The Bid Package Part III

The Bid Package Part The Bid Package Part IIIIII

Components Of A SpecificationComponents Of A Specification

► Specifications are divided into Specifications are divided into three major sections (with three major sections (with subsections ) as follows :subsections ) as follows :

1.1. Bidding and Contractual Bidding and Contractual DocumentsDocuments

2.2. Conditions of the Contract Conditions of the Contract

3.3. Detail (technical) SpecificationsDetail (technical) Specifications

Specification Part 1: The Bidding and Specification Part 1: The Bidding and Contractual DocumentsContractual Documents

► Invitation to BidInvitation to Bid► Instruction to BiddersInstruction to Bidders► Proposal FormsProposal Forms► ProposalProposal► Bid SheetsBid Sheets► Contractor CertificatesContractor Certificates► List of SubsList of Subs► Bid Bond FormBid Bond Form► Non-Collusion AffidavitsNon-Collusion Affidavits► Agreement (Contract)Agreement (Contract)► Performance Bond FormPerformance Bond Form► Payment Bond FormPayment Bond Form

Specification Part 2: General Specification Part 2: General Conditions/Special ConditionsConditions/Special Conditions

ASCE Standard Construction Documents:ASCE Standard Construction Documents:“Boilerplate Documents”“Boilerplate Documents”

The Engineers Joint Contract Documents Committee The Engineers Joint Contract Documents Committee (EJCDC) develops and updates fair and objective standard (EJCDC) develops and updates fair and objective standard construction documents.construction documents.

We will review the ASCE documents in this course, but AIA We will review the ASCE documents in this course, but AIA documents are similar.documents are similar.

EJCDC is affiliated with ASCEEJCDC is affiliated with ASCE

Documents represent latest thinking in contractual Documents represent latest thinking in contractual relations in engineering design and construction projectsrelations in engineering design and construction projects

The AIA DocumentsThe AIA Documents► The American Institute of Architects also provides “boilerplate The American Institute of Architects also provides “boilerplate

documents” for a fee.documents” for a fee.

► These are commonly accepted documents and endorsed by These are commonly accepted documents and endorsed by AGC.AGC.

► AIA Contract Documents comprise over 80 forms and AIA Contract Documents comprise over 80 forms and contractscontracts

Define relationships and terms involved in design and Define relationships and terms involved in design and construction projectsconstruction projects

Prepared by the AIA with the consensus of owners, contractors, Prepared by the AIA with the consensus of owners, contractors, attorneys, architects, engineersattorneys, architects, engineers

The documents are now widely recognized as the industry The documents are now widely recognized as the industry standard.standard.

► http://www.aia.org/http://www.aia.org/

Part 3: Technical SpecificationsPart 3: Technical Specifications

► Although the drawings define the job visually:Although the drawings define the job visually: geometry, dimensions and physical details of the project,geometry, dimensions and physical details of the project,

► The technical specifications define the administrative The technical specifications define the administrative and quality requirements of the projectand quality requirements of the project spell out administration of the projectspell out administration of the project

complement the drawings by defining materials, complement the drawings by defining materials, workmanship and proceduresworkmanship and procedures

meant to be used throughout the project meant to be used throughout the project

Detail (Technical) Detail (Technical) SpecificationsSpecifications

► Technical sections cover various parts of the Technical sections cover various parts of the project:project:

►Workmanship, materials, methodsWorkmanship, materials, methods

► The Construction Specifications Institute (The Construction Specifications Institute (CSICSI) ) has developed standard “numeric codes” for has developed standard “numeric codes” for work.work.

► These numeric codes are used in specification These numeric codes are used in specification writing. writing.

► CSI Codes are on course website.CSI Codes are on course website.

What If There are Conflicts Between What If There are Conflicts Between Drawings and SpecificationsDrawings and Specifications??

► Unless noted otherwise, the specifications Unless noted otherwise, the specifications govern.govern.

►Therefore, specifications are the Therefore, specifications are the single most important project single most important project document.document.

► They should be well known by the project They should be well known by the project administrator.administrator.

Development of The Company Development of The Company Technical SpecTechnical Spec

►Each engineering/architectural firm Each engineering/architectural firm will develop their own technical will develop their own technical specification.specification.

►These are based on experience, These are based on experience, industry standards & design expertise industry standards & design expertise

What Happens When What Happens When Specifications are Not Well Specifications are Not Well

Written?Written?

Scope of Work Scope of Work Disputes!Disputes!

►For Example:For Example: small projects = small budgetssmall projects = small budgets lack of sufficient detaillack of sufficient detail

►Outcome:Outcome: Work is not within expectations of the ownerWork is not within expectations of the owner

HOW CAN WE AVOID SCOPE OF WORK HOW CAN WE AVOID SCOPE OF WORK DISCREPENCIES IN SPECIFICATION DISCREPENCIES IN SPECIFICATION

WRITING?WRITING?► Allow adequate budget for drafting of Allow adequate budget for drafting of

specificationsspecifications

► Control of specification development Control of specification development should be the responsibility of one should be the responsibility of one qualified person in the companyqualified person in the company

► Specifications for each job should be Specifications for each job should be developed from “master specification developed from “master specification document”document”

► ““Master specification” updated Master specification” updated annually to be sure it is current with annually to be sure it is current with industry standardsindustry standards

Generalities Should Be Generalities Should Be AvoidedAvoided

► Some phrases in specifications and drawings can Some phrases in specifications and drawings can make an item “unbiddable” due to complete make an item “unbiddable” due to complete vagueness.vagueness.

► These “unenforcable phrases” should be avoided These “unenforcable phrases” should be avoided in specification writing:in specification writing: To the satisfaction of the engineerTo the satisfaction of the engineer As determined by the engineerAs determined by the engineer In accordance with best standard practiceIn accordance with best standard practice As required by the engineerAs required by the engineer Workmanship shall be of the highest qualityWorkmanship shall be of the highest quality

Other Contract Documents: Other Contract Documents: AddendaAddenda

►Changes to project AFTER job has been Changes to project AFTER job has been put out for bid and BEFORE bid is awarded put out for bid and BEFORE bid is awarded are incorporated through Addenda.are incorporated through Addenda.

►Rapid communication to bidders is critical.Rapid communication to bidders is critical.

►Delivery is documented to protect the Delivery is documented to protect the bidding process.bidding process.

Other Contract Documents: Other Contract Documents: BondsBonds

What is a Bond?What is a Bond?► A bond is a 3-way contractual relationship:A bond is a 3-way contractual relationship:

Obligee (owner of the project)Obligee (owner of the project) Principal (contractor)Principal (contractor) Surety (bonding company)Surety (bonding company)

► A bond protects the owner against default of the A bond protects the owner against default of the contractorcontractor

► The surety provides protection in case of The surety provides protection in case of contractor’s defaultcontractor’s default

Bid BondBid Bond► Protects owner against Protects owner against damagedamage if contractor if contractor

fails to enter Contract.fails to enter Contract.

Ie, contractor realizes the job is underbid Ie, contractor realizes the job is underbid and would take a financial loss--does not and would take a financial loss--does not want perform work or enter into contractwant perform work or enter into contract

Bond would pay owner the $$ cost Bond would pay owner the $$ cost difference between initial & next lowest biddifference between initial & next lowest bid

Required face value of bond is given in the Required face value of bond is given in the Instructions to BiddersInstructions to Bidders

Government jobs often require a bid bond Government jobs often require a bid bond that is 10% of the bid price.that is 10% of the bid price.

Performance BondPerformance Bond► If contractor is awarded the job a performance bond is If contractor is awarded the job a performance bond is

requiredrequired

► Guarantees the completion of the project in accordance with Guarantees the completion of the project in accordance with contract documents (plans, drawings & specifications)contract documents (plans, drawings & specifications)

► Bond must be delivered to owner at time of signing of Bond must be delivered to owner at time of signing of contractcontract

► Who’s protected?Who’s protected? OwnerOwner Lending InstitutionLending Institution

What if Contractor What if Contractor Defaults?Defaults?

► Bonding company may assist contractor by Bonding company may assist contractor by providing short-term financing.providing short-term financing.

► Bonding company may take over job and Bonding company may take over job and attempt to take it to completion.attempt to take it to completion.

► All costs are paid All costs are paid up to the face valueup to the face value of of the bond.the bond.

Maintenance BondMaintenance Bond► Bond purchased by contractor

► Protects the owner of a completed construction project for a specified time period against defects and faults in materials, workmanship and design that could arise later if the project was done incorrectly

► Assures contractor will either correct any defects that arise or that the owner is compensated for those defects

Payment BondPayment Bond

► Protects owner from liens (mechanic’s liens) Protects owner from liens (mechanic’s liens) against project due to nonpayment of against project due to nonpayment of subcontractors and material suppliers by subcontractors and material suppliers by contractor.contractor.

► Surety (bond) will pay outstanding debtsSurety (bond) will pay outstanding debts

Legal Bond Obligations of Legal Bond Obligations of the Contractor (Principal)the Contractor (Principal)

►Contractor is required to pay Contractor is required to pay surety for any loss as a result of surety for any loss as a result of the bondthe bond

►Contractor Contractor maymay be required to be required to sign agreement allowing seizure sign agreement allowing seizure of personal assets in event of of personal assets in event of default default

(if assessed as a high risk)(if assessed as a high risk)