the same, willl remain competitive), or he can have a lower bid value of money but he will still make the same amount of profir, or he can do a combination of both.
The gain can be competitive or finanacial or both.
Same if the contractor noticed that the quantity will be lesss
They do that by changing the unit prices.
This is call bid unbalancing
This bid unbalancing is unethical
true
addendum
an information update for the contractors bidding( change in design , in quantities……)
Bid unbalacing can also be done is lump su, you can price the early works higher (project delivered packages)
true
Selecting contractor based on different client objectives (cost, time)
if the client wants the cheapest with a delivery date determined , he will choose the lowest cost;
if the client asks the contractor to give both time and cost; more flexibility to the contractor, to select the best contractor I need to understand the relationship between the money and time, maybe each moth of delay is 2 million dollars rent value. I compare and see.
Best price for time. move them to the same date and compare them
performance based contract (It will be based on performance)
You will have a fixed cost , in addition to gains based on the performance, like if you get the road with 2% voids , you will have 70 million dollars, if u get them 5% u will get less .
Quality may be very critical for some facilities.
If contractor fails to meet certain quality he willpay a penalty
How we select bidders
we can do prequalifications (before bidding , reviewing the profiles of the contractors, do u have experience, workforce, machines, programs used, prelimanry gaurantees like statements from banks)
collateral
agreement that if a contractor fails to pay, they will go after their assets
bid bond=bid gaurantee
when u want to bid so u are not fake contrator
performace gaurantee(bond)
after u are selected , u submit because if u fail to perform to perform on the site (workers machines…)
payment bond
aurantee from the contracotr if the contractor fails to pay his subs, because the sub has the right to follow the owner if he is not paid
At end of defects liability period, contractor has to submit evidence that he had paid all his subs
true
Sometimes i do post qualification
because i dont want to lose all possible contractors, also i dont want to end with too little contractors
for bidding we give the contractors
quantitis, design , specs, condtion of contract
