Bidding: LARE 3

Invitation to Bid

Project is opened for public bids or a selected group of contractors are invited to bid on the project

The Bidding Period

Bidders assemble their bid materials and calculate their bids. Will have a deadline

Bid Review

Bids are reviewed and compared between one another.

Award of the Bid

Owner selects a bidder and awards the project to them (criteria for selection depends on project)

Addenda

Formal changes or clarifications to the contract documents need to be made

The Bid Form

Standardizes the bidding process, allowing the owner to evaluate bids on a like for like basis

Postqualification

LA assess the qualifications and licensing of the lowest bidders, review the contractors’ references and ensures that they met all other criteria (e.g. bid bonding)

Opinion of Probable Costs

Construction costs estimates produced by the designer

Lump Sum/ Fixed Price

Contractor to complete a scope of work for a mutually agreed upon and fixed sum of money. Change orders can alter total budget

Unit Price

Pricing for each unit of work or materials related to the proposed scope of work

Cost-Plus

Allow for reimbursement of construction expenses plus a predetermined fee for overhead and profit. Used when actual costs of project are difficult to estimate

Means and Methods

Labor, materials, temp structures, tools, and construction equipment as well as the manner and time of their use

The Surety (Bond Company)

Obligated to perform or to pay a specified amount of money if the principal does not perform

The Principal Debtor

Party whose performance is promised or guaranteed

The Obligee

Party of whom the promise of the principal’s performance is made

Bid Bonds

Used to provide the owner with an assurance that the contractor will enter into a binding construction contract and will provide the required payment and performance bonds if the contract is awarded to them

Performance Bonds

Assures that a financially responsible party stands behind the work of the contractor if the contractor does not act in conformance with the contract requirements

Payment Bonds

Used to guarantee that the contractor will pay their subcontractors and supplies and helps protect the owner against liens from any aggrieved parties