School of Civil Engineering

Division of Construction Engineering and Management

CE 222/CEM 201
Life-Cycle Engineering and Management of
Constructed Facilities
Lecture 3
Bidding & Preparing Bid Package

CE 49700-025/CEM 201 Life-cycle

Engineering and Management

Project Development Cycle

Bidding & Preparing Bid Package

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 It is the 1st step in any project life cycle

Differs based on the type of entity
Individual
Companies
Institutes
Profitable organizations

Triggered by:
Personal preference
Profit
Improvement of quality of service

Bidding & Preparing Bid Package

CE 49700-025/CEM 201 Life-cycle

Engineering and Management

Establishing Need

Completed by Feasibility analysis

 2nd step in project life cycle

CE 49700-025/CEM 201 Life-cycle

Engineering and Management

Conceptual Design

Bidding & Preparing Bid Package

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CE 49700-025/CEM 201 Life-cycle

Engineering and Management

Conceptual Design (Contd)

Bidding & Preparing Bid Package

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 Inputs:
Need & Conceptual design

Outcomes:

CE 49700-025/CEM 201 Life-cycle

Engineering and Management

Preliminary & Detailed Design

Set of drawings and specifications

1. Preliminary (40% completion)
Allows the owner to review his needs and financial status.
Outputs:
Drawings (40% completed)
Specifications (40% completed)
Preliminary estimate

Bidding & Preparing Bid Package

2 stages

2. Detailed Design
Outputs:

Purpose:
To ensure that the design produced is within owners financial
resources
To establish a reference point in evaluating bids

Bidding & Preparing Bid Package

Full set of integrated Drawings

Full set of Specifications
Detailed estimate ( 3% accuracy) including
Direct Cost
Indirect Cost

CE 49700-025/CEM 201 Life-cycle

Engineering and Management

Preliminary & Detailed Design (continued)

 Design team
Includes a team leader and members from the different
disciplines

Extensive coordination is required

Foundations loads
Floor plans and finishing nature dictate pipes & outlets
orientation.

Bidding & Preparing Bid Package

What are the different involved disciplines?

CE 49700-025/CEM 201 Life-cycle

Engineering and Management

Preliminary & Detailed Design (continued)

 What?
A document announcing to prospective bidder that design
documents are available for consideration and that the
owner is ready to receive bids

CE 49700-025/CEM 201 Life-cycle

Engineering and Management

Notice to bidders

Why?

How?
Locally:
Advertisements (public projects)
Letter (known contractors)
Builders exchange news letter

Bidding & Preparing Bid Package

To ensure that the work will be performed at the lowest

cost and in the quality required

Internationally:
Web based systems like Dodge report systems.
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 What does it include?

Size of project
Availability of plans and specifications
Project duration
Place and date of bid opening

Bidding & Preparing Bid Package

CE 49700-025/CEM 201 Life-cycle

Engineering and Management

Notice to bidders (Contd)

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CE 49700-025/CEM 201 Life-cycle

Engineering and Management

Notice to bidders (Contd)

Bidding & Preparing Bid Package

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 What?
A set of documents defining project scope and details
and on which a contractor must base his decision to
bid or not to bid.

Proposal form
General conditions
Special conditions
Drawings
Specifications

Bidding & Preparing Bid Package

Includes:

CE 49700-025/CEM 201 Life-cycle

Engineering and Management

Bid package

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 Proposal form

Bidding & Preparing Bid Package

When filled and submitted by a contractor illustrates

his/ her intent and commitment to perform the work as
per the specifications and drawings in the desired time
and budget filled out
It is not a formal contract

CE 49700-025/CEM 201 Life-cycle

Engineering and Management

Bid package

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CE 49700-025/CEM 201 Life-cycle

Engineering and Management

Bid package

Bidding & Preparing Bid Package

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 General conditions
Certain specifications regulating how a contract is to be
administered and the relation ship between involved
parties
Generally address aspects common in all projects

CE 49700-025/CEM 201 Life-cycle

Engineering and Management

Bid package

Bidding & Preparing Bid Package

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 Supplementary conditions
Covers aspects of the contractual relation that are
peculiar to a specific project

Items included are of two types

Modifications of the articles of the general conditions
Additional articles that are legally binding

Bidding & Preparing Bid Package

Duration of the project

Owners procured materials
Specific payment days

CE 49700-025/CEM 201 Life-cycle

Engineering and Management

Bid package

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CE 49700-025/CEM 201 Life-cycle

Engineering and Management

Bid package

Bidding & Preparing Bid Package

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 Specifications
Verbal description of the technical requirements and
aspects of the work to be performed.

CE 49700-025/CEM 201 Life-cycle

Engineering and Management

Bid package

Addenda
Bidding & Preparing Bid Package

A document illustrating any changes, additions,

omissions, corrections, and contract conditions that
arise before bidding is finalized.
It becomes part of the contract documents.
It is a binding document.

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 A contractor must base his decision to bid on:

Site inspection
Analysis of contract documents
Quantity takeoff (Quantity Surveying)
Costs of bid preparation are only recoverable if bid is
won.
Approximately 0.25% of total bid value

Bid value includes

Direct cost
Indirect cost
Markup

Bidding & Preparing Bid Package

Why?

CE 49700-025/CEM 201 Life-cycle

Engineering and Management

Decision to bid

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 Prequalification:
A statement submitted by a contractor illustrating his
potentials for performing the current project
Includes:

why:?
Provides a supporting documents to help the owner decide on
the best contractor to perform the works.

Subcontractors and vendors costs:

How does a general contractor incorporate these
costs?

Bidding & Preparing Bid Package

Company portfolio
Company Curriculum Vita
Satisfactory performance letters of other projects

CE 49700-025/CEM 201 Life-cycle

Engineering and Management

Bid submission

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 Assurances provided by a third party (Surety

Company)
#

Bid

Performance

Payment

To whom

Owner

Owner

Owner

By whom

Why?

Value

Cont.

Protects the owner in

case the awarded
contractor did not sign a
contract

1. The
difference
between
current bid
and the next
lowest bid
2. Specified
value

Cont.

Protects the owner

against the contractors
lack of performance

Varies from one

contract to other

Cont.

Protects the owner

against any liens or
unpaid amounts by the
contractor

Varies from one

contract to other

Bidding & Preparing Bid Package

Type

CE 49700-025/CEM 201 Life-cycle

Engineering and Management

Bonds

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 Bonds are issued for a service fee

For contract sums of $ 200,000
1 % of contract value or $10 for each $ 1,000

For contract sums of > $ 200,000

Bidding & Preparing Bid Package

Rate varies according to contractors history of performance

Usually rates are between 0.5% to 3% of contract total value

CE 49700-025/CEM 201 Life-cycle

Engineering and Management

Costs & requirements for bonds

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 Establishes the level of bond for federally funded

projects
Performance bond = 100% of contract total value
Payment bond

Bidding & Preparing Bid Package

50% if contract value is $1,000,000

40% if contract value is >$1,000,000 and $5,000,000
Fixed amount of $2,500,00 if contract value is >$5,000,000

CE 49700-025/CEM 201 Life-cycle

Engineering and Management

Millers Act

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