PROSPECTIVE BIDDERS AND BIDDING:

The selection of the contractor is important because the successful completion of

the project is highly dependent upon the contractor. The owner and/or designer must
depend upon the contractor to provide labor, equipment, material, and know-how to
build the project in accordance with the plans and specifications. If the
contractor has problems, everyone has problems.
The owner generally requires prospective contractors to provide a bid bond before a
bid is accepted. Before award of a contract, most owners require the contractor to
submit a material and labor payment bond, and a performance bond. All bonds are
supplied to the owner from the contractor before commencing construction in the
field. Although bonds provide some degree of protection to the owner, they do not
guarantee that construction will proceed in a smooth operation. In addition to bond
requirements, prospective bidders should be screened by a prequalification process
that evaluates their record of experience, financial capability, safety record, and
general character and reputation in the industry.
Generally, a higher number of bidders will generate more competition, resulting in
lower bids. However, the quality of the bidders is more important than the quantity
of bidders. For private projects it is possible to control which companies are
allowed to submit a bid.
Careful consideration should be given to the length of time that is allowed for
contractors to submit bids. The proposed due date should be adequate for bidders to
prepare a thorough bid. If there is uncertainty regarding what length of time would
be adequate, a reputable contractor can be consulted to assist in developing a
reasonable time for preparation of bids. If the time is too short, some bidders may
decline, or worse the bid may not be properly prepared. If the bid time is too
long, there is an unnecessary delay in construction.
A pre-bid conference should be held to clarify any unique aspects of a project and
assist the bidders in their preparation of a good bid. This is an opportune time to
clarify scope, explain special working conditions, and answer questions of
contractors. Any item that is clarified at the meeting, that is not in the bid
documents, should be confirmed in writing to all parties.
For any project, the party that will administer the contract should prepare a
detailed cost estimate from the same set of bid documents that the contractors are
using to bid the project. This will assist in the evaluation of contractors' bids
because the process of preparing an estimate requires a close scrutiny of all
aspects of the project. Many problems associated with a project can be detected by
thoroughly reviewing the bid documents and going through the process of preparing a
detailed cost estimate. There are numerous professional estimating companies that
can perform this service if the capability does not exist in the party's
organization that will administer the contract.