FAR Part 36Construction and Architect-Engineer

Contracts

36.000 – Scope of Part

This part pertains to policies and procedures peculiar to contracting for construction and A-E Services. Certain clauses and forms also apply to contracts for dismantling, demolition, or removal of improvements

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Subpart 36.1 – General36.101 - Applicability

• For acquisition of construction and A-E services, Part 36 shall take precedence if there are any inconsistencies with a requirement in another part of the FAR; otherwise, other parts of the FAR shall be followed when applicable.

• FAR Subpart 22.4, Labor Standards for Contracts involving Construction discusses the applicability of Davis-Bacon Act wage determinations in construction and non-construction contracts involving some construction work.

• For “mixed” contracts (those involving both construction, services or supply), contract clauses for the predominant part of work are included; however, if contract is divisible, clauses for each type (construction, services or supply) are included in contract.

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36.102 – DefinitionsContract: construction or A-Engineer servicesDesign: defining the construction requirement including architectural, environmental, structural, electrical, mechanical, and fire protection systems, etc; producing the technical specifications and drawings, and preparing the construction cost estimateDesign-bid-build: traditional acquisition method with design completed first under one contract followed by construction completed under a different contract--two contracts and two contractorsDesign-build: one contract with one prime contractor wherein both design and construction are included in the work scope. Considered to be a construction contractFirm: A-E contracts--any individual, partnership, corporation, or other legal entity permitted by law to practice the professions of architecture or engineeringPlans and specifications: drawings, specifications, and other data related to the construction activityRecord drawings: drawings prepared by the contractor reflecting the actual construction once it has been completed under the contractTwo-phase design-build selection procedures: type of “down-select” procedure (Subpart 36.3)

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36.103 – Methods of Contracting• Sealed bid procedures are used for construction contracting if the

conditions in FAR 6.401(a) apply which generally means if award is to be made on the basis of low price; discussions with offerors will not be necessary; and expectations of more than 1 sealed bid will be received.

• A-E services are acquired by negotiation (as opposed to sealed-bid) in accordance with Subpart 36.6 and agency regulations (DFARS, etc).

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36.104 – Policy• Generally, if not using “design-bid-build” procedures, two-phase

selection procedures must be used (see Subpart 36.3) when entering into one contract for the design and construction of a facility.

• Agencies are required to implement sustainable building design, construction, renovation, repair, etc. to minimize consumption of energy, water, and materials; reduce pollution and waste materials from demolition, etc.

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36.201 – Evaluation of Contractor PerformancePast performance evaluations for construction contracts is IAW FAR 42. 1502(e)--required for construction contracts ≥ $650k and in cases of T4D.

36.202 – Specifications• Construction specifications shall conform to the requirements in

FAR Part 11 (Describing Agency Needs).• As much as possible, references in specifications should be to

widely recognized standards or specifications.• When “brand name or equal” descriptions are necessary, the

essential characteristics/functions of the brand-name items must be identified.

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36.203 -- Government Estimate of Construction Costs

• CO shall receive an Independent Government estimate (IGE) for each proposed contract and modification > the simplified acquisition threshold ($150k).

• Generally IGE is only disclosed to Federal Government personnel with a “need to know”.

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36.204 -- Disclosure of the Magnitude of Construction Projects

Solicitations shall state the magnitude of construction based on an estimated price range. The following are the price ranges that are to be used (agency-specific regulations may allow more concise ranges at the upper level)

Less than $25,000Between $25,000 and $100,000Between $100,000 and $250,000Between $250,000 and $500,000Between $500,000 and $1,000,000Between $1,000,000 and $5,000,000Between $5,000,000 and $10,000,000More than $10,000,000 8

36.206 -- Liquidated Damages

A determination must be made whether a liquidated damages clause will be used in the construction contract. If utilized, the LD rate is based on an estimated daily cost to the government caused by contractor delay and may not be punitive in nature. Includes cost for additional Government inspection; renting substitute property; etc.

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36.207 -- Pricing Fixed-Price Construction Contracts

• Generally, contracts shall be firm-fixed-price. They may be priced – On a lump-sum basis for the total work performed; On a unit-price basis for a specified quantity of work; or A combination of the two methods.

• Lump-sum pricing is preferred method except – when work involves a significant amount of excavation or

grading; Work is difficult for offerors to quantify to develop adequate

estimates and could result in contractors “padding” proposed price to cover themselves.

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36.209 -- Construction Contracts With A-E FirmsCannot award a construction contract to the firm that designed the project unless approved by agency head.

36.210 -- Inspection of Site and Examination of Data• Offerors should be allowed to inspect the work site and have

access to data regarding work to be performed, such as boring samples and boring logs. The solicitation typically identifies time and place of an organized site visit to allow all offerors to inspect the site in the same manner.

• A record should be kept of the identity and affiliation of all offerors’ representatives who inspected the site or examined the data.

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36.212 -- Preconstruction Orientation

• CO will provide the successful offeror information including – labor standards requirements (FAR subpart 22.4):

Davis-Bacon Act--includes DOL wage determination)Copeland (Anti-kick back) Act—unlawful to coerce

construction employee to give up part of his pay as a condition of employment or for personal safety

Contract Work Hours and Safety Standards Act—paid 1 ½ times hourly rate for work in excess of 40 hours/week

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36.212 -- Preconstruction Orientation (continued)• CO will provide the successful offeror additional information

including – subcontracting plan requirements (FAR Subpart 19.7)—

large businesses must submit subcontracting plan for contract value > $1.5M.

Identity of federal staff who are significant for contract performance

Other information that will facilitate the success of the contract

• Good idea to provide this information in a preconstruction conference for face-to-face contact and to require inclusion of critical subcontractors.

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36.213 -- Special Procedures for Sealed Bidding in Construction Contracting

36.213-1 -- GeneralUse FAR Part 14 procedures for sealed bidding as modified by this subpart.

36.213-2 -- Presolicitation Notices• Issue presolicitation notices for requirements > simplified

acquisition threshold ($150k) prior to issuance of the invitation for bid so that the greatest number of prospective bidders are informed.

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36.213-2 -- Presolicitation Notices (continued)• Presolicitation notice (synopsis) must be publicized at

http://www.fedbizopps.gov for a minimum of 15 calendar days prior to issuance of the IFB and includeBrief description of the proposed work and

performance periodEstimated price range (e.g., between $1M -$5M) Location of the construction workDate when IFB will be issued and bid opening dateWhether award is set aside for small businessesCost, if any for solicitation documents

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36.213-3 -- Invitations for Bids

• The period of time between the issuance of solicitation and the date set for bid opening shall be sufficient to allow for bid preparation which includes site inspection; examining data concerning the work; understanding the plans and specifications; obtaining subcontract bids; and actual calculation of bid amount based on plans and specifications.

• FAR 14.202-1: agencies shall allow at least a 30-calendar day response time for receipt of bids from the date of issuance of a solicitation if >$150k.

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36.213-3 -- Invitations for Bids (continued)

• Invitations for bids (solicitation) shall be prepared either in accordance with the Uniform Contract Format identified at FAR Subpart 14.2 or alternative format.

• IFB includes Applicable Davis Bacon wage determination Performance of Work by the Contractor clause (52.236-1)

identifying % of work contractor must perform with its own forces (usually ≥ 12%); however 52.219-14 prescribes ≥ 15% for SB Set Aside

Magnitude of the proposed construction project Period of performance – usually expressed in # of calendar

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36.213-3 -- Invitations for Bids (continued)

• IFB also includes How bidders may inspect the site; examine boring logs, etc Identification of any government furnished utilities, office

space at the construction site, etc Pre-bid conference information, if any Special responsibility or experience requirements

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36.213-4 -- Notice of Award

The notice of award to the successful bidder shall – Identify the IFB number Identify the contractor’s bid amount State the award price Identify date when payment and performance bonds must

be provided to the CO Specify when work is to commence or alternatively when

NTP will be issued

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36.214 -- Special Procedures for Price Negotiation in Construction Contracting

• FAR Part 15 applies when negotiating prices (RFP vs. IFB)• Additionally (as supplemented in Part 36):

• Proposals shall be compared to the IGE When an element of proposed cost differs significantly

from the IGE, offeror may be required to submit cost information concerning that element (e.g., wage rates, significant materials or equipment and subcontractor costs).

When proposed price is significantly lower than the IGE, CO shall ensure both the offeror and the Government estimator understand the scope of work.

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36.214 -- Special Procedures for Price Negotiation in Construction Contracting (Continued)

• When appropriate, in addition to comparison to IGE, proposed prices may be compared to current prices for similar types of work, adjusted for differences in the work site and the specifications. Parametric estimating can also be used such as cost per linear foot for utilities, and cost per cubic yard for excavation or concrete.

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36.215 -- Special Procedure for Cost-Reimbursement Contracts for Construction

Cost-reimbursement contracts to acquire construction may only be used when consistent with FAR Subpart 16.3 and Part 15.404-4(c)(4)(i) fee limitations. Subpart 16.3 only allows a CR type contract when requirement cannot be sufficiently defined to allow for fixed-price contract or uncertainties in contract performance prevent construction costs to be estimated with sufficient accuracy to use a FP contract.

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Subpart 36.3 – Two-Phase Design-Build Selection Procedures

36.300 – Scope of Subpart

This part prescribes policies and procedures for use of two-phase design-build selection procedures for both military and civilian agencies (Agencies can also supplement this information)

This is a competitive negotiated procurement in accordance with FAR Part 15; not an IFB under FAR Part 14

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36.301 -- Use of Two-Phase Design-Build Selection Procedures

Two-phase D-B selection procedures shall be used if:

1. 3 or more offers are anticipated

2. Design work must be performed by offerors before developing price proposals, and offerors will incur a substantial amount of expense in preparing offers

3. Other considerations:• Extent to which the project requirements have been adequately defined• The time constraints for delivery of the project• Capability/experience of potential contractors• Suitability of the project for use of the two-phase selection method• Capability of the agency to manage the two-phase selection process• Any agency specific considerations

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36.302 -- Scope of WorkA scope of work is developed that defines the project and states the Government’s requirements. The scope may include preliminary design, budget parameters, schedule, etc.

36.303 – ProceduresEither• One solicitation may be issued covering both phases, or • Two solicitations may be issued in sequence (one solicitation

for each phase). • Phase One is a “down-select” process--proposals are

evaluated to determine which offerors may submit proposals for Phase Two resulting in the award of one contract.

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36.303-1 -- Phase One of the Solicitation• Includes:(1) The scope of work;(2) The Phase-One evaluation factors, including --

• Technical approach (but not detailed design or technical information);• Technical qualifications, such as --

• Specialized experience and technical competence;• Capability to perform;• Past performance of the offeror’s team (including the A-E and

construction members); and• Other appropriate factors (excluding cost or price related factors,

which are not permitted in Phase One);(3) Phase-Two evaluation factors (see below); and(4) A statement of the maximum number of offerors that will be selected to submit Phase-Two proposals. The maximum number shall not exceed 5 unless a greater number is considered in the Government’s interest.

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36.303-1 -- Phase One of the Solicitation (continued)• After Phase One evaluation of the proposals is complete, CO selects the most

highly qualified offerors (not to exceed the maximum number specified in the solicitation). These offerors are notified to submit Phase-Two proposals.

36.303-2 -- Phase TwoPhase Two of the solicitation

• is prepared in accordance with FAR Part 15• includes Phase-Two evaluation factors, developed in accordance with FAR

PART 15.304 such as proposed technical solutions/design concepts, management approach and key personnel

• Requires submission of technical and price proposals, which shall be evaluated in accordance with FAR Part 15 which is very comprehensive.

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Subpart 36.5 -- Contract Clauses36.500 -- Scope of Subpart

Prescribes clauses for insertion in solicitations and contracts for• construction and• dismantling, demolition, or removal of improvements

contracts

Other provisions and clauses prescribed elsewhere in the FAR shall also be used when applicable

FAR 52.236-1, Performance of Work by the Contractor

FAR 36.236-2, Differing Site Conditions

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Subpart 36.5 -- Contract Clauses

FAR 52.236-3, Site Investigation and Conditions Affecting the Work

FAR 52.236-4, Physical Data. FAR 52.236-5, Material and Workmanship

FAR 236-6, Superintendence by the Contractor

FAR 236-7, Permits and Responsibilities

FAR 236-8, Other Contracts

FAR 236-11, Use and Possession Prior to Completion

FAR 236-13, Accident Prevention

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Subpart 36.5 -- Contract Clauses

FAR 236-15, Schedules for Construction ContractsRequires contractor to submit a schedule of projected start and completion dates of salient features of the work (including acquiring materials and equipment). This is a progress schedule which allows the government to pay against as work progresses. If contractor falls behind schedule, contractor must get back on track at its own expense and government may T4D if appropriate.

FAR 236-21, Specifications and Drawings for ConstructionIf something is mentioned in one document but not the other it will be considered to be included in both. Specifications govern over drawings if there is a conflict between the two.

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Subpart 36.6 -- Architect-Engineer Services36.601-3 -- Applicable Contracting Procedures

• The A-E contract shall require the A-E to develop designs that provide for maximum practical use of recovered materials in the construction consistent with the performance requirements and cost-effectiveness; and consider energy conservation, pollution prevention, and waste reduction.

• A-E solicitation and selection procedures shall be done in accordance with FAR 36.6 procedures and not Parts 13, 14, and 15.

• If both A-E and other services are being procured in the same solicitation, FAR 36.6 is applicable if, to a dominant extent, the SOW requires performance or approval by a registered or licensed architect or engineer. If not required, procedures in FAR Parts 13, 14, or 15 are applicable.

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36.601-4 – Implementation

A-E services subject to procedures of FAR Part 36.6 are:

• Professional services of an A-E nature, as defined by applicable State law and which must be performed or approved by a registered architect or engineer.

• A-E services associated with design or construction of real property.

• Other professional services of an A-E nature or incidental services (including studies, investigations, surveying and mapping, soils engineering, drawing reviews, preparation of operating and maintenance manuals, etc) that logically require performance by registered architects or engineers or their employees.

• Professional surveying and mapping services of an A-E nature. Surveying is always considered to be an A-E service. Mapping associated with design, construction, or alteration of real property is A-E service. Mapping not connected to traditionally understood A-E activities are not subject to FAR 36.6 and fall under Parts 13, 14, and 15. 32

36.602 -- Selection of Firms for Architect-Engineer Contracts36.602-1 -- Selection Criteria

• A-E firms are evaluated in terms of:• Professional qualifications for performance of the contracted services;

• Related specialized experience and technical competence;

• Capacity to accomplish the work in the required time;

• Past performance related to cost control, quality, and schedule compliance;

• Location in the general geographical area of the project and knowledge of the locality of the project; and

• Acceptability under other appropriate evaluation criteria.

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36.602-2 -- Evaluation Boards

• A-E evaluation boards are to be composed of members who, collectively, have experience in architecture, engineering, construction, and Government. Board members are appointed from among highly qualified professional federal employees and, private practitioners of architecture and engineering, if authorized by agency procedure. Chairperson must be a federal employee.

• A-E firm is not eligible for award if any of its employees are part of the evaluation board.

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36.602-3 -- Evaluation Board Functions

• Reviews the current data files on eligible firms and responses received to a public notice concerning the particular project

• Evaluates the firms in accordance with the selection criteria

• Holds discussions with at least 3 of the most highly qualified firms regarding concepts and the relative utility of alternative methods of furnishing the required services

• Prepares a selection report for the Selection Authority recommending, in order of preference, at least 3 firms that are considered to be the most highly qualified to perform the required services. The report includes information regarding the considerations upon which the recommendations are based.

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36.602-4 --Selection Authority

• Selection decision made by agency head or a designated selection authority

• The SA reviews the board’s report and makes the final selection which is a listing, in order of preference, of the firms considered most highly qualified to perform the work. If the SA selects a different firm on the list as the most preferred which differs from the one identified from the board, then the SA has to document his rationale for the contract file.

• All firms on the final selection list are considered to be “selected firms” with which the CO can negotiate for contract award.

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36.602-5 -- Short Selection Process for Contracts Not to Exceed the Simplified Acquisition Threshold

2 short processes that can be used (otherwise the previous described process shall be used):

1.) Selection by the board. Selection board follows procedures at 36.602-3, and there is no separate Selection Authority. The board’s selection report contains the final selection list that is provided to CO which serves to authorize the CO to commence negotiations.

2.) Selection by the chairperson of the board. The chairperson of the board performs the evaluation functions at 36.602-3 which includes preparation of the report. The SA reviews and approves the report. CO utilizes the approved report as authorization to commence negotiations.

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36.603 -- Collecting Data on and Appraising Firms Qualifications

• Agencies shall receive and maintain data on firms wishing to be considered for Government contracts.

• A-E firm must file with the appropriate agency office SF 330, “Architect-Engineer Qualifications,” Part II (General Qualifications), and when applicable, the SF 330, Part I (Contract Specific Qualifications).

• The agency office shall maintain an A-E qualifications data file. Based on the information in the SF 330s, each firm shall be classified with respect to --

(1) Location;(2) Specialized experience;(3) Professional capabilities; and(4) Capacity, with respect to the scope of work that can be undertaken.

• Agency shall review and updated each file annually based on information received from the A-E firms including contracts they have been awarded. 38

36.604 -- Performance Evaluation

Past performance evaluations shall be prepared for each A-E contract ≥ $30,000 or each that has been subject to T4D.

36.605 -- Government Cost Estimate for Architect-Engineer Work

• Independent Government estimate (IGE) required for A-E work expected to exceed the simplified acquisition threshold ($150k).

• Generally IGE is only disclosed to Federal Government personnel with a “need to know”.

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36.606 – Negotiations

• Upon receipt of the final selection of the highest ranked A-E firms based upon qualifications, the CO can begin negotiations. Negotiations are conducted in accordance with FAR Part 15 beginning with the most preferred firm in the final selection.

• This is the first time in the selection process that the A-E firm is asked to submit a cost proposal.

• If negotiations are unsuccessful, the CO terminates negotiations with the first firm and proceeds down the list until successful negotiations have occurred.

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36.607 -- Release of Information on Firm Selection

• Upon receipt of the final selection list of highest ranked firms based on qualifications, the CO may release only the identity of the highest-ranked A-E firm with which negotiations will commence. If negotiations are unsuccessful then the CO may release the identity of the next ranked firm with which negotiations will occur and so on until negotiations are successful. Once an award is made then the CO may release award information.

• Debriefings of successful and unsuccessful firms are held after final selection has taken place and allows release of some but not all the information specified in FAR Part 15.

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36.608 -- Liability for Government Costs Resulting From Design Errors or Deficiencies

• An A-E firm may be liable for Government costs resulting from errors or deficiencies in designs furnished under its contract. Therefore, when a modification to a construction contract is required because of an error or deficiency in the services provided under the associated A-E contract, the government determines the extent to which the A-E firm may be liable.

• The CO shall issue a demand for payment from the firm if the recoverable cost will exceed the administrative cost involved.

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36.609 -- Contract Clauses

FAR 52.236-22, Design Within Funding Limitations• Clause in A-E contract with a fill-in for associated estimated construction price.

The A-E contractor is required to design the facility that will be constructed such that the government can award the construction contract at a price that does not exceed this estimated construction price identified in this clause.

• If the proposed price in response to the construction solicitation exceeds the construction funding limitation in the A-E contract, the firm must redesign the project within the funding limitation. The rework is done at no cost to the government as long as the higher proposed cost of construction is not due to events beyond the A-E’s control (e.g., increased material costs; government delay in issuing a construction solicitation).

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36.609 -- Contract Clauses

FAR 52.236-23, Responsibility of the Architect-Engineer ContractorA-E contractor is responsible for design errors or deficiencies and is required to make necessary corrections at no cost to the Government when the designs, drawings, specifications, or other items or services furnished contain any errors, deficiencies, or inadequacies.

FAR 52.236-24, Work Oversight in Architect-Engineer ContractsWork under the contract is subject to the general oversight, direction, and approval of the CO.

FAR 52.236-25, Requirements for Registration of DesignersRegistered architects or engineers are required to prepare or review and approve the design of architectural, structural, mechanical, electrical, civil, and other engineering features of the work.

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Subpart 36.7 – Standard and Optional Forms for Contracting for Construction, Architect-Engineer Services, and

Dismantling, Demolition, or Removal of Improvements

Identifies standard and optional forms, prescribed and found at FAR Part 53

SF 1442, Solicitation, Offer, and Award (Construction, Alteration, or Repair): shall be used for construction or dismantling, demolition, or removal of improvements contracts > simplified acquisition thresholdOptional Form 347, Order for Supplies or Services: may be used for construction or dismantling, demolition, or removal of improvements contracts that are at or below the simplified acquisition threshold; or may use SF 1442Standard Form 252, Architect-Engineer Contract: shall use for award of A-E Services

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