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PROCEDURES FOR SELECTING THE CONTRACTOR

PROCEDURES FOR SELECTING THE CONTRACTOR. SELECTION PROCEDURES AND QUALIFICATIONS. The owner, typically assisted by the designer, formulates a procedure to attract and evaluate interested contractors.

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PROCEDURES FOR SELECTING THE CONTRACTOR

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  1. PROCEDURES FOR SELECTING THE CONTRACTOR

  2. SELECTION PROCEDURES AND QUALIFICATIONS • The owner, typically assisted by the designer, formulates a procedure to attract and evaluate interested contractors. • This procedure may be informal or highly structured, depending on the size and complexity of the project and owner’s organization. • Private sector owners may award contracts on the basis of prices offered informally (even orally). • Most public agencies are required by law to use competitive bidding.

  3. SELECTION PROCEDURES AND QUALIFICATIONS (cont.) • The first step in the selection procedure is to invite contractors to submit information about their qualifications in the form of a statement of qualifications (SOQ). Invitation can be public notice or private invitation. • In general, competitive bidding for public projects requires the following qualifications of contractors submitting bids: • Valid state and local license(s) to perform the work. • Proof of financial capability to enter into contract, as evidenced by the ability to supply bid and performance bonds.

  4. The following is a general checklist of pre-qualification information that may be requested by the owner: Constructor name, location, license, and corporate structure Business data: financial information, bonding capacity, bank references Construction experience: projects constructed or under construction, size, type, performance on schedule, and budget Work force on contractor payroll vs. subcontracting SELECTION PROCEDURES AND QUALIFICATIONS (cont.)

  5. Pre-qualification information checklist (cont.) • Equipment owned vs. rentals • Safety records: written program, actual experience • Quality control: written program • Resumes of key executive and supervisory staff • Current work load: remaining bonding capacity • Personnel to be assigned to key positions of management and field supervision • Performance of completed project references • Record of litigation

  6. SELECTION PROCEDURES AND QUALIFICATIONS (cont.) • AGC has prepared a preprinted form, “Construction Contractor’s Qualification Statement for Engineered Construction” (AGC Doc. 220), for use as a suggested generic pre-qualification statement or a contract-specific qualification statement. • In examining and evaluating the information submitted, the owner may make independent checks on the contractor’s credit standing, visit projects completed, interview owners and operators, investigate safety records, and review other indicators of performance capability.

  7. CONTRACTOR QUALIFICATIONS • Private owners may choose the contractor that they consider the best qualified. The owner may use the qualification information to develop a “short list” of pre-qualified contractors who are asked to: • Bid competitively for the work on a unit-price or lump sum basis. • Present priced proposals for negotiation of a contract on mutually acceptable terms. • Public owners may use the qualification information to select a short list bidders.

  8. SELECTION BY COMPETITIVE BIDDING • Two ingredients for true price competition bidding are: • Clear, concise set of construction plans, specifications, other proposed contract documents (Specify the product to be delivered) • Defined procedure for the bidding award process (Provide a systematic approach) • The bidding procedure protects both the owner and the bidders by providing a systematic approach to bidding and awarding the contract.

  9. Role of Designer • Designer’s degree of involvement in the bidding process depends on the agreement for professional services with the owner. In a typical arrangement, the designer: • Prepares drawings, specifications, bidding documents, and estimates of probable costs for the review and approval of the owner. • Assists the owner in obtaining bids or priced proposals for each contract to be awarded. • Assists the owner in evaluating bids or proposals and in awarding contracts.

  10. Competitive Bidding for Public Works • Competitive bidding is usually mandated by law or agency regulations for federal, state and local government projects. • Beyond the general mandate, there are numerous specific rules and criteria that are defined by the set of documents issued to prospective bidders. These documents generally include: • Bidding documents that apply to the bidding process (e.g. invitation to bid, instruction to bidders, information for bidders, and bid forms). • Contract documents specify contractor’s performance (e.g. owner/contractor agreement, performance and payment bonds, the bid or proposal, general conditions, drawings, specifications, supplementary conditions, addenda and change or extra work orders)

  11. Owner’s Bidding Procedures for Public Works • The procedures required to solicit and inform bidders, to receive and analyze bids, and to award contracts under a competitive bidding system include specific actions • prior to the bid opening, • during the bid opening process, • And after bid opening. • These activities are conducted by the owner, assisted by designer, legal counsel and other advisers. See pages 126 – 128 (ASCE Manual)

  12. Competitive Bidding for Private Work • The private sector owner may elect to follow essentially the same procedures in securing competitive bids as has been outlined for the public sector. • The owner may invite a broad spectrum of the construction industry to participate, or may limit participation to select bidders list chosen by pre-qualification. • In either case, the owner and bidders rely on defined bidding and contract documents. (generally prepared by the designer)

  13. SELECTION PROCEDURES FOR COMPETITIVE NEGOTIATED CONTRACTS • Where structured price bidding may not be appropriate, the owner first compares the qualifications submitted by interested contractors then selects the contractor best qualified for the project, according to established criteria, and finally negotiates a contract for project construction with that firm or person. • This approach generally results in some form of reimbursable cost-plus-fee contract, although negotiated lump sum or unit-price arrangements are not precluded.

  14. SELECTION PROCEDURES FOR COMPETITIVE NEGOTIATED CONTRACTS (cont.) • If competition more directly related to construction or design-build services is desired, the owner selects a list of contractors on the basis of qualification analysis. • The owner then solicits proposals from contractors on the list to address certain topics defined by the owner. (similar to the previously covered contractor qualifications) • With this information available, the owner makes an evaluation of the organizational and cost elements of the work and negotiates a contract with the contractor judged to have the best overall proposal.

  15. SELECTION PROCEDURES FOR NONCOMPETITIVE NEGOTIATED CONTRACTS • Situations where the owner may select a specific contractor and negotiate the contract include the following: • The owner may choose the contractor based on his/her performance on work previously done for the owner. • The contractor may have unique qualifications for the work to be accomplished • The contractor is already working at the site • The urgency of the situation requires immediate action • In the case of sole source award of a contract by a public agency, the contractor may have unique characteristics. (e.g. successful relationship with the owner, specialized expertise, immediate availability for handling emergency)

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