Reaction Paper on Module 16 – Finalizing the Bid and Decision Diagram

Construction bidding process is an essential aspect of the construction industry. In a simple

sense, construction bidding can be defined as the process of offering the proposal or tender to
undertake a construction project. Specifically, construction bidding includes the process in which the
tender is submitted by the Contractor to the Client (or the Employer) as an offer to manage and
carry out the construction project. The primary objective of the construction bidding is to hire the
eligible Contractor by the clients and related firms. The Contractors in most of the cases get the jobs
of construction undertakings by the process of bidding on the construction projects. The bid or the
tender refers to the proposal that is offered to complete an undertaking. Construction tenders are
generally made based on the bill of quantities and the specifications of the contract. The Client then
selects the most suitable bidder for awarding the contract among all the eligible bidders.

The first step in the construction bidding is the bid solicitation. Bid solicitation refers to the
process in which the Employer or the Client seeks bids and makes the construction data available to
the interested parties. The construction data mostly include the drawings, specifications and other
relevant documents. The interested parties may be Contractors, Construction Managers or even the
Public. The bid solicitation process is also referred to as requesting for proposal (RFP) or a request to
tender (RTT). After the solicitation of the bid, the Contractors may subcontract certain pieces of
work to the Subcontractors. Subcontracting may also be done after awarding of the bid depending
upon the method of construction bidding adopted. The bidders then submit their bids within the
stipulated period. The Employer then selects the most eligible bidders depending upon several
selection criteria. After the selection of bidder, the contract is formulated i.e. the legal framework of
the project is drafted. The construction work is then commenced.

The three major decisions in the construction bidding process are as follows: The Project
Delivery Method, the Procurement Method and the Contract Model Method. The project delivery
method includes four major methods that assist the Employers to carry out the construction projects
within the projected time frame as well as budget. These methods are Design Tender (Design-Bid-
Build), Design-Build (D-B), Construction Management at Risk and Integrated Project Delivery (IPD).

Design tender or the design-bid-build method is the traditional method of the project
delivery system. This method is commonly used for construction projects such as government-
affiliated non-residential buildings and complexes. Basically, in this method, the Employer employs a
Designer (or an Architect) for the complete designing of the project. This is done by the contractor
who is managing the construction. Once the design is fully completed by the Designer, the bids are
solicited from the Contractor by the Employer so that the designs can be executed. The bid generally
covers the following aspects: the total cost of the construction of the structure particularly building
construction, the total cost of subcontracting, the total cost of the contractors, overhead costs, and
profits.

The DB method includes the process in which the Employer delivers the contract to a single
party. The party is responsible for both the design as well as the execution of works at the site. This
single party is commonly referred to as the design-builder or design-build contractor. In this method,
the design-builder is solely responsible for all the aspects of the construction project.

CMAR method is similar to the DBB method and is often used as an alternative to the DBB
method. It is used as an alternative when it is required to reduce the overall cost. This method
consists of handling the design and construction separately. The construction manager is employed
and involved before the design of the project is even commenced. The construction manager even
helps in assisting the selection of the designer or the architect. After the selection of the designer,
both the construction manager and the designer work together during the design phase. This
method is mainly used for complex projects.

The integrated project delivery method is also commonly known as the Integrated Team
Method. In this method, all the parties involved i.e. the Employer, Designer and Contractor work
together as a team and the risk is borne by each party equally.

The procurement method includes the method through which the construction services are
acquired. The procurement method is generally classified into the following: Best Value Method
(BVS), Negotiated Method, Sole Source or Direct Select Method, and Low Bid Method.

The contract model includes the process of development of the format of the contract and
the type of contract. Some of the important types of contract are: EPC Contract, BOOT Contract, DB
Contract, Cost Plus Contract, Lump-Sum Contract, and GMP Contract. The agreement between client
and management contractor is likely to cover both pre-construction and construction activities, with
a notice to proceed between the two, before which works contracts cannot be let. The terms of the
appointment must be clear about what is to be provided by the management contractor (such as the
provision of site facilities), and whether activities constitute pre-construction or construction
services.

There’s no point in bidding on construction projects your company is unsuitable for anyway.
You’ll simply waste time and money that could be spent pursuing better opportunities. Ideally, you’ll
want to weed out poor matches early in the process. If at any point when preparing the bid you
realize the project is beyond your scope or simply not worth it in some other regard, consider cutting
your losses. If you’re unsure about a particular aspect of the project, clarify things sooner rather
than later. This is especially important if the item in question is a potential deal breaker. When
bidding on a project, don’t just assume you have the resources to complete it successfully. Take a
close look at your construction resource management software to make sure you’re not misjudging
the availability of a particular worker or resource. It’s not uncommon for workers to get so caught up
in the complexities of bidding on a construction job that they miss out on simpler things like filling
out paperwork correctly. This sort of thing signals poor attention to detail, which is not how you
want to start off a project. Make a good first impression by reviewing things very carefully for
potential mistakes. Things often go wrong on construction projects. This is a fact of life. During the
estimating and bidding processes, you need to account for these risks and address them (either
directly in your bid or in other aspects of your business). If a construction project’s feasibility rests
heavily on the job site’s condition, you should try to actually assess the location for yourself. You can
often do this by attending a pre-bid meeting, which may be followed by a visit to the site.
Construction bidding can be a complicated process. In this article, we reviewed the basics, including
how to bid on construction jobs as well as the types of bids and contracts out there.