Comparison of Bidding Phase for Public Vs Private
-The bidding process decides the project cost to a large extent due to its competitiveness nature.
-In public works projects, the bidding procedure is
strictly outlined, while in the private sector the process is often varied.
What are the 4 main procedures in Bidding Phase?
- Advertisement
- Prequalification
- Value Engineering
- Bidding (Estimating) Period
1) What happens during the advertisement stage for Public Works?
- Notice must be given to interested and qualified
members of the construction community in advance of the bidding. - The invitation for bids must be posted in public
places and distributed to the local construction community. - All bidders must be treated alike and be afforded an opportunity to bid under the same terms and conditions.
Essential Information of Notice to Bidders
(NLTD, 2 payment, 3 Bids)
1) Nature of Project
2) Location of Project
3) Types of contract for construction
4) Dates of work
5) Terms of payment
6) Estimated construction cost
7) Time, manner and place to submit bids
8) Location to obtain bid documents.
9) Deposit required on bid documents.
Pros of Public Bid Process?
[O,O,C,G]
1) Owner benefits from competitive marketplace
2) Owner is impartial and fair
3) Embraces the fundamentals of free market system
4) For some governmental agencies is the only viable method
Cons of Public Bid Process?
1) Until project completion, accurate cost is unknown
2) Bidding process is overall time-consuming
3) Errors/omission in design result in costly changes for Contractor after contract award
2) What is Prequalification?
Screening of potential bidders to develop a list of qualified bidders who will receive the invitation-to-bid (ITB) documents. Need to consider experience, finances, reputation.
The elimination of contractors through prequalification cannot be too restrictive to eliminate competition.[Absurd standards]
3) What is Value Engineering (VE)?
Specific procedure that is carried out to determine if
alternative methods or materials might be more
appropriate.
Purpose of VE?
[O,R,I,D]
1) Overall cleaner bidding docs
2) Reduce Cost
3) Improve/Maintain proj quality
4) Decrease proj duration
Procedures of VE?
[I,F,I,A,D,P]
- Information phase
- Functional analysis phase
- Innovation phase
- Analytical phase
- Development phase
- Presentation phase
4) What is the Bidding (Estimating) period?
o Decision to Bid
o Bid Form
o Bid Submission
o Contract Award
Under Bidding (Estimating) period what are factors leading to the Decision to Bid?
Factors to consider: [B,L,O,A,N] o Bonding capacity (FOR contractor) o Location of the project o The owner’s financial status o The architect/engineer o Nature and size of the project
Under the Bidding (Estimating) period what is in the Bid Form?
8 Common req: [P,T,B,A,A,L,E,D]
o Price (lump sum or unit price).
o Time of completion (often given by the owner)
o Bid surety
o Agreement to provide contract surety
o Acknowledgment of having reviewed addenda
o List of subcontractors used in the final bid
o Experience record, financial statement, plant
and equipment inventory.
o Declaration regarding fraud and collusion.
The bid form ensures accuracy in providing the necessary information and prevents the possibility of having omissions in the bids.
Can bidders modify/withdraw their bids?
o Once a bid is submitted, it is common to permit
bidders to withdraw or modify their bids,
provided that the request is made prior to the
bid opening.
Under the Bidding (Estimating) period what is Contract Award?
Three criteria are used to select the most appropriate contractor: o Lowest (easy to determine for lump sum contracts) o Responsible (eliminate incompetent, underfinanced) o Regular (Ability to follow up bidding instructions)
