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Tendering & Awarding DB Projects
N/A
5
Management
Undergraduate 1
04/20/2015

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Term
What should a Contractor look for in the contents of RFQ/RFP?
Definition

Selected respondents (from RFQ stage) are asked to submit RFP or are approached by owner to negotiate a contract
'

One of the important step(by contractor, before the response) is to analyze the RFPs RFQs and make a business decision to respond or not.
CCDC has published the guidelines to analyze and respond to RFPs (and RFQs)


Intent of the owner is to shortlist up to 5 qualified bidders who can participate in RFP process


Before responding to RFQ (and hence to RFP), one must understand the nature of project, and the chances of winning the project


In case, the respondent is asked to submit the RFP, design-bidder should seriously consider the chances of success, as design build proposal need much more efforts the a DBB bid

Term
What should you be aware of before responding to RFQ from bidders perspective?
Definition

Scope

  • Ensure that project falls under the expertize of the organization
  • There is enough capacity to perform the work in terms of technical knowhow and resources
  • Owner's expectations around scope, quality and deliverables are clear
  • Some owner's require high standards of delivery (e.g. expedited schedule or high workmanship etc.), ensure that Organization is capable to deliver to those standards.

Owner's finances

  • In case of design-build project, Bidder bears higher financial risk. Ensure that due diligence has been performed to verify the financial capacity of the owner

Communications

  • Line of communications with the owner should be clear. Communication should be properly documented and recorded

Owner's consultants

  • DB project, Owner typically engage consultant
  • Important to clarify the roles and responsibilities of the consultant for smooth working relationships

Loncation factors

  • Bylaws and planning regulations
  • Applicable building codes
  • Any applicable environmental and wildlife regulations, seasonal bans etc.
  • Licenses (for company and consultants)
  • Site conditions, accessibility etc.
  • OHS and WCB regulations
  • Availability of materials and labour
  • Local labour market conditions

Evalustion Criteria

  • Is a very important element of RFQ invitation
  • Bidder should have clear understanding of this criteria
  • Criteria is generally accompanied with weighting scale, if the is missing then the owner can be very subjective in his/her selection
  • Selected respondents are asked to submit RFP or are approached by owner to negotiate a contract
Term
What key information should be provided to Contractors for RFP?
Definition
  1. Proposcal documents
    1. Honorarium: If honorarium will be paid to the Bidders submitting the compliant proposal, and how much
    2. How to obtain and submit the documents
    3. List of Proposal documents: Provide a list of proposal documents which will supplied to the Bidders
    4. Purpose and use of proposal documents
  2. Qualification
    1. Bidder's Qualifications: Written evidence of rquired qualifications and experience
    2. Consultant and Major sub-contractors: Qualification of individuals or entities providing PM, design and professional consulting services and execuing major sub-trades
  3. Examination of RFP Documents and Site
    1. Bidder's responsibility: Examine RFP docs, site visit, applicable laws and regulations which may impact the work etc.
    2. Owner Provided Information: Disclaimer about accuracy of information, interpretation of the technical datat and reports (provided by Owner) etc
    3. Site Conditions: Responsibility of Bidder to examine and validate site conditions
    4. Access to site: Procedure and conditions regarding access to site
  4. Possession of Site
    1. Information regarding right of ways, easements, access for temporary construction facilities, storage of materials etc.
  5. Omissins, Interpretations and Addenda
    1. Communication channels, timeline around communications, interpretation of communications etc.
  6. Bid Security
    1. Submittal and return of proposal security for successful and unsuccessful bidders
  7. Contract Times
    1. Milestone schedule and final payments
  8. Pre-proposal Meeting
    1. Date, time and location of the meeting, circulation of the meeting minutes and protocol regarding questions and clarification arising from the meeting
  9. Technical Exhibits
  10. Proposal Form
  11. Submission of Proposals
    1. Time and date of proposal submission along with the format
Term
What are the success factors of award of DB project?
Definition
  1. DB Team
    • Bidder needs to pick a team which is well suited for the project
    • Team member's roles and responsibilities should be clearly defined
    • Ensure that single person is responsible to identify legal requirements associated with codes, regulations and permissions. A last minute identification of such requirement has jeopardized the project successful outcome
    • Ensure that all the overhead costs are assessed and accounted for in the estimate
  2. Value Engineering
    • Value engineering is useful tool to generate the alternatives which provide the best value solution
    • Efforts and resource on the good Value engineering exercise will pay in the long term
  3. QA/QC
    • Ensure that QA/QC plans are prepared and implemented starting from the RFQ phase
    • Deliverables at each stage should be reviewed for quality
  4. Design Development
    • Design is developed in two stages: Pre-RFP stage and, post RFP stage (after award)
    • It is very important to work with the design consultant to reach an argreement on the appropriate level of details (in response to RFP) and associated cost
  5. Construction documentation
    • Construction documentation should be detailed enough to describe the work in detail. Owner should be comfortable enough to use them as sign-off documents
  6. Financing
    • Members of DB teams will have different cash flow requirements. These requirements must be identified and addressed in cash flow management plan.
    • Owner should be presented with the summary of cash flow on the project. This will ensure that owner arrange the resources to meet the cash flow plan.
    • Financing should be carefully considered to consider the cost to carry the DB team members throughout the project and the contingencies. It is not unusual to get paid till 90 days from invoicing date
    • Team should be aware of provincial and federal construction lien acts (which may hold up 10%-15% of value of completed work for 45 to 60 days)
    • Finance should be secured (whether internal or external) and the terms and conditions should be agreed upon between the team members before submitting the response to RFP
  7. Incentive sharing
    • Ensure that owner is aware of the changes which may lead to incentives in the project. This will ensure that the design-signoff proceed smoothly withour any disputes
    • Economy in one trade can generate excessive work in other trades. This can lead to disputes depending upon the contractual arrangement with the other sub-contractors (especially if subs are party to DB agreement)
    • Engineers have factor of safety built in the design. While aiming for such economies, designer has to ensure that such factors are not slimmed down to a level which may result in safety issues in the long term
  8. Reporting
    • all team members should have clear understanding of reporting requirements and the expectations from them
    • This should include the requirements from owner side as well
  9. DB Team Structure
    • In most traditional DB projects, design-builder take the lead role while other team members act as consultants of sub-contractors
    • These relationships should be formalized before RFP submission
    • If project is bid and complex, joint venture company may be formed withing the DB team members. This ensures that every member shre the risks. The degree of risk sharing will depend upon the TOCs of the JV agreement
Term
What are the success factors of award of DB project continued?
Definition
  1. Confidentiality
    • It is quite possible that some of the consultants/sub-contractors may offer services to more that on DB Bidder
    • Hence it is very important to safeguard the sensitive and privileged business information (such as estimates, profits, design solutions etc.) by means of some non-disclosure agreements
  2. Dispute Management
    • All team members should agree on the some kind of dispute management framework
    • Generally most of the contracts calls for Alternative dispute Resolution steps before litigation
  3. Insurance and Bonding
    • Owner may carry some kind of insures. Ensure that the project is adequately covered under the Owner's insurance, Bidder's insurance, sub-contractor and consultants insurance
    • Reach an agreement on the insurance deductibles, and who will cover them (for disaster etc.)
    • Professional liability coverage is based on 'Claim made basis'. So it has to be carried out after project has finished (most possibly into warranty period).
    • Responsibility of deductibles should be agreed upon within the DB team (Generally it's design-builder)
  4. Desing Sign-Off
    • No professional indemnity insurance provides guarantee for a design to meet owner's satisfaction
    • Utmost importance to put in place the process and procedure for design-signoff by the owner
    • By this procedure Owner and design-builder mutually accept that construction documents prepared by design-builder meet the general intent of the owner's statemet of requirement
  5. Owner's Statement of Rquirements
    • Owner's statement of rquirements provide the basis of understanding (to the bidder) regarding the character, scale and scope of the project
    • Bidder must be very clear about understanding these requirements
    • These requirements can provide the general description or can be very detailed in nature
    • When interpreting these requirements, ensure that they are clearly expressed and reasonably implied
    • Making unsafe assumptions at this juncture of time can skew the outcomes of the project
    • Bidders should have a plan in place to clarify the assumption and ambiguities. Clarifications should be seeked
 
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