Bidding and Estimating

1 Chapter Bid Documents Ethics in Bidding Estimate Planning Estimating Framework Determining Estimated Costs Other Methods of Estimating Estimating Pitfalls Using an Estimator Submitting Your Bid Job Cost Recording System Technology Tools for EstimatingAccurate Estimating is important to the profitability of a construction company. If a job is estimated correctly, the contractor has a good chance at getting the job and making money. If the job is poorly estimated, the contractor may lose the bid or win the bid and lose money on the estimator must ask these questions when assessing whether to bid on a Resources and Type of Work: Does our company have the resources to perform this work?

2 Is this project consistent with the type of work we do?99 Site Considerations: Are there any special site considerations that we need to consider? Do the site conditions create any additional costs for our company?99 Location and Cost Effectiveness: How can we do the work efficiently and in the most cost effective manner? Does the location present special considerations and added cost through travel time and limited accessibility?99 Risk Assessment: What are the risks and how will we manage them?99 Profitability of Project: What is our profit margin on this work?If you know you cannot complete the job on time or there is a chance you could lose money on the project, we recommend that you not bid the job.

3 The jobs you choose should contribute to your long-term goals and the reputation you want your company to have in the DocumentsIn a competitive bid situation, a bid package is often put together that includes99an invitation to bid that gives a brief overview of the project, deadlines, and general requirements;99bid instructions that contain specifics of how the bid should be completed and submitted;99bid forms, including but not limited to items such as a bid sheet, bid schedule, bidder s questionnaire on experience, financial responsibility and capability, and a copy of the contract; and99supplements, including items important to the overall bid process such as a property survey and soil is important to follow all the instructions in the bid package carefully and submit all documents according to the required specifications.

4 The bidder can be found unresponsive if information is incorrectly submitted or omitted meetings may also be scheduled, especially for larger projects. In a pre-bid meeting, the project specifications and any changes to the bid package are discussed. Bidding and 16/5/15 2:33 PMBidding Guidelines Under Louisiana LawIn the State of Louisiana, a contractor s license is required prior to Bidding on commercial proj-ects of $50,000 or more; electrical, mechani-cal, or plumbing projects exceeding $10,000; residential projects of more than $75,000; home improvement projects exceeding $7,500 (home improvement projects exceeding $75,000 are considered residential projects); mold remediation projects of $1 or more.

5 And hazardous materials projects (including asbes-tos, lead removal and abatement, underground storage tank installation and removal, and hazardous waste treatment or removal) of $1 or architects, engineers, and awarding author-ities must state in the bid specifications the requirement that a contractor hold an active license and show the license number on the bid the bid does not contain the contractor s certification and show the contractor s license number on the bid envelope, the bid is auto-matically changes are made to a bid package before it is due, an addendum is issued. The addendum becomes part of the bid documents and, ultimately, part of the contract when awarded.

6 It is important to carefully review all addenda to evaluate the impact on your bid. Changes in plans and specifications may affect your bid pricing or even your decision to bid at all. Carefully evaluate whether Bidding on a project is the right decision for your in BiddingGood ethical conduct is necessary to maintain the integrity of the Bidding process. The situations listed below are not only a poor way to do business, but some state statutes forbid these practices on public Shopping Bid shopping occurs when the general contractor approaches subcontractors other than those who have submitted bids to seek a lower offer than what was quoted in original bids.

7 In this situation, the general contractor reveals the original bids submitted and tries to reduce the Peddling Bid peddling occurs when the subcontractor approaches the general contractor after the project was awarded with the intent of lowering the original price submitted on bid Rigging Bid rigging is a form of collusion where contractors coordinate their bids to fix the award outcome of a project. Estimate PlanningOnce you have determined that you want to submit a bid, you must prepare your estimate. An estimate is the sum of the costs to complete the project, plus your added overhead and profit margin. Before you start putting numbers down on paper, you should understand all the factors that impact the cost of the job.

8 A good estimate will fall within 1 percent to 2 percent of actual construction costs. Project DocumentsA complete set of project documents is required to prepare an accurate cost estimate. These documents include the following:99 Construction or architectural drawings that show a schematic diagram of the job. The drawings may illustrate many different views or elevations of the job. 99 Specifications are details that determine the type of materials or methods to be used in construction. If there is a conflict between the specifications and applicable codes, you must follow the stricter of the two. The codes are the minimum requirements by law. You must always meet or exceed the applicable contract is the agreement between you and your customer to complete the specified work.

9 The conditions outlining the obligations of each party, such as the owner and contractor, are included in the contract. If your bid is accepted, the construction drawings and specifications become part of the contract package. Contracts are covered in more detail in Chapter 26/5/15 2:33 PM99 Bonds may be required as part of the bid submittal (discussed in Chapter 4). Bonds commonly required are bid and performance should carefully review these documents to understand the project and the expectations of the customer. Site VisitThere may be specifics about the site that influence the cost estimate. These details cannot always be determined from the construction documents.

10 It is important that you go to the actual site and look at any factors that may impact the project. Soil type, grading, vehicle access, and availability to electricity and water are some of the variables that could affect the cost of the project. You want to anticipate as many of these problems as you can before beginning this time, you should consider the environmental aspects of the project. If you need to obtain environmental permits, this process will affect your estimated costs. Louisiana Pollutant Discharge Elimination System (LPDES) PermitsIt is important to note that Louisiana Pollutant Discharge Elimination System (LPDES) permit requirements may have a significant impact on your project.