Additive and/or Deductive Bid Alternates to the Base Bid to assure contract award within available funding or budget.
Unit Prices when the quantity is unknown
Additive and/or Deductive Bid Alternates to the Base Bid to allow later decisions when the project mission requirements are not finalized.
Construction phase bidding IFB contracts
Foundation & Underground Utility Services
Pre-order Long Delivery Time Frame Power Plant Equipment
Pre-order Long Delivery Time Frame Building Equipment & materials
Remainder of building
Gerald Spencer will expand this discussion to include these additional methods as some later date if I can find the time.
Cost Plus Fixed Fee
Cost Plus Fixed Percentage
Cost Plus with Guaranteed Maximum Price Contract
Cost Plus with Guaranteed Maximum Price and Bonus Contract
Time and material
Unit price contract
Percentage of construction contracts
Construction contract acquisition procedures do not have any accepted written recommendation or method, but is a "moving target" subject different opinions from those in the construction industry, usually depending upon the financial interest of the individual. These recommendations will also vary among those in the construction industry with the same financial interests.
The following is my very much subjective and oversimplified definitions of various processes utilized in the USA to obtain contracts for the construction of buildings and other facilities. These definition are provided as a starting point for any discussion. I will be happy to discuss or argue my definitions in any forum that might be appropriate for discussion or debate of this topic.
The two most popular methods utilized to obtain contracts for the construction of buildings in the USA are the REQUEST FOR PROPOSAL (RFP) method and the INVITATION FOR BID (IFB) method. Other less utilized methods include the cost plus fixed fee, Two-Phase Design-Build Selection Procedures, Construction Team Process, Construction Manager and many other less popular construction contract acquisition methods. Construction contract acquisition in foreign nations is not discussed or considered herein this report, but Gerald Spencer is the Engineer of record for projects in Europe, Asia, Middle East, South America and the Carribean islands.
SPENCER ENGINEERS,INC. is the Architect-Engineer (AE) of record responsible for the total multi-discipline design and the construction of more than 400 construction projects since 1975, mostly for various Federal Government agencies.
Gerald Spencer has solicited, applied for, been awarded, managed and completed multiple U.S. Federal design contracts with the National Space & Administration Agency (70 projects), the US Army (30 projects), US General Services Administration (8 projects), US Air Force (4 projects), US Department of State (8 foreign projects), US Postal Service (34 projects) and the National Imagery & Mapping Agency (NIMA is now NGA - 4 projects).
Gerald Spencer has solicited, applied for, been awarded, managed and completed multiple AE indefinite delivery contracts with the City of Houston Police Department, the Port of Houston, the City of Houston Aviation Department (Now Houston Air Services), and the State of Texas GSA.
Architects and Engineers are not qualified to prepare Construction Contracts. Owners should retain a Lawyer to prepare the construction contract dxocuments. A lawyer will incorporate the construction Contract Documents (CDs) prepared by your Architects and/or Engineers that describes and defines the Scope of Work (SOW) into a construction contract with a contractor to perform the SOW as defined in the CDs!
The IFB type construction acquisition with completed plans and specifications prepared by Architects and Engineers that totally define the entire SOW in detail with complete and final drawings, specifications, and other documentation that requires that each bidder is bidding on the same defined project and submitting bids that propose to construct the identical project IAW the completed plans and specifications.
IFB will normally get the lowest price to construct the desired construction, but this process takes the longest amount of time before starting the construction.
IFB procedures require that the Owner first employ Architects and Engineers to prepare the drawings and technical specifications plus assist the Owner’s legal representative with the preparation of the invitation for bid advertisement, instructions to bidders, bid form, contract form, and the construction contract.
Gerald Spencer, P.E. has more than 50 years experience serving as the Engineer of Record responsible for the design and construction of the MEP portions of more than 1300 building construction projects since 1968 including more than 30 years of preparing forensic engineering reports. Gerald Spencer, P.E. has also been providing licensed professional engineering expert opinion and testimony concerning HVAC, electrical, plumbing, cryogenics, ventilation, construction contract compliance, construction cost estimating, construction contract acquisition, construction contract administration, and other construction matters for attorneys with since 2001.
My subjective definition of Contract Management is “directing and controlling the acquisition and construction of projects.” The amount of Construction Management Services desired depends upon the speed in which the project is needed, the project location if unusual labor and/or material supplies considerations need attention, and the Scope of the project in terms of size, location and dollars.
I have provided varying degrees of additional assistance when acquisition of construction is needed quicker than required by employing other processes of bidding.
I have performed as a General Contractor (and/or Construction Manager) for our clients where we provided architectural and engineering design when time constraints for construction prevented a more economical acquisition of the construction through competitive type IFB bidding or other processes.
I have not solicited general contractor construction contracts for project construction, but I have accepted these assignments when our clients have requested this service of me because their time constraints were more important than lower construction costs.
These clients know that I am not the most efficient (meanest) general construction contractor or the most experienced (meanest) purchaser of construction materials or the most adept (meanest) negotiator of subcontracts, but I have performed as the General Contractor when my clients requested that I do so in order to meet their time constraints.
This is more commonly known as the design-build type construction acquisition. Contractors respond to an Owner’s RFP that lists all of the items that the Owner desires to have in his completed project, and the contractor with the best price proposal is awarded a construction contract to construct that facility in accordance with that contractor’s proposal which includes performing the work required in the Owner’s RFP that includes the Owner’s scope of work (SOW) as a contract obligation.
Everything that the Owner wants in the project has to be included and defined in some type of a RFP document as a part of the SOW that is incorporated into the construction contract, or the Owner will not get those items of work without paying extra to the contractor to furnish and install whatever extra items of construction that the Owner wants in addition to those items included in the SOW as indicated on the Statement drawings or in the specifications required as a defined part of the contract SOW requirements part of the construction contract.
The RFP documents must indicate the SOW for the “subcontractors” also, or the Owner will have to pay extra for any desired work that is not listed in the SOW.
The Architects and Engineers working for contractors are still the parties legally and financially responsible for the design and the construction of the project as required to produce a project in accordance with (IAW) the applicable building codes that protect the health and welfare of the public IAW the codified requirements of the AHJs. Architects and Engineers of record who certify to the Authorities Having Jurisdiction (AHJ) that the drawings and specifications represent a project that will be constructed IAW applicable codes & standards and will not endanger the health & safety of the public are the parties that the AHJs hold legally and financially responsible for the health & safety of the public, permitting, code compliance, design failures, utility services, and other similar life safety features of the design and construction.
The Architects and Engineers are the parties that are also legally and financially liable and for any damages or injuries caused by any design deficiencies they might have created where that design affected the health and safety of the public, property damages, or other damages, no matter who is paying for their services.
If the Contractor hires an Architect or an Engineer as a subcontractor, then the Contractor is financially liable to the Owner for any damages created by the design deficiencies that the Architect or an Engineer might have created. The Architect or an Engineer is still liable to the Contractor for any design discrepancies created by the Architect or an Engineer's contract documents related to the project where the Contractor commissioned the Architect or an Engineer.
RFP contracting is usually the type of construction acquisition process that individuals employ to build most private residences. Residential house construction contracts will usually only have a floor plan and some exterior house elevations with one or two pages of “specifications” as the technical part of the SOW for the contract between a house builder and an Owner.
The drawings prepared by the Architect in this type of construction contract acquisition are usually incomplete, without many construction details and maybe just a floor plan and exterior elevations.
The specifications might require that the house will be air conditioned and this implies that an air conditioning contractor will air condition the house in any manner that the air conditioning contractor wants to do this, which usually means that the air conditioning contractor will install the very least expensive air conditioning system that the contractor can design and build. Zoning and temperature control might not satisfy most owners.
These Principals are true for the electrical, plumbing, ceramic tile, doors and the other items that the specialty contractors design and install as a part of the house building construction contract.
The contractor is required to install cabinets where cabinets are indicated on the drawings, but these cabinets can be the least expensive prefabricated cabinets that the contractor can find at Home Depot or Lowe’s.
If the Owner desires special Formica covered custom cabinets then you will have to pay the contractor an extra amount for the contractor to build and install the more expensive cabinets (and any other similar items that the Owner might desire) unless these more expensive cabinets are required as a part of the SOW.
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