020: The Construction Bid Process

Every client wants to know what their project is going to cost and who’s going to build it. That means sending the drawings out and getting contractors involved … Let’s get ready to rumble because “The Construction Bid Process ” is today’s topic. [Note: If you are reading this via email, you will have to click here to access the on-site audio player]  For those of you who might not know, a construction bid is the process in which the contractor takes the drawings and specifications as prepared by the architect and their consultants, reviews them for materials, quantities, and submits a price in which to undertake the scope of work as defined in those construction documents. This should all sound pretty normal because this is what happens for any professional scope of service. I tell you what I want, you tell me what it’s going to take to give it to me, and I either agree or disagree to pay this price. In the construction world, it basically works the exact same way but there are some nuances and subtleties to discuss. Let’s get into it and let’s start by discussing how projects are bid. I am going to start by stating that there is a difference between how public and private projects are bid but the basics are the same but there is a lot less formality and procedures for residential projects. The bid process has several steps that are typically standard no matter what “delivery method” you are utilizing for your project. (We will get to those "delivery methods" in a future episode). So the basics of the bid process are as follows: Step 1: Construction Docs Completed The Architect and their team have completed a full set of construction documents that should include all of the important information required for contractors to provide a price to build the project. Step 2: Advertise the Project (at large or to invited bidders) During this period, the construction documents are provided to contractors and tradesmen to review, question, and price. This process can be handled in several ways depending (once again) on the delivery method. These days the majority of this process occurs electronically, though some forms of paper distribution still take place. The future for this step will be completely electronic at some point and may not even involve drawings. Step 3: Bidding Q&A Period During this step a set period of time is established, typically 3-4 weeks, that the documents are reviewed and such by anyone who hopes to provide a price to construct the work. This is directly tied to Step Two. The contractors can ask for clarifications or product substitutions or additional information within this set number of days. Also during this period it is the architect’s job to continue to distribute information to all those contractors who are bidding the work. This is always a set period of time, that once it ends, the pricing is due… the bid. Step 4: Reception of Bids So this is the step, usually an exact day and time, when everyone is required to provide their bid. Many times this is a frantic race to the end with bids coming in at the very last minute. The general contractor or construction manager assemble all of the trade bids they receive into a single number that is considered the price to build the project. Step 5: Evaluation and Selection This step involves reviewing all the bids and requirements of the bid documents by the owner, architect and other involved stakeholders if any. The goal here is typically to identify the best value for the project; this is not always the lowest bid. This review process is also ensures that the bidders meet all the requirements put forth in the request. It can also give time to get some clarifications on the bid number from the contractors. This part of the process varies again based on delivery method and the number of stakeholders in the project. Step 6: Contract Negotiations & Start This is the last one. At this point, bids have been evaluated and the contractor that is going t...