preparing bid packages for construction projects

The bidding processes require a wide range of knowledge as well as skills. A number of these skills and expertise is developed from practical experience obtained in managing constructions works and designing, while other skills are obtained from past experiences in carrying out procurement processes. Experienced architects with a record of project management are likely to have good negotiation skills and vast knowledge needed when advising the owner regarding the proper procurement and contracting procedures of a project to be carried out. After approval of construction designs or drawings and the project budget accepted, what follows is the preparation for construction bidding, as noted by Damkin and American Institute of Architects (2008) this is termed as the “bid preparation process” stage of the project management. As further explained by Damkin and American Institute of Architects (2008), a bid package is a summary of general procedural information including specific project information, bid forms and forms for property investigation. During this process the project manager prepares the requisition for bidding as well as advertising. It is mandatory that bid packages comprises complete design packages so as to provide potential bidders with the necessary information to make competitive proposals for the successful completion of the project. The information available on the bid package guides a contractor to decide whether to bid or not. Nonetheless, for the whole process to be done professional and effectively, it has to adhere to best practices guiding the whole process. According this paper critically examines the best practises in preparing bid packages for construction projects

 

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Bid package documents

These documents correspond to a description of the potential construction project. The responsibilities of various parties and how the contract will be administered are also well spelt out in these documents. Moreover, they establish the basis for bid price determination and influence prospective bidder’s willingness to enter into a contract (Damkin and American Institute of Architects, 2008). As a best practice, bid package documents should be prepared in a manner that truly reflect the project and the owner’s administration intentions to ensure that bidders are provided with the necessary information that can influence the bidding process to the project owner’s advantage.

 

Benchmarking as a best practice

This method focuses on performance improvement in a logical and systematic way, by doing a comparison of various bid packages from the best bid packages to make significant improvements on the package (Gibson, et al. 1996). Benchmarking ensures that the bid package is designed in a manner that guarantees success of the project. It ensures that improvements on the package documents are based on what others have actually achieved and thus ensures value addition to the package.

 

Lean Construction approach

The Institute of management and Construction highlights the value attained in the lean construction approach and stresses that the practice is subjective to the way the owner of the project envisages value in perception (Institute of Management and Administration, 2006). Once the architect understands this, then bid package documents including project construction designs can be prepared in a manner that will reduce cost or eliminate any other process that is likely to add cost but has no value addition. The technique of value engineering, which allows project managers to identify and select best value alternatives for project designs, can be incorporated in this approach to ensure that adopted project designs that will eventually appear in the bid package are cost friendly and value oriented. This technique ensures that bid packages are prepared in a manner that does not attract high prices from bidders and at the same time ensures that the whole construction process will be cost effective.

 

Document clear project requirements

It is imperative that a bid package encompasses the entire necessary information requisite for guiding the prospective bidders in their bidding decisions. For this reason, it should clearly enlist the project scope so that prospective bidders can understand the intended accomplishments of the project. Apart from the project designs and other bid forms, a good construction project bid package should provide information on services scope. This should also include a well illustrated outline of the work to be done and materials to be used, responsibilities for acquisition of additional legal documents like construction permit, work time line, criteria for assessment of work quality, and prequalification for bidders (Damkin and American Institute of Architects, 2008). This perspective is also supported by Gibson et al (1996) who noted that providing salient information as highlighted above is not only a gesture of complying with the dictates of best practice, but it also helps in underscoring the importance of following stipulated performance standards. Standards compliance is thus bolstered by the information supplied together with the bid package and which is accessible to contractors.

Make the package attractive

Making the project attractive to the contractors is justified by the heightened competition in the market. Contractors have a wide range of projects to bid from hence it is important to understand what features attract contractors more. The main intention of the procurement phase of the project is to obtain the most qualified and cost effective contractor in the market. A bid package is like an advertisement of the project to the potential contractors. Gibson et al. (1996), points out that the attractiveness of the bid package highly determines the probability of getting a prospective bidder. One characteristic of an attractive bid package is an inclusion of clearly highlighted potential benefits of the project to the contractor. Presenting all salient issues pertaining to the project also augments the attractiveness of the package. Issues like contractor milestone and incentives should be well documented in the bid package. An objective assessment of the market situation also goes a long way towards ensuring that the bid package is prepared in line with the bidders’ demands and the owner’s expectations.

 

Cost plus time approach

This approach dictates that project engineers should be wary of costs in terms of time for the process and costs for the bidding process. Therefore, the approach proposes that the engineers ensure the lowest possible costs for the bidding process. In addition, they should ensure a reduction in time for the whole process so that the two aspects of concern (cost and time) are taken care of. As explained by the Institute of Management and Administration (2006) Bidding is part of the construction project cycle, therefore as a best practice, the process takes the least time and lowest cost possible.

 

Avoiding bidding problems

The bid bears the main goal of establishing project construction prices. Deficiencies in bid package documents can lead to order changes, which can cause financial risks to the project owner and the architect (Gibson, et al. 1996). Change order pricing is usually on the higher side compared to bid pricing because of the small amount of the materials involved and work related inconveniences. An excessive number of change orders will escalate the construction cost and can lead to situations whereby the project owner sues the concerned design team for omissions and errors. To avoid this, the architect must be very careful while preparing bid documents. A thorough check of the documents including construction drawings should be undertaken to ensure that all the potential errors are rectified before they are presented for biding.

 

As a best practice in the construction industry, contractors only bid on what the drawings and written specifications indicate as shown on the bid package. Incomplete or inaccurate drawings result in many questions from bidders or demands for inclusion of contingencies to protect the bidders. Moreover, contractors do not carry out cross-checking during bidding period as they assume this to have been done by design team. Attempts to detect gaffes or mistakes in the bid documents are also impeded by the time allocation for biding.

 

In order to avoid the above hitches, it is advisable to delay bidding dates when construction documents are insufficient to allow for necessary corrections. An addendum as a supplementary to the initial bid package can also be prepared to provide the missing information on the initial package. Substitute bid packages can also be used in cases of similar projects but their usage should be limited. To avoid order changes resulting from construction costs, design team should prepare accurate cost estimates during bid package preparation phase. The following techniques can be applied to control costs:

 

Detailed programming: Project owners should supply the design team with a detailed program of the project to aid in preparing cost effective schematic designs that are acceptable by the owner.

 

Detailed project costs: Project costs presented in the bid package should be as detailed as possible and constantly updated during the bid preparation phase to ensure that they give accurate information of the market costs.

 

Pre-construction consultancy services from contractors: Such services can be beneficial both to the project owner and the architect during the preparation of bid package. As noted by Gibson, et al. (1996) contractors can offer advice on project constructability, document reviews for coordination and completeness, detailed cost estimating and value analysis suggestions.  It is however prudent for the design team to come up with their cost estimates and compare with the contractor’s cost estimates and arrive at more detailed cost estimates.

 

Conclusion

Construction bid package is an important process in every construction project. In preparing the package, the design team should focus on quality and cost effectiveness, since it is the package that determines the final cost of the project. It is therefore mandatory that the package is prepared in a way that limits errors on the documents, makes it attractive to bidders and attracts the minimum cost from contractors, those who place their bid should in-turn follow best practices and offer competitive bids.

 

Bibliography

Construction Industry Institute (CII) (1986): Constructability: A Primer: Publication 3-1, CII, Austin, Texas.

Damkin, J.A and American Institute of Architects (2008): The Architects Handbook of Professional Practice. John Wiley and sons, New Jersey

Gibson, G.; McGinnis, C; Flanigan, W & Wood, J (1996): Constructability in the Public Sector, Journal of Construction Engineering and Management ASCE, 122 (3): 274-280.

Institute of Management and Administration (2006): Cost Reduction and Control Best Practices. John Wiley and Sons, New Jersey.

 

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