Engineering and Construction Law

and Contracts

Ch. 13 Contracts for Engineering and

Construction Services

Engineering and Construction Law and Contracts © 2011 Pearson Higher Education,
Janet K. Yates Upper Saddle River, NJ 07458. • All Rights Reserved.
1
Bid Package

Figure Bid package documents

 CHAPTER THIRTEEN - CONTRACTS FOR
ENGINEERING AND CONSTRUCTION SERVICES

◼ Construction Bid Proposals

◼ Contains the cost estimate
◼ Includes all of the bid forms
◼ Required to bid competitively if government
projects
◼ Owners could require bidders to prequalify
before bidding on a project
 CHAPTER THIRTEEN - CONTRACTS FOR
ENGINEERING AND CONSTRUCTION SERVICES

◼ Instructions to Bidders
◼ Provides procedures to follow in order to bid on a
project
◼ Provides detailed instructions on the requirements
for the bid documents, bid submission, project
information, and information on how to prepare the
bid documents
 CHAPTER THIRTEEN - CONTRACTS FOR
ENGINEERING AND CONSTRUCTION SERVICES

◼ The Bid Submission Process

◼ Owner issues bid documents (usually done by the
owner’s representative)
◼ Contractors prepare their bid documents
◼ The bids are submitted at the location indicated in the
bid instructions (could be a bid depository)
◼ Public or private bid openings

◼ Contractors have to submit noncollusion statement that

they did not work with other contractors during the bid
process
 CHAPTER THIRTEEN - CONTRACTS FOR
ENGINEERING AND CONSTRUCTION SERVICES
◼ Bid Advertisements Include Information on:
◼ The project
◼ Who is building it
◼ The A/E
◼ The date of issue
◼ A description of the work
◼ The basis of the bids (lump sum, unit price, cost plus)
◼ The time of completion
◼ Bid opening information (who, when, where, Public/Private
bid)
◼ Where to locate the bid documents (Examination and
procurement)
◼ Prequalification requirements
◼ Statement on the right to reject any and all bids
◼ References to any government laws and regulations that
pertain to the project
 CHAPTER THIRTEEN - CONTRACTS FOR
ENGINEERING AND CONSTRUCTION SERVICES

◼ Bid Shopping
◼ Occurs when the prime contractor asks the
subcontractors
◼ to lower their bids after a contract has been awarded or
◼ uses different subcontractors than the ones that submitted
bids
◼ Results in additional profit to the prime contractor
◼ Unethical and Illegal

◼ Could be prevented by requiring the prime

contractor to provide a list of the subcontractors
with the bid
 CHAPTER THIRTEEN - CONTRACTS FOR
ENGINEERING AND CONSTRUCTION SERVICES

◼ The Main Components of Construction

Contracts
◼ General Conditions (Appendix H Standard
General Conditions of the Construction
Contract by EJCDC –Engineers Joint Contract
Documents Committee)
◼ Supplementary Conditions (Appendix I Guide to
the Preparation of Supplementary Conditions
by EJCDC)
 CHAPTER THIRTEEN - CONTRACTS FOR
ENGINEERING AND CONSTRUCTION SERVICES

◼ The Main Components of Construction

Contracts
◼ Specifications
◼ How a project is to be built
◼ The materials to be used
◼ The quality of work
◼ Contract drawings (plans)
◼ Architectural, Structural, Mechanical, Electrical,
Plumbing, Fire protection, Landscape, Doors,
Windows, Floors, Sections and details
◼ Critical path method schedules
 CHAPTER THIRTEEN - CONTRACTS FOR
ENGINEERING AND CONSTRUCTION SERVICES
Components of Engineering Contracts (Appendix F
Standard form of Agreement between Owner and
Engineer for Professional Services by EJCDC)
◼ Articles in engineering contracts include:
◼ Services of engineer
◼ Owner’s responsibilities
◼ Schedule for rendering services (commencement and completion)
◼ Invoices and payments
◼ Opinions on cost (design cost, construction cost, total cost)
◼ General considerations (standard of performance, insurance,
suspension and termination, dispute resolution)
 CHAPTER THIRTEEN - CONTRACTS FOR
ENGINEERING AND CONSTRUCTION
SERVICES

Components of Engineering Contracts

◼ Articles in engineering contracts include:
◼ Definitions of terms
◼ Special provisions (e.g. Designated representative)
◼ Engineer’s services (Study phase, preliminary design
phase, final design phase, bidding and negotiation
phase, construction phase, post construction phase)
 CHAPTER THIRTEEN - CONTRACTS FOR
ENGINEERING AND CONSTRUCTION
SERVICES

Components of Engineering Contracts

◼ Articles in engineering contracts include:
◼ Additional services
◼ Requiring owner’s written authorization
◼ Construction cost limit
◼ Dispute resolution
◼ Allocation of risks
 CHAPTER THIRTEEN - CONTRACTS FOR
ENGINEERING AND CONSTRUCTION SERVICES

◼ Construction Management Contracts

◼ Provisions for selecting binding dispute resolution
techniques
◼ Provisions for owner and contractor to identify initial
decision maker (IDM)
◼ Information on the use of digital data (e.g. Standard
procedure for the transmission of the use of data)
◼ Selections for contractor payments of stipulated sum
◼ or cost of the work plus a fee with a guaranteed maximum price
 CHAPTER THIRTEEN - CONTRACTS FOR
ENGINEERING AND CONSTRUCTION SERVICES

◼ Other Contract Documents

◼ Construction
◼ Design/build
◼ Environmental remediation
◼ Joint venture
◼ Owner and engineer
◼ Engineer and sub-consultant
◼ Funding agency editions
◼ Procurement
Thank You