Professional Documents
Culture Documents
INSTRUCTION TO BIDDERS
Location of Work
The Instruction gives the location of the project site. Material and
equipment contract bidders need this information to determine
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shipping costs. If the project site is in a remote location, the Instruction
provides direction on how to get to the site.
Pre-Bid Meeting
Pre-Bid meetings can be held after the RFP’s are issued and prior
to the bid due date. The Instruction may also describe the purpose of
the meeting and how answer to question from bidders will handled.
The answers to the questions from bidders are normally handled in a
formal manner since they are supplement to the information provided
in the RFP.
Pre-Award Surveys
Pre-award surveys are performed by owners to obtain
information on technical and management capabilities. These surveys
are performed after the RFP is issued to the bidders and prior to award.
The survey can require detail presentations from bidders regarding the
technical and management approaches that they will take on contract.
Ethical Standards
Ethical standard often come from corporate procurement
policies. They include such items as restrictions on gifts and
entertainment from suppliers and contractors to owner personnel.
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the types of bonds required and the cost responsibility for providing
the bonds.
Proposal Format
If the RFP requires that bidders prepare detailed proposals
describing how they will accomplish contract work activities, the
instructions define the format required for the proposals. Limits may be
placed on the length of different sections.
List of Bidders
Many RFP’s include a list of the companies in the Instruction
section, this approach has advantage of making the bidders aware that
they are involved in a competitive bidding process.
Letter of Acknowledgment
It is important that procurement groups receive feedback as
early as possible from companies that receive RFP’s regarding their
intent to the bid the work. To obtain this feed back in a timely manner,
the instruction often includes Letter of Acknowledgment.
DESCRIPTION OF WORK
The purpose of the Description of Work in the RFP is to define the
scope of work for a contract. Other section of the RFP for contract
such as the Specification and Drawings and the Description of Work
reference the other RFP section as required.
Engineering Contracts
Engineering contract RFP contains an overview of technical
features of a project. General information such as the location of the
project, existing facilities at the project site, and responsibilities for
licensing and permits is defined.
The division of responsibility between the owner and the engineering
contractor is explained in the description.
Construction Contracts
It provides the location of the work, existing facilities at the
project site, and the responsibility for obtaining permits and licenses
for a project. There is separate section of the RFP that contains
technical specifications and drawings. The contractor’s responsibility
services such as clean up, scaffolding, temporary office buildings,
warehousing, temporary electrical, temporary heat, security and
construction equipment are described in the description. The quality,
schedule, cost, safety, environmental, and other management
programs required to control the construction contract work can be
addressed in the description.
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PROPOSAL
Contains all of the pricing information required from bidders to
allow an owner to evaluate the costs of the bids.
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Revision and Extra Work
If unit prices are feasible for extra work, the proposal specifies
the unit prices required. If extra work will be handled on a
reimbursable basis, the proposal can request cost limits for the
reimbursable cost.
Escalation Formulas
The proposal request the formulas that will be applied to current
labor and material prices to determine escalation cost.
List of Subcontractors
In addition to the names of subcontract firms, bidders should
provide descriptions of the subcontractor work scopes, subcontractor
experience, location of subcontractor offices, and telephone numbers.
Clarification of Bids
Although the intent of the RFP is to define the work scope in a
manner that eliminates the need or clarification and exception, there
may be items that are not clear that should be addressed. Excessive
clarification or exceptions may cause a bid proposal to be rejected.
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Bidder Signature
It contains space for the supplier of the contractor to sign its
complete proposal, includes the date the proposal is signed, the title of
the person signing, and any required identification numbers or license
numbers.
SPECIAL CONDITION
The special conditions section usually does not address the technical
requirements for a project. The procurement group works with the other project
groups to determine the extent that management clauses can be standardize in
the special conditions. In adequate definition of management requirements can
lead to poor management of a contract. Project management has the overall
responsibility for assuring that RFP’s adequately define management
requirements.
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CHAPTER SIXTEEN
OWNER BID PERIOD ACTIVITIES
Activities such as pre-bid meetings and responding to questions from
bidders received during this period increase the assurance that bidders
understand the requirements in the RFP. Activities such as pre-award surveys
and meetings with other owners that have previously contracted with one or more
of the bidders increase the owner’s knowledge of the technical and management
capabilities of the bidders.
PRE-BID MEETINGS
Purpose
The benefit is to provide assurance that all of the bidders clearly
understand the requirements of the RFP. The question asked by the
bidders at the pre-bid meeting provides feedback on the clarity and
comprehensiveness of the RFP. Bidders that ask questions that
indicate that they have carefully studied the requirements of the RFP
usually have the capability to fulfill these requirements. Pre-bid
meetings are more common for service contracts than they are for
engineered materials and equipment contracts.
Attendees
It is important that the persons most knowledgeable is the
technical and management requirements included in the RFP attend
the pre-bid meeting and present the items that relate to their areas of
expertise. There are advantages to an owner in having the person who
will be the Project Manager for the work performed by a supplier or a
contractor attends the pre-bid meeting. If a bidders sends a person
from its sales force to the pre-bid meeting who will not be involved
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with the project after contract award, there is greater probability of
contract performance problem.
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Agenda
One approach is to assume that owner requirements are well
covered in the RFP’s that have been issued to the bidders and allocate
most of the pre-bid meeting time to answering questions from bidders.
Another approach is to have project personnel discuss the important
requirements to assure that they are clearly understood.
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It is includes any requested management information such as
quality programs, schedule programs, organization charts, and
resumes of key personnel. Information on commercial
requirements such as insurance coverage is included in the
summary.
PRE-AWARD SURVEYS
Purpose
The purpose is to obtain information regarding the technical and
management capabilities of the bidder that is in addition to the written
information requested in the RFP.
Attendees
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The project procurement representative attends the meeting
since he or she is responsible for establishing the date and location of
the meeting, issuing the meeting agenda in advance of the meeting
and preparing meeting minutes for the owner. Project management
attends most pre-awarded surveys since they involve major contracts.
Agenda
The agenda clearly states the type of presentations that are
expected for each agenda item and the positions of the individuals in
the bidder’s organization that should make the presentations.
Technical
The presentation addresses the extent to which the suppliers
intend to rely upon existing design to fulfill RFP technical
requirements.
The technical presentation describes the size and experience
level of the supplier’s engineering group. The number of
qualifications of the supplier engineering personnel required to
complete the contract work are defined.
Computer systems and computer assisted drafting equipment
used by the supplier are reviewed on the tour.
Quality
The presentation defines the quality procedures that the supplier
will use to control the quality of the work as well as the training
programs that the supplier has to assure that engineering and
production personnel are aware of quality requirements.
Production
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The tour of the bidder’s facilities includes the production area
and a discussion of the type of equipment use to fabricate the
material or equipment. The production area and a discussion of
the type of equipment used to control the production work for
the contract is defined. The current backlog of work in the
production facility is addressed.
Testing equipment in bidder’s facility is discussed by the
Manager responsible for conducting the testing.
Contract Management
Describe the type of project organization that the bidder will use
to manage the contract work. The types of updated contract
schedules and progress reports that the bidder will provide to the
owner are addressed. Payment schedule and invoicing
requirements for the contract are discussed.
Technical
The engineering procedures that will be used to control the
design of the project, the type and quantity of technical
specifications and drawings, design calculations and computer
systems required, are discussed. Owner requirements for
reviewing and approving specifications and drawings, the
amount of the detailed design and design calculations that will
be turned over to the owner at the competition of the design
work is addressed. Liaison personnel that perform the final
technical review of design changes for the bidder are defined.
The totals engineering staff currently employed by the bidder as
well as current and future objects that require the efforts of this
engineering staff are identified.
Quality Program
The Quality Manager or the Engineering Manager responsible for
design review for the bidder presents the quality program that is
used to assure that the design satisfies the technical and quality
requirements in the RFP.
Final reviews of the design after construction or manufacturing is
complete by the engineering contractor to assure that any
deviations from the original design documents have not
compromised design requirements are defined. This includes any
requirements for as-built drawings submitted by the construction
or the manufacturing groups.
Schedule Program
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The schedule presentation that includes the compatibility of the
bidder’s scheduling system with the project scheduling system.
Schedule Program
Requirements of compatibility
Detail in the construction contractor’s schedule
Type and frequency of schedule reports
Estimated personnel levels, overtime and shift works
Safety Program
The safety procedures that will be used to assure the safety of
the craft workers are identified as well as the type of craft
training programs utilizing these procedures.
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The procurement representative at the pre-award survey is
responsible for preparing the minutes of meeting for the owner.
The owner has the advantages during the bid period of knowing
the specific technical and management requirement that will be
performed by a supplier or a contractor.
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CHAPTER SEVENTEEN
BID PROPOSALS
INITIAL ACTIVITIES
Decision to Bid
The management personnel who will be responsible for
performing the contract work should be involved with the initial
evaluation of the RFP to determine if the bidder has the capability to
meet the requirements.
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TECHNICAL SECTION
The quantity of work affects the labor cost, material cost, and schedule
for completing the contract work. The second concern for bidders with
the detailed specification and drawings is the complexity of the work.
The complexity of the work defined in the technical documents has
direct impact upon the quality, cost, and schedule of work that will be
performed by a bidder.
Performance Specification
It can require a substantial amount of design work by a bidder
prior to submitting a proposal. The technical approach that they select
should represent the best combination of quality, cost and schedule
benefits to an owner in addition to meeting the performance
requirements.
Since the detailed design that a bidder proposes is the basis for
its fixed price bid, the technical section of the proposal defines the
design in as much detail as possible.
The technical section of a proposal can include engineering
procedures, detailed specification, and drawing prepared by the bidder
to properly define the details of the proposed design.
QUALITY SECTION
Engineering Contracts
The proper implementation of these technical requirements is a
primary objective of the quality programs of all the groups on a
project.
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Many engineering contractors have design review groups that
are independent of the groups that prepare the original design
documents. Bidders for engineering contracts describe their proposed
design review programs.
The engineering contractor is responsible for analyzing the
existing deviation and determining is the design integrity is
jeopardized by accepting the work as is.
Construction Contract
Construction inspection procedures often require that hold points
be established in the work performed by craft personnel to perform
inspections at the proper time in a work sequence.
Quality problems identified by a construction contractor with
materials and equipment furnished by others can take a significant
amount of time to resolve with suppliers.
SCHEDULE SELECTION
The start and completion dates in the RFP for the contract work
affect the pricing of the labor and materials required to perform the
work. Bidders use the specified schedule dates in the RFP as the basis
for developing the cost information that support their fixed and unit
price bids.
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bidder’s organization should parallel the structure of an owner’s
organization to the extent that t is feasible.
Safety Requirements
These safety programs must meet federal OSHA requirements as
well as specific owner requirements. A bidder needs to be
knowledgeable of these requirements to properly account for them in
the pricing section of its proposal.
Environmental Requirements
Construction contract involving the handling of hazardous
materials must comply with federal environmental requirements.
COMMERCIAL SECTION
Liability Requirements
RFP clauses that define the liability of a supplier of a contractor
for performance problems can impose a significant financial liability
upon a supplier or a contractor. Bidders should carefully evaluate
liability clauses and state their positions on liability limits in their
proposals.
PRICING SECTION
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Bidders for fixed price, unit price and target price contracts
prepare substantial estimating detail to assure that all specified
activities are covered in their prices and to be able to adequately
control the work after contract award.
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Labor and Material Cost
If the contract work will not be completed before wage increase
occurs, it is necessary to estimate the cost of future wage rate
increases. If there are extensive materials that will be provided by a
supplier or a contractor, a bidder can expend considerable effort in
obtaining prices for these materials.
Equipment Cost
Engineered materials and equipment contract require the
supplier to use specialized equipment to manufacture the item. The
bidder is responsible for determining the types of equipment required
to perform the contract work and the duration for using the equipment.
The costs of this equipment are included in the contract price.
Risk Analysis
There are many factors that can affect the bidder’s cost
estimate, for example;
Underestimates of quantities of work
Underestimates of the complexity
Underestimates of Increase in wage rates
Underestimates of material prices
Underestimates of the amount and types of equipments required
to perform contract work.
Reimbursable Contracts
Reimbursable contracts with incentive fees that are based upon
expending less than a targeted cost figure can require a bidder
develop the targeted cost figure. RFP’s that specify that bidder submit
cost limits for items such as wage rates and travel expenses require
the preparation of these figure by a bidder.
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