Pamantasan ng Lungsod ng Maynila

College of Engineering and Technology

Civil Engineering Department

CIV 0322
CE Laws, Ethics and Contracts

Lecture-5
Contract Documents and Bidding

Dr. J. BERLIN P. JUANZON CE, MBA, MSCM

Learning Objectives
To get familiarize with the bidding
process
To determine qualifications of
bidders
To determine bidding and
contractual information
Bidding Process

3
 Qualification of Bidders
Pre-qualification documents:
Information about the firm
 Owners
 Organization chart
 Company background
 General office location

Business licenses
 Business permits
 SEC/DTI registration documents
 BIR registration
 Contractors license
 SSS/Pag-ibig registration
 Qualification of Bidders
Pre-qualification documents:
Technical capabilities
 Years of experience
 List of projects completed
 List of technical personnel
 List of equipment
 Experience in related projects

Financial capabilities
 Financial Statements
 Balance sheet and Income statements

 List of accredited suppliers with credit lines

 Bank references with credit lines
 Bidding Information
The bid documents are sent out with the drawings and specifications to
the qualified bidders.
This section of the documents contains:
Invitation to Bid
Instruction to Bidders
Bid Forms
Bidding Information
Invitation to Bid
The invitation to bid is a request for
pricing. The owner usually prepares it with
the assistance of the designer or
construction manager.
It contains:
1. The type of project.
2. The size of project
 Bidding Information
Invitation to Bid
3. Location of the project
4. Bid due date
5. Start and completion dates
6. Bonds
7. Document location
8. Legal requirements
Bidding Information
Instruction to the Bidders
The instruction to bidders are usually bound in the
specification. Although they may repeat some of the
information in the invitation to bid or on the bid form, the
instruction are mostly concerned with the following:
Bidding Information
Instruction to the Bidders
1. Bid due date
2. Instruction about filling out the form
3. Places to indicate fees for additional work
4. Unit Prices
5. Location to deliver the bid
6. Method of awarding contracts
7. Expected dates of award and start of project
 Bidding Information
Bid Form
The bid form is the document on which the bidder
submits the price. The form is usually prepared by the
designer, with blanks left to be filled out by the bidder.
This makes the bids more easily comparable.
Bidding Information
Bid Form
Items may include some or all of the following:
1. Name of contractor
2. Price both in numbers and in words
3. Price breakdown for major trades, which can guide progress payments
4. Amount of bonds
5. Fees for additional work
Bidding Information
Bid Form
6. Unit prices if quantities are unclear
7. Key subcontractors
8. Legal status: (Single proprietor, Corporation or Partnership)
9. Signature of authorized representative of the firm, title and date
 Contractual Information
The contract issued with the construction documents goes to the firm
that will perform the work. This includes:
Agreement
General Conditions
Special Conditions
Sample of Bonds
Insurance requirements
Contractual Information
Agreement
Identification of the parties
Description of the project and the work
Date of start
Date of substantial completion
Liquidated damages
The contract sum
Progress payments
Interest rate
Retainage (Retention money)
Contractual Information
General Conditions
The purpose of the general conditions is to
establish he legal responsibilities,
obligations, authority, and rights of all
parties involved in the project.
Contractual Information
Special Conditions
The special conditions are sometimes called
supplementary conditions or special
provisions of the contract.
They are intended to supplement the general
conditions and are project-specific.
Special conditions include additional owner
requirements such as provisions for
prevailing wages and additional insurance
requirements
Contractual Information
Bonds
If the contractor fails to perform in
accordance with the contract, a bond will
protect the owner.
There are four types of bonds commonly
required in construction:
Bid bonds

Performance bonds

Payment bond

Guarantee bond
 Contractual Information
Bid Bonds
These are furnished with the bids and basically
guarantee that the contractor will enter into a
contract with the owner for the price of the bid.
Performance bonds
These guarantee that the contractor will perform
the contract with the terms of the agreement. If
the contractor goes bankrupt or otherwise cannot
complete the work, the bonding company becomes
liable for it.
 Contractual Information
Payment Bonds
Also called labor and material bonds, these assure
the contractor will pay all bills, thus leaving the
owner unharmed by claims and liens.
Guarantee bonds
These guarantee that the contractor will guarantee
the quality of work completed within a period of
one year prior to release of retention money to the
contractor.
Contractual Information
Insurances
To be purchased by the contractor as
required by the contract to protect the
contractor against risks during the
construction period.
Types of insurances:
Workers’ compensation

Comprehensive liability

Contractor’s All Risk (CAR)

Contractual Information
Workers’ compensation
This insurance covers disability and meducal
treatments for injuries resulting from accidents
that occur during the construction employment
Comprehensive liability
This provides protection from third-party
claims. It covers injury to non-workers at the
site, damage caused by construction vehicles,
damage caused by sub-contractors.
Contractual Information
Contractors’ All Risks (CAR)
This is essentially property insurance for the
building while it is under the control of the
contractor. It covers losses resulting from fire,
smoke, water, explosions, vandalism, and
theft.
Technical Information
The technical information is resented in
two formats: drawings and specifications.
These two different formats (one graphic
and one narrative) do not exist
independently but as a unit.
Technical Information
Technical Information
Technical Specifications
The technical specifications are written
descriptions of the quality of the project.
They detail the materials, equipment, and
workmanship to be incorporated into the
project
Types of Specifications:
Design specifications

Performance specifications

Proprietary specifications

Open specifications
Technical Information
Design Specifications
These are also known as descriptive
specifications.
They are detailed descriptions of materials,
workmanship, installation, and erection
procedures.
The contractor’s obligation is to follow the
instructions as laid out in the specifications
Technical Information
Performance Specifications
These lay out the expected results of the work
and leave the methods to the contractor.
Performance may be expressed in terms of:
Operational capacity

Functional qualities

Appearance

Finish

Color, texture, structural tolerance

Master Format Specifications
BIDDING PROBLEM (CE Board 2000)
A project has been bid out by the DPWH. The
approved agency estimate (AAE) is 500M pesos. The
results of responsive bidders are as follows:
Bidder A- P550,234,410.98
Bidder B- P620,345,763.12
Bidder C- P454,218,557.98
Bidder D- P389,122,897.44
Bidder E- P284,758,426.54
 Continuation…
The implementing rules and regulations of PD1594
states that no award of contract shall be made to a
bidder whose bid price is higher than the allowable
government estimate (AGE) or AAE, whichever is
higher, or lower than 70% of AGE.
The allowable AGE is defined as one half the sum
of the AAE and the average of all responsive bids.
For the purposes of determining the average
responsive bids, bids higher than 120% of the AAE or
lower than 60% of the AAE shall not be considered.
No negotiation will be allowed to bring down the bid
to the level of the AAE/AGE.
 Questions:
1. Who are the qualified responsive bidders?
2. What is the average of all responsive bidders?
3. What is the value of the allowable government
estimate (AGE) in peso?
4. What is the maximum bid price for the project?
5. What is the minimum bid price for the project?
6. To which bidder can the project be awarded?
ANSWER
Given: AAE = 500M
1. Qualified Responsive Bidders:
Upper Limit = AAE x 120% = 500M x 1.2 = 600M
Lower Limit = AAE x 60% = 500M x 0.60 = 300M
Qualified Responsive Bidders:
 A = 550,234,410.98
 C = 454,218,557.98
 D = 389,122,897.44

2. Average Qualified Responsive Bidders:

Ave Qualified Responsive Bidders = (A + C + D) / 3 =
464,525,288.00
 ANSWER
3. Approved Agency Estimate (AGE):
AGE = (AAE + ARB) / 2
AGE = (500,000,000 + 464,525,288.8) / 2
AGE = 482,262,644.4
4. Maximum Bid Price:
Since AAE > AGE
Max. Bid Price should not be greater than 500,000,000
5. Minimum Bid Price:
Min. Bid Price = 70% of AGE = 337,583,851.10
6. Winning Bid Price:
Only Bidders C and D are within the limits, therefore the
project should be awarded to the lowest of the two bidders
Which is Bidder D = 389,122,897.44
Group Assignment
Prepare a Bid and Contract Documents of a
specific project which includes :

Bidding Information
Contractual Information

To be submitted on or before the Final

Examination – in PDF file
THANK YOU FOR
LISTENING…
Contract Documents and
Bidding