Maximizing Competitive Bidding 2009
To maximize the competition and get the most effective use of your budgeted funds, we recommend the following:
- Whatever system of project delivery, make the contractors aware early of your project.
- Consult with the Construction Associations to ensure that your bid closing does not compete with other projects for the available contractors.
- Spend the necessary resources on creating a reasonable budget. Contractors will be put off by budgets that will possibly lead to lengthy over budget negotiations.
- Ensure a wide distribution of bid documents using the physical planrooms, electronic planroom and avoiding non-refundable deposits.
- Clear and accurate drawings and specifications are essential with the use of a limited number of addenda during the bidding. Arduous addendum can dissuade contractors from bidding. As well, complete drawings reduce construction delays and costly change orders.
- Have a fair balance of risk in the front end bidding conditions that allows objective bidding from all contractors.
- Use standard industry documents with a limited use of supplementary conditions. For stipulated sum bidding consider the use of the BC Documents Committee BCDC 2, 2008 Stipulated Sum Biding Documents for Use on Publicly Funded Projects.
- Allow sufficient time for the contractors to prepare bids and limit the bid acceptance period to no more that thirty (30) days. Longer periods of acceptance will only increase the potential for contractor contingencies to cover for potential rising costs. Longer periods will only discourage contractors from bidding.
- Attract contractors to your project by using Bid Depository;
- The transparency of the process and standard contract form requirements are very desirable to the trade contractors and will attract capable and qualified bidders.
- For the general contractors, receiving the bids early avoids the last minute panic which can lead to possible mistakes and, the bonding helps them manage their risk and may extend their own bonding capacity.
- For construction managers, it ensures the contractors that there is transparency, illustrating an owner’s commitment to being fair.
- During the construction phase;
- Be expedient with processing claims and changes to the work (the longer you wait the more the price goes up).
- Consider using the services of a Conflict Resolution Consultant to deal with issues expediently.
- Allow a reasonable mark up for overhead and profit on changes to the work.
- Make progress payments in a timely manner and allow progress payments for changes to the work.
- Be open to suggested material and equipment changes.
- Understand reasonable schedule issues
The owner, contractor and design professional relationship is built on a fair, open and transparent process that facilitates good business relationships. Producing a positive environment for bidding and construction will build a culture of trust that will attract contractors to bid on your projects.