Today’s land development industry is fast-paced with numerous project deadlines and expectations. Here are a few best practices for tendering that might take you a little more time to setup prior to the tender going out but will add value over the entire length of the project (and lower stress):
Treat the contractors bidding as you would treat your clients.
Yes, you are the paid consultant for the land development project and you have a tremendous amount of expertise in your discipline. Moreover, if you’re at the tendering stage you’ve have most likely gone through multiple revisions of your drawings and they’ve been approved by local officials. So you definitely know what you’re doing, I won’t dispute that! However, your reputation is still on the line. Yes, your reputation from the perspective of the contractors bidding on the tender.
Contractors have seen it all, good contract administrators, great contract administrators and not so great contract administrators (not you of course, the other guys). Would you submit drawings or tender forms to your clients with mistakes or oversights? No, I didn’t think so. Make sure an experienced contract administrator reviews your tender form, your drawings, specifications and all other tender documents one last time.
The point is, the better the experience the contractors have the more likely they are to speak well of your firm to the client or recommend you to another client! Don’t take this lightly, some contractors have become trusted advisors to their clients and can have a tremendous impact on which consultants they work with in the future.
More on improving the contractor user experience in the next point.
Ensure there are no unknowns or variables that can change.
The most common area where this is an issue is with the assumed site conditions the contractor should expect before starting their scope of work. In rapid paced land developments, landscape architects and civil engineers typically have to tender out their unit priced contracts prior to everything being ready. It’s typical for other contractors to be involved in getting another portion of work ready prior to start of work. As a general rule of thumb, if the contractor does not have access to the site, establish some realistic assumptions with minimal variances. Don’t leave room for underestimating and don’t set it up hoping that one of the contractors will make a mistake. This will only hurt in the end, be fair and you will have fewer issues later.
Another option you have if there are no definite quantities is to make some assumptions in the tender form, and add provisional items in case they are exceeded.
Also, it’s true, there is a specifications booklet and most contractors refer to them, but do you think they will read every single detail? In order to minimize missed details or requirements by contractors, make sure to add them in the tender form whenever possible. Ex: “including removal offsite” is a big one… don’t hide that in the specifications.
Don’t use terms like “at the contractor’s discretion”. Let the contractors know exactly what is expected and the quantities involved.
Is the warranty period properly defined? When does the warranty start? Are there any situations which can delay the warranty period that are outside of the contractor’s control?
Lastly, how long are the prices good for? Is it possible that the job be delayed for a number of years? Do you have a provision in place that quantifies the increases if this happens?
In the end, your goal is to minimize addenda required to send out during the tendering process, which takes time and costs your company money. You also want to minimize site disputes and establish clear up-front contracts with your contractors.
Create a clear and concise bid notification letter or email.
The more information you can share with the contractors right from the bid notification or invitation, the better. Here are some of the most relevant ones that impact whether or not a contractor can actually bid on a project. More importantly, can they handle the work and/or do they want to?
- Client/Owner (use their branded name so the contractors know who it is);
- Location (City is fine here);
- Due date;
- Scope of work;
- Proposed Schedule;
- Site meeting requirements (mandatory or not?);
- Contract administrator in charge of receiving questions (phone and email).
At some point in the tendering process, ensure you have received a response from each contractor to confirm whether or not they will be bidding on the tender.
Ensure you have qualified contractors.
Ask yourself the following questions:
- Do they all have the same experience? Resources?
- Have you worked with them before? If not, do they have references or reviews online?
- Do they have a good brand? A nice website?
The idea is that you truly want to compare apples to apples. Yes you want aggressive pricing, but if you don’t plan to ever work with a specific contractor because they are a pain to deal with, don’t invite them to bid. It’s not fair to them or the others, and it could establish unrealistic pricing expectations with the owner.
Send digital files in the cloud – including a digital tender form with take offs.
Digital drawings are pretty standard these days but it’s still important to note how critical they are for general contractors getting prices from sub-contractors. I don’t know too many contractors that have a 24” x 30” scanner.
Use a cloud based software solution similar to Dropbox or Box, ensure they are easily accessible to all bidders. Include all your documents organized in particular folders:
- Drawings
- Specifications
- Tender Form
- Reports
- Addenda
Also, take the time to include quantity take offs for your contractors to bid on. This saves the contractors a lot of time (you can do it in CAD 10 times faster, for all to benefit from), it prevents mistakes and ensures you have comparable bids.
Provide a deadline for questions and suggestions.
This one is for you, if the contractors don’t have a deadline for their questions and suggestions you will typically get some procrastinators calling at the last minute asking away. Make it clear from the start of the tender that there is a deadline for your questions so that it’s not a surprise later on. The deadline encourages contractors to properly review the bid documents and tender form well in advance of the tender due date. 3-4 days before the due date is acceptable to most contractors.
Leave at least 2 days between the due date and your last addendum.
If you follow the above tip you will have more success with this one. Last minute changes aren’t ideal for contractors, especially if there are sub-contractors involved. If you have to issue an addendum at the last minute, it’s common courtesy to extend the deadline to accommodate a couple days to make the changes or ask subs for revised pricing. Estimators find it stressful enough to receive pricing from sub-contractors in time for a regular tender, imagine how stressful it can be for a last minute change.
Confirm all addenda have been received prior to tender close.
This is typically done after the tender is closed. I’m suggesting that you are better off if you address this potential issue prior to the tender closing. Again, you want to compare apples to apples and if a contractor missed an addendum it will cause delays in the tender review and analysis process. Your clients are busy, you don’t want any delays for an accurate bid review.
Choose your preferred method but you could either call each contractor a couple days before the tender close or you could email them to receive confirmation. Either way, it’s an extra step but will ultimately prevent delays.
Ensure you have a transparent bidding process (with no room for doubt).
The last thing you want is to lose complete trust from your clients. You could go old school and request a hardcopy version of the tender to be sent to your office before the deadline (or even to the client’s office). However, the title of this post implies MODERN tendering practices…
Therefore, you can utilize an eTendering platform that allows owners access as well. That way as soon as the bid results become available to you, the owner can see them as well. The owner can be at ease that there was no tampering with bids post-tender.
Typically, eTendering platforms also allow bidders to submit their prices prior to the deadline although prevent the owner and contract administrators from seeing their results until after the deadline has passed. This also adds additional peace of mind.
Alternatively, you could receive bids by email and ask bidders to copy the owner upon submission. This isn’t a fool proof system but it’s better than nothing.
Stay tuned for a future blog post on: The 7 must dos for every tender review.
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