By completing the activities in this chapter, you will gain an understanding

oftheeldactivitiesinvolvedinbiddingandcontractnegotiation.

The following information is taken from the NCARB IDP Guidelines:

Minimum Bidding and Contract Negotiation Experience: 120 Hours

Denition:Involvestheestablishmentandadministrationofthebidding

process, issuance of addenda, evaluation of proposed substitutions, review

ofbidderqualications,analysisofbids,andselectionofthecontractor(s).

• Construction procurement (e.g., bidding, negotiating)

• Contracts (e.g., professional services and construction)

• Interpreting construction documents

• Oral and written communications

• Product and material substitutions

• Project delivery methods

The architect’s duties in contractor selection may appear relatively minor in comparison to the architect’s

role in design and construction. However, the architect’s role in contractor selection is pivotal in terms

of establishing sound working relationships, limiting liability to the owner and the architect, and treating

An increasingly complex design and construction environment necessitates consideration of modes of

project delivery that differ from the traditional design-bid-build approach. Certainly, the recent advances

in integrated project delivery provide powerful new alternatives to the traditional construction process.

No matter what project delivery approach is used, however, contractor selection criteria and procedures

needs to be informed of the implications of straying from the rules. Attention to detail and the importance of

into a three-dimensional physical reality. Ultimately, it is the quality of the contractor(s) and the quality of

the working relationships among the owner, contractor, architect, and their subcontractors and consultants

that will determine just how successful a project will be. Thus, the means used to select a contractor is a

critical issue that needs to be addressed as early as possible with the client. The selection process lays

the groundwork for the realization of the project and the relationships among the parties involved in the

construction process.

bid-build works well for a wide variety of projects of all sizes and is still widely used in the construction

industry. In this project delivery method, the owner establishes one contract with the architect for design

services and another with a builder (or perhaps several separate contractors each with prime contracts

with the owner) for construction. The architect’s role during construction is limited to administration of the

construction contract between owner and builder. Having developed a set of contract documents that

establish a scope of construction work, the architect releases them to competing contractors who propose a

price for completing the work. In most cases, the job is awarded to the lowest responsible bidder.

The bulk of this chapter details how the bidding process works in the context of traditional design-bid-build.

Special attention is given to procedural issues and limiting liability. The remaining portion of the chapter

construction management. In contemporary design and construction, such

approaches are often worth considering for economic, schedule, technical

complexity, and project coordination reasons and thus are increasingly

common. However, such project delivery methods have very different

implications for project coordination and liability, and for the architect’s

roles and responsibilities, than does the design-bid-build approach.

The following discussion of competitively bid contracts outlines many of the

issues generally associated with contractor selection and project delivery,

no matter what delivery method is employed. Following it is a detailed

description of bidding procedures, followed by a review of practical and

or selective, qualifying contractors, and preparing and issuing the bid

package.

The architect and the owner decide whether they will get better results

for a project by choosing from a large or a small pool of bidders. Their

decision determines whether the bidding process is open or selective.

When attracting a large number of bidders is considered desirable,

as is often the case in public sector work, open bidding is used. An

“advertisement to bid” is published in trade or government publications

or professional journals, inviting any interested contractors to participate.

Architect Regarding the Construction Contract. The information in this document is intended to provide

information to the architect that will clarify the owner’s requirements and preferences. Once bidders have

beenidentied,apackageofinformationconcerningtheproposedprojectisissued.Thepackageincludes

the following:

• Invitation or advertisement to bid

• Drawingsandspecications

• Notice to Bidders

• Instructions to Bidders

• Proposed contract documents

• Bid security details (if required)

designating certain alternatives to be decided by the owner at a later time.

Thisneedforexibilitycanbeaccommodatedintwoways:

the contract if they are selected, the owner may require some form of security, which should be submitted

alongwiththereturnedbidform.Thesecuritymighttaketheformofcash,acertiedcheck,orabidbond

(AIA Document A310™, Bid Bond).

The bid security could be expressed either in a lump sum or as a percentage of the base bid. Bidders

usually prefer the former, as it does not reveal their bid before opening. This amount is usually not less than

may forfeit all or part of the security. The penalty amount is usually determined as the difference between

the selected bid and the next lowest bidder, although the penalty cannot exceed the amount of the security.

canceling or postponing the request for bids.

Bidsmustbereceivedinwriting,containedinsealed,opaqueenvelopespriortothetimeanddatespecied

intheadvertisement/invitationtobid.Oralbidsarenotacceptable,andanybidsreceivedafterthespecied

time should be returned unopened.

are opened in private, the bidding information may be sent to all bidders

at the owner’s discretion. The owner need not accept any of the bids if

they appear too high and may reject any bid not in conformance with the

stated requirements. However, the bidding documents do provide that if a

contractor is chosen, it will be on the basis of the lowest responsible bid. A

decision is usually made within 10 days of the bid opening.

In publicly bid work, the owner is often constrained by law to accept the

lowest responsible bidder and thus may be held liable if the selection does

not conform to that requirement (i.e., the lowest monetary bid, coupled with

the owner’s satisfaction that the contractor can successfully undertake the

substantial error in the bid calculation, in which case withdrawal might

When a contractor has been selected (usually within 10 days of bid

the work force, and bonds in accordance with the owner’s requirements as expressed in the instructions to

bidders.

When these and any other preliminary matters have been dealt with and the contracts prepared, the owner

and contractor are ready to enter into the contractual agreement.

As soon as practical after the owner-contractor agreement has been signed, the contractor should submit

project without the knowledge and approval of the architect and the owner.

to use a standard form of subcontractor agreement. AIA Document A401™, Contractor-Subcontractor

Agreement Form, can be used in conjunction with other AIA documents.

Subcontractors may, in turn, engage other contractors, termed sub-subcontractors to work on a project. The

relationship between these parties is similar to the relationship between the contractor and subcontractor,

although the prime contractor still has overall responsibility to the owner for the project.

What practical and legal issues are associated with bidding? On the whole, comparatively few legal cases

provide guidance about an architect’s liability originating from errors in bidding. Despite this relative dearth

of legal authority, architects can take at least some steps to protect themselves from claims by clients,

contractors, or subcontractors and to protect the owner’s interests during the construction phase.

Court cases involving contractors’ claims based on misinterpretation or inadequate documentation highlight

some of the problems an architect may cause or otherwise encounter. Hazy documentation, for example,

may induce bidders to build substantial contingencies into their base bids. This could leave an architect

AIA Contract Documents provide a detailed, generally accepted procedure for contractor selection with

which all entrants should become familiar.

Download sample copies of the following AIA Contract Documents associated with the bidding process and

review them for consistency with the concepts presented in the narrative.

• A305™,Contractor’sQualicationStatement

• A310™, Bid Bond

negotiation procedures as detailed in the documents and described in the narrative?

outcomeofthebiddingprocessintermsofminimizingyourrm’sliabilityortheoverallsuccessof

the project?

WiththehelpoftheprojectmanagerinyourrmoranIDPmentor,ndasetofdrawingsthatwereissued

forbid,completedbidforms,andanyaddendathatwereissuedinyourrm’sarchives.Donotreviewthe

ShareyourworkwithyourIDPsupervisorormentorandmakesuggestedchanges.Documentthenal

version as a PDF.

Priortocontractorselection,potentialbiddersmayattendapre-bidconferencetoaskspecicquestions

about the project. Their perspectives are useful in gauging their concern about the procedures that will

togettheirquestionsclaried?

After all of the proceedings have been put into place and the bidding contractors have proposed their bids,

the bid opening brings the process to an abrupt, and hopefully productive, conclusion. Obviously, stakes can

Attendapublicbidopeninginyourareaandtakenotesontheproceedings.Besuretoarrive30to60

minutesearlysoyouseetheprocessfromstarttonish.

and any obvious reasons for their comments. Also include aspects of the bid opening that were handled

version as a PDF.

Every project will exhibit its own characteristics and challenges and it is important to become familiar with as

many examples as you can.

For this activity, gather information about completed building projects or projects in progress from several

supervisorsandprojectmanagersatyourrmoryourmentor’srm.Chooseatleastthreeprojects

(preferably using three different project delivery methods, if possible).

size, complexity, and client experience.

rethinking?

Inthisscenario,youareworkingwithaprivatefoundationtodesignofcesforitsnationalheadquarters.The

board of directors agrees in principle with your vision of an environmentally sustainable building, although

is better to send the project out for bid with the sustainability design concepts fully intact and to deal with the

inevitable compromises and value engineering later. The bids arrive and they are, to your client’s dismay,

much higher than anticipated. In a letter, the board expresses profound disappointment in your leadership

and professional advice. The letter contains the veiled threat of a lawsuit. You learned in school that a

seemstohavebackred.

In a letter to your client, communicate what you can do to salvage the project and your relationship with

In this scenario, three weeks after the public bid opening for a public parking garage project, Rebar

Constructioninformsyouandyourclientthatitsbidcontainsanerrorsignicantenoughtoraisetheprice

that Rebar has obtained another, more lucrative contract, and that it is concocting the error to get out of the

parking garage job. Rebar insists that it made an honest mistake and cannot be held to the bid.

In this scenario, your practice was retained to design a new elementary school for the local school board. A

budget of $7,000,000 was set at the outset of the project, and you followed through with a comprehensive

Twodaysago,youattendedthebidopeningattheschoolboard’sofces.Youanalyzethebidresultsin

Exhibit 3A-1 and prepare a report for your client.

In the meantime, however, you have received a letter from the chairman of the school board (see Exhibit

In this scenario, your client, Green Valley Center for the Performing Arts, has been planning a new facility

for nearly ten years. The budget has always been tight, and the scope of the building program ambitious. It

to make this the premier performing arts institution in the region. Unfortunately, about 24 months ago

fundraising began to lag because of a slow regional economy, and you had to place the project on the shelf.

But now Green Valley is back—they have achieved their fundraising goals and are ready to put the project

out to bid. You are impressed by their perseverance, but you have to tell them that the local construction

During the bidding process there are procedures that must be adhered to strictly. These procedures are

often very clear and somewhat scripted for public works.