NMPPA NMPC Class
description
Transcript of NMPPA NMPC Class
NMPPA NMPC Class
PUBLIC CONSTRUCTION
CONTRACTING IN NM
Las Cruces Southern ConferenceAugust 21, 2008
NMPPA New Mexico Procurement
CertificationClass
Presented by:
Dotty McKinney, CPPB PSFA Contracts Administrator
PLANNING
DESIGN
CONSTRUCTION
PLANNING
What makes a successful Project?
Identify and engage all constituents in the
construction activities
- Planning
- Execution and logistics of
the construction project
- Post construction occupancy
What makes a successful Project?
Public Sector Owners
In planning a Public Works Project, it is wiser to “include” any and all constituents than to “exclude” them in the process.
Internal Constituents
External Constituents
What makes a successful Project? Internal Constituents
User Groups, especially
- Building Managers
- Maintenance/Operations
- Security/Safety/Environmental
- Information Technology
- Parking/Logistics/Communications
- Governing Board
What makes a successful Project?
External Constituents
Neighborhood Associations
Advocacy Groups
Regional Planning Authorities
Local Planning Authorities
Compliance Authorities
What makes a successful Project? A successful project minimizes the time,
once planning and funding are in place, between the award and the project completion without sacrificing quality, compliance with laws and regulations, and being accountable to policymakers and the public.
Timely WITH
Quality, Compliance & Accountability
“Keys” to a successful ProjectGood management -
●of the breadth of interests to be serviced
●of the time required to serve them
Understanding you can’t please everyone –
●but listening to all sides of an issue even though the ●ultimate answer may be “no”
●using the best judgment possible
●being prepared to defend the logic behind decisions made
●informing rather than telling, being rational
●making it a “win-win” for everyone involved
“Barriers” to a successful Project• There are a lot of unknowns in construction and
success sometimes requires quick decisions to be made that can have costly and time consuming consequences.
• Legal barriers• Physical barriers• Environmental barriers• Funding barriers
TRANSLATION – “LACK OF PLANNING”
CONSTRUCTION DOLLAR$
Project Funding
How much funding is available
When funding is available
Schedule to expend funding
Funding Sources
From other public agencies
Local or State appropriations
Federal
Or combination of the above
CONSTRUCTION DOLLAR$
When Acquiring Funding“Players must be able to relate the request in a general, broad-brush-stroke of information involving the building and associated costs as well as understanding of timing and logistics of the project – simply and informatively”.
The application for funding may take place long before design professional services are engaged.
There are numerous sources for identifying “cost per SF” for various building types such as “Means for Construction Cost Estimating Guide”, and other agencies/entities having recently built similar facilities.
CONSTRUCTION DOLLAR$
Funding Sources – Important Things to Know!!!Requirements that accompany funding
- Appropriation languageWhat funds may be spent onTime lines for expendituresType of building and standards that apply
Size of rooms, qualities of amenitiesTypes of materials, Green/Leed
- Federal & NM Davis Bacon wage rates
CONSTRUCTION DOLLAR$
Once Funding is in place -● Hire a design professional qualified to design the project
based on the scope of work and the budget.
• Assign staff to the Project that are knowledgeable in procurement methods and state requirements governing public works projects, and construction.
• Ensure that both the design professional and construction contracts are followed and enforced – more commonly known as “Contract Administration”.
DESIGN
The Design Professional
NM Statutes you must know!13-1-66.1 “Local public works project”
means a project of a local public body which uses architectural or engineering services requiring professional services costing fifty thousand dollars ($50,000) or more, or landscape architectural and surveying services requiring professional services costing ten thousand dollars ($10,000) or more, excluding applicable state and local gross receipts taxes.
The Design Professional Statute 13-1-76 NMSA 1978 Definition;
professional services.“Professional services” means the services of architects, archeologists, engineers, surveyors, landscape architects, medical arts practitioners, scientists, management and systems analysts, certified public accountants, registered public accountants, lawyers, psychologists, planners, researchers, construction managers and other persons or businesses providing similar professional services, which may be designated as such by a determination issued by the state purchasing agent or a central purchasing office.
The Design Professional
The statute for “professional services” does include architects. However, any services required of an engineer, landscape architect, surveyor, or construction manager means that a letter of determination justifying the District’s need for these or other types of services would become the first document in the procurement file.
The Design Professional
The professional services for architects in definition 13-1-76 is appropriate for research reports, studies, evaluations, etc. that do not require “formal bidding documents including plans, specifications , professional liability insurance to cover any errors or omissions, that would require a standard Design Professional Agreement.
The Design Professional
Statute 13-1-119 NMSA 1978. Competitive sealed qualifications-based proposals; architects; engineers; landscape architects; surveyors; additional requirements.
“In addition to compliance with the requirements of 13-1-112 through 13-1-114 and 13-1-116 through 13-1-118 NMSA 1978, a state agency or local public body, when procuring the services of architects, landscape architects, engineers or surveyors for state public works projects or local public works projects, shall comply with Section 13-1-120 through 13-1-124 NMSA 1978.
The Design Professional
Qualifications based proposals have very definite criteria and rules for evaluation that are provided in the statutes referenced in Statute 13-1-119 NMSA 1978. These statutes define the method and procedures required to procure these services.
Cost is not a factor. The professional’s abilities, resources, technical competence, past record of performance, proximity to the project site, and volume of work previously or currently being performed for the entity are taken into consideration when awarding a contract.
The Design Professional
PUBLIC WORKS PROJECTS
Public Works Projects require RFP Selection Process for Design Professionals
IFDesign fees will be $50,000 or greater for Architects and Engineers, and $10,000 for Landscape Architects, and Surveyors
The Design Professional
QUESTION: What about Design Professional contracts that are less than $50,000 in fees and reimbursables, if applicable, but exclusive of GRT? Do I need to go out to RFP?
ANSWER: No. Because the Design Professional fees and any applicable reimbursables, exclusive of GRT is less than $50,000, it is not a public works project and therefore the RFP process of procurement is not required.
The Design Professional
Professional Technical Advisory Board NMSA 13-117-2 – Required by Statute since
1979. Purpose: To provide professional technical
advisory services to local public bodies in the development of Scope of Work, RFP, ad the selection of professional services of architects, engineers, landscape architects and surveyor through the use of the “qualifications based selection process”.
The Design Professional
In summary, qualified professional services have their own set of procurement guidelines and evaluation process that is required by the Procurement Code, in addition to the requirements for request for proposals. The professional services acquired to produce drawings, specifications, maps, etc., carry a certain liability to both the procuring entity and the professional, and require that the professional be properly licensed so that drawings, specifications, etc. meet all of the local and/or national laws, codes, local requirements, etc. necessary to provide a safe, complete environment.
The Design Professional
Again, architects, engineers, landscape architects and surveyors can provide professional services, those that require evaluations, reports, investigations, etc. And they can provided qualified professional services that require drawings, specifications, maps., as well as the entity providing certificates of insurance in the event gross errors or omissions occur.
The Design Professional
PROJECT BUDGET
MACC
DESIGN FEES
The Design Professional√ It is important to understand the Project Budget
(overall funding and funding sources) Maximum Allowable Construction Cost, and appropriate design fees for execution of your Project.
√ The Design Professional’s fees are based on the Maximum Allowable Construction Cost, not the Budget.
√ The Budget includes the MACC (cost of construction) site work, design fees, FF&E, some consultants, and if appropriate, CM fees, a contingency amount for errors & omissions,administrative fee allowances and all NMGRT.
Probable Cost Estimate1. Construction costs (bldg type, materials, special considerations)
Professional Services1. Design fees2. Other design services (Landscaping, Interior Design)
Indirect Costs1. Owner Consultants 2. Testing
(surveys, geo-tech, concrete & structural, TAB, Hazardous Material)
1. Legal Ad/Contract Document Printing Costs2. Builders’ Risk Insurance3. Commissioning Services4. FF&E5. Demolition
Project Budget
MACC“Maximum Allowable Construction Cost”
means the amount that is set by the Owner and represents the total sum available for the Cost of the Work, the CMAR Fee, and General Conditions, excluding gross receipts tax, but may include furnishings, fixtures and equipment.
MACC shall not include professional fees, testing fees, Owner’s project contingency funds, acquisition costs or other soft costs.
Design Fees
13-1- 124 NMSA 1978 Architect rate schedule. The secretary shall adopt by regulation an architect rate schedule which shall set the highest permissible rates for each building-type group, which shall be defined in the regulations. The rate schedule shall be in effect upon the approval of the state board of finance and compliance with the State Rules Act and shall apply to all contracts between a state agency and an architect which are executed after the effective date of the architect rate schedule.”
Design Fees
are based on a percentage of the MACC, taking into consideration the complexity of the Project. Typically, the greater the MACC for a building type, the lesser the percent fee.
EXAMPLE: MACC = $1,000,000DESIGN FEE% = 6.0%FEES (not incl. GRT) += $60,000
The Design Professional
RFP STEPS Committee & Duties
1 Legal Notice
2 Pre-Proposal Conference
3 Receipt of Proposals
4 Evaluations/Short List Ranking
5 Notices/Interviews
6 Award
7 Contract negotiations
The Design Professional
The Selection Process – What you need to know!
Do not rush the process
Do ensure proposed schedules are realistic
Do not make your decision on a “design” that
you like, it may not fit your project
Do consider the “design team” and their abilities and their availability to manage your project
The Design Professional
Negotiating a Contract
√ Complexity of the Project and Budget dictate the fees that can be charged by the DP
√ Remodels, Renovations and Additions may require additional work and coordination, and may warrant an additional ½ to 1% in fees
√ Additional costs may be required for difficult site conditions
The Design Professional
√ Landscaping, interior design, etc. may are specialty or “additional services” as well that warrant extra fees.
√ Although fees are negotiable, the rates set forth by the State are fair and reasonable.
√ Always require professional liability insurance of the design professional for design services.
The Design Professional
BUZZ WORD
PROJECT DELIVERY METHODS
When you interview the design professionals, you may want to explore their knowledge and experience in working with different methods of construction contracting such as -
Project Delivery Methods
PROCUREMENT OPTIONS
DBB Design/Bid/Build – 13-1-102 DB Design/Build – 13-1-119.1 RFP Request for Proposal - 13-1-111
for Construction & Maintenance Services CMS Construction Management Services –
Not at Risk 13-1-40.1 CMAR Educational Facility
Construction Manager AT RISK 13-1-124.1 (HB303)
Project Delivery
DELIVERY METHODS
PER THE PROCUREMENT CODE DEFINITIONS ARE KEY SOME DELIVERY METHODS HAVE RULES
(REGULATIONS) THAT DESCRIBE HOW TO PROCURE IN DETAIL (Available on SPD website at www.state.nm/spd)
Which Method To Use?
What to consider when making your decision
STAFF KNOWLEDGE
of different methods available UNDERSTANDING
various project delivery methods SELECTION
of appropriate method IMPLEMENTATION
of chosen project delivery method
Which Method To Use?
* What is allowed by law
* Who on your staff is available
* When is the Project to be ready
Other factors
- What Benefits (not Obstacles)
are evident in the Project circumstances
Which Method?
The one that fits BEST!
DesignPlanning Bid Construction Occupancy
NEED Recognized
Traditional Linear Process
The Four Phases(every project goes through)
Design
Planning
Occupancy
Construction
Fast-Tracking Process
Bid
DESIGN / BID / BUILD
Low Bid
DBB - Design / Bid / Build
LOW BID
1. Traditional method of procurement
2. Owner selects designer to design building
3. Contract awarded to Lowest Responsible Bidder
4. Owner holds Design/Construction Contracts
5. Subcontracts held by General Contractor
LOW BID
Considerations:
√ Separate contracts for design & construction
√ Final selection based 100% on total cost
DBB - Design / Bid / Build
LOW BID
PROS:*Process intends to stimulate price competition*Process understood by owners & public*Process has established legal & procedural guidelines*Fairness of the process allows qualified contractors to compete on an equal basis*Owner has an expectation of finished product prior to construction based upon design & price
DBB - Design / Bid / Build
LOW BID
CONS:√ Process may require considerable time√ No guarantee that bid won’t exceed budget leading to delays to re-bidding or canceling project√ Adversarial relationships can develop
Owner – wants best possible building at lowest cost
Architect – wants to satisfy Owner & meet design elementsContractor – must complete job within time & price
√ Differences in interpretation of contracts√ Differences may result in claims/delays to be resolved
DBB - Design / Bid / Build
DESIGN / BUILD
Request for Proposal
Negotiated Price
DB – Design Build
13-1-119.1 NMSA 1978
Definition: “means a procurement process by which a using agency contracts with one firm who has responsibility for the design, construction and delivery of a project under a single contract with the agency”.1. Procured using the RFP method
Qualifications basedEvaluation criteria same as DP
2. Regulations – NMAC 1.5.7Guides you step-by-step
DB – Design Build
13-1-119.1 NMSA 1978
Important Note: If project budget is less than $400,000 or more than $10,000,000 you can use the DB process. If your budget falls in-between these figures, you cannot use the DB process.
DB - Design Build
PROS:• One contract for design/construction saves time• Long lead time items can be identified, order ahead • Quicker resolution on issues – design/costs• Project cost determined relatively soon• Contract documents can be less detailed• Value engineering & constructability review enhanced• Complex projects – full integration of design &
construction enables fast schedule with controlled budget
• Project close-out may be smoother as fewer parties are involved
• Possibility of fewer disputes, changes, claims & delays
DB – Design Build Cons:
• Owner must provide clear scope of work & project requirements
• Potential loss of checks & balances (DP/Contr)• Loss of objectivity may be perceived as Owner’s decision
based on qualifications, not price• Insurance/Design liability must be addressed - design services require licenses of design/build team• Less detailed documents may result in
misunderstandings by Owner – affect time/price• Owner may require more cost monitoring than lump-sum
contracting
RFP
Request for Proposal
forCONSTRUCTION
MAINTENANCE, SERVICES & REPAIRS
Discussion:
This competitive sealed proposal process is authorized to give agencies flexibility to obtain the best overall value from a procurement contract. This is accomplished by permitting consideration of certain contractor qualification and performance factors that add value to a procurement contract, such as past performance, technical expertise and experience, management capabilities and resources.
RFP for Construction, Maintenance, Services & Repairs
13-1-111 NMSA 1978
Became Law in 2003
1.4.8 NMAC Regulations issued 2005
Step-by-step guidelines
RFP for Construction, Maintenance, Services & Repairs
SUMMARY OF STEPS
1. Owner hires DP, develops
Scope/Design & Bid Documents
2. Owner issues Request for Proposal
Qualifications
Team of Subcontractors
3. Offerors (General Contractor) are
evaluated on criteria determined by Owner
4. Short List – Best & Final Offer(s)
5. Contract Negotiations – “GMP”
RFP for Construction, Maintenance, Services & Repairs
Definition -
“GMP” means Guaranteed Maximum Price and is the maximum amount to be paid by the governing body for the construction of the educational facility, including the Cost of the Work, the general conditions and the fees charged by the CMAR.
Pros:√ Early construction input in Design Phase√ Ability to Fast Track√ Ability to evaluate Construction “Team”√ Collaborative (not adversarial) process√ Early cost feed-back/value engineering√ Higher quality product √ Cost controls – Guaranteed Maximum Price
RFP for Construction, Maintenance, Services & Repairs
Pros:√ Early construction input in Design Phase√ Ability to Fast Track√ Ability to evaluate Construction “Team”√ Collaborative (not adversarial) process√ Early cost feed-back/value engineering√ Higher quality product √ Cost controls – Guaranteed Maximum Price
RFP for Construction, Maintenance, Services & Repairs
Cons:√ Must have very well-defined Scope of Work
& √ Must have clear understanding of RFP
process and the Best & Final Offer process
√ Must have committed and knowledgeable Evaluation Committee members
√ Must understand project scope/time lines Cost of work is not the only factor!
RFP for Construction, Maintenance, Services & Repairs
CM
Construction Manager/
Construction Management Services
Not at Risk
CMS Not at Risk
Definitions: 13-1-40.1 NMSA 1978 reads:
A. “Construction management” means consulting services related to the process of management applied to a public works project for any duration from the conception to completion of the project for the purpose of controlling time, cost and quality of the project.”
B. “Construction manager” means a person who acts as an agent of the state agency or local public body for construction management, for whom the state agency or local public body shall assume all the risks and responsibilities.
CMS Not at RiskDiscussion:1. Services procured through RFP process2. Includes a comprehensive array of management
and/or consulting services spanning all phases of design & construction process from conception to completion of the project
3. Purpose is to control time, cost and quality of project for the Owner
4. DOES NOT include professional design or professional engineering services
5. DOES NOT include acting in the capacity of a contractor or any tier of contracting for a construction project
CMS Not at Risk
Pros:√ Project management delegated to Consultant
– saves time√ CM must be licensed – qualified to perform
services required√ Level & degree of services required are
determined by the Owner√ CM represents the interests of the Owner√ Design Documents are not complete when
CM engaged—substantially complete when bid occurs
CMS Not at Risk
Cons:
√ Owner, not the CM, assumes the RISK & RESPONSIBILITY for the project
√ May require multiple contracts for subcontractors & sub subcontractor tiers
√ Control of costs/change orders may be difficult
√ Control of project close out/warranty items may be difficult to execute and control
Owner
General/SubContractors
General/SubContractors
A / E
CMS – Construction Manager(Many Separate Contracts for Design & Construction)
Responsible for own portion of Construction
Responsiblefor Design
CM
Responsible for Administration
of Project
Responsible for Performance and
Holds Trade Contracts
General/SubContractors
General/SubContractors
General/SubContractors
General/SubContractors
General/SubContractors
General/SubContractors
General/SubContractors
General/SubContractors
General/SubContractors
General/SubContractors
CMAR
CONSTRUCTION MANAGER - AT RISK
For Educational Facilities
CMAR
Educational Facility Construction Manager – AT RISK
HB 303Introduced in Legislative Session 2007
Amends 13-1-102, Competitive Sealed Bids 13-1-119.1 Competitive Sealed Proposals
CMAR Discussion:
“CM at Risk” means a person who, pursuant to a contract with a governing body, provides the preconstruction services and construction management required in a construction manager at risk delivery method for an educational facility including - Pre-construction management
Cost Estimation & consultation regarding designPreparation & coordination of bid packagesSchedulingCost controlValue engineeringActs as GC during construction
AT A GUARANTEED MAXIMUM PRICE !!
CMAR
Procured through the RFP Process
TWO STEP – UP TO $500,000
or
THREE STEP – OVER $500,000
CMAR
TWO-STEP Procurement ProcessUp to $500,000
Establish Selection Committee& Evaluation Criteria1. Solicit Qualifications2. Interview Offerors
CMAR
THREE-STEP Procurement ProcessOver $500,000
Establish Selection Committee& Evaluation Criteria1. Solicit Request for Qualifications2. Solicit Request for Proposals3. Interview Offerors
CMAR
Qualifications include: Licensing for Work to be performed Bonding Capacity Detailed statement of obligations of
all parties including Owner/CM at Risk/
and Design Professional
CMARPros:√ Possibly quicker process than DBB√ Potential CMAR can be pre-qualified and short-
listed√ CM can be brought on early – perform pre-
construction services for Owner√ Smooth integration of design & construction√ CM makes recommendations during design√ Value engineering/constructability/cost
reduction by CM prior to completion of Bid documents
√ GUARANTEED MAXIMUM PRICE Contract & schedule
CMAR
Cons:√ Loss of objectivity in selection process – Owner
selects based on Qualifications rather than Price
√ Owner may require more cost-monitoring than DBB
√ Selection of CM requires qualifications based process which may be manipulated
√ Must maintain Open Book to ensure return/cost savings to Owner of GMP otherwise, CMAR may focus on wrong goals
JOC
JOB ORDER CONTRACTING
JOC Question:
What is J O C?■ Answer:
Competitively bid, firm fixed price,indefinite quantity contract for smallconstruction services and/or installation of finished products, materials, or merchandise and equipment which will become a permanent fixture of a structure
JOC■ To construct, alter, repair, add to, subtract
from, improve, move, wreck or demolish any building, structure, facility, roadway, excavation – any part thereof
■ Perform work in connection with improvements to roofing systems, HVAC units, utility services lines, meters, etc. on an as-needed basis
JOC■ JOC Contracts in place for:
UNM, NM State University,
Albuquerque Public Schools
Los Alamos Public Schools
■ CES has JOCs for all regions
NOTE:: All procurement rules apply!
Wage Rates, bonds, insurance, etc!
CONSTRUCTION
CONSTRUCTION
DBB – Design Bid Build 5-Phase Process
Programming - Schematic Design
Design Development
Construction Documents
Bidding & Negotiation
Construction Admin
CONSTRUCTION
Programming
Complex facilities may require “programming”, to identify goals, needs, and spaces to meet those needs, such as an educational facility.
CONSTRUCTION
Schematic Design√ Program review and verification√ Development of physical spaces and their relation to each other√ Problem solving√ Cost estimating√ Presentation – input – approval to
proceed
CONSTRUCTION
Design Development
√ Refinement of the layout
√ Early development of major systems
Structural, HVAC, Electrical, Materials
√ Value Engineering
What to include or delete for budget purposes
√ Outline Specifications
√ Refinement of Project cost estimates
CONSTRUCTION
Construction Documents
√ Fully detailed drawings and specifications for bidding purposes
√ Submitted to code & regulatory agencies having jurisdiction for review
Fire Marshal, Handicap, CID
√ Wage Determination
CONSTRUCTION
Regulatory Agencies
It is the Owner’s responsibility to submit plans to regulatory agencies, however, this is generally a service that the design professional provides on the Owner’s behalf.
Changes may be required prior to bidding based on regulatory review.
BID DOCUMENTS
√ Project Manual Consists of a bound book which
includes Project bidding requirements, general terms and conditions, Project Agreement /General Conditions, Supplementary Conditions
√ Project Plans/Drawings
BID DOCUMENTS
√ The Plans/Drawings and the Project Manual together are considered the
Contract Documents
BID DOCUMENTS
Bidding & Negotiating√ Contract documents are distributed to
interested partiesPlan Deposits/Design ProfessionalPlan Rooms
Minor suppliers & subcontractors√ Contractors are encouraged to ask for clarification or to submit requests for substitutions√ Addenda are “a fact of life!”
CONSTRUCTION BIDS
MAJOR MILESTONES
1 Legal Notice2 Pre-Bid Conference3 Bid Documents/Addenda4 Bid Opening/Bid Security5 Notice of Award/Execution of Contract6 Performance & Payment Bonds7 Subcontractor Listing Requirements8 Protests
CONSTRUCTION BIDS
9 Notice to Proceed
10 Progress Payments
11 Construction Change Orders
12 Delays/Extensions/Liquidated Damages
13 Substantial Completion
14 Project Close-out
15 Warranties
CONSTRUCTION BIDS
Legal Notice13-1-104 NMSA 1978
√ Minimum requirement is 10 days from date of advertisement to bid opening
√ Construction – DBB – Industry standard is 30 days from date of advertisement to bid opening
√ Re-bid time frame is often shortened
√ Must consider the schedule and complexity of the Project
CONSTRUCTION BIDS
Pre-Bid Conference√ May be Mandatory or not√ Opportunity to review Contract Documents and field questions√ May include a Site Visit√ Open discussions on how work to be performed if it is at a site that is occupied√ Hold Pre-Bid at same location bids are to
be received – no excuses for late bids!
CONSTRUCTION BIDSBid Documents/Addenda may include:a. Definitions & Termsb. Investigation of Site Conditionsc. Bidding Procedures – form/style of bidsd. Bid Securitye. Statutory Requirements
Resident Contractor’s PreferenceCID License Number & ClassificationPublic Works Registration (DOL#)NM Tax ID Number
f. Subcontractors Fair Practices Act
CONSTRUCTION BIDSg. Protestsh. Post-Bid Information
SubmittalsPlan DepositsExecution of ContractNotice to ProceedFailure to execute a ContractContractor’s Qualification Statement
CONSTRUCTION BIDSI. Other Instructions to Bidders
Exceeding the budgeted project funds – if within 10%, Owner may negotiate a lower bid/contract amount if there are no changes to the original project scope, terms or conditions!
CONSTRUCTION BIDS
Addenda
√ Bid Form must include area to acknowledge receipt of Addenda
√ May affect responsiveness to the Bid
√ Issuing Addenda within 48 Hrs of Bid
√ Postponement of Bid Opening
CONSTRUCTION BIDS
Bid Form
1. # of Days bid shall be accepted (45 Days)
2. Acknowledgment of Addenda
3. Alternates – Additive/Deductive & order taken
4. Unit Prices
5. Signatures & Business Information
6. Licenses, Registration Numbers
CONSTRUCTION BIDS
Bid Form
Licenses, Registration Numbers
Contractor License #(s) CID
Contractor Preference # GSD/SPD
WSD(DOL) Registration #
CONSTRUCTION BIDS
Attachments to the Bid Form
1. Bid Security with Agent’s Affidavit
2. Certificate of Insurance
3. Subcontractor Listing
4. Anti-Trust Claim Form
5. State W-9/Federal W-9
Bid Security 13-1-146. Requirement for bid security. Bid
security shall be required of bidders or offerors for construction contracts when the price is estimated by the procurement officer to exceed $25,000. Bid security in an amount equal to at least 5% of the amount of the bid shall be a bond provided by a surety company authorized to do business in this state, or the equivalent in cash, or otherwise supplied in a form satisfactory to the state agency or a local public body.13-1-147 Bid Security. Rejection of bids. Noncompliance by bidder requires bid be rejected. If bidder withdraws bid before award, no action taken.
Bid Security
The Bid Bond gaps the bridge between the Owner’s acceptance of the low Bid and the Contractor’s signing the Construction Contract.
The Bid Bond is a “promise” that the low bidder (Contractor) will sign the Construction Contract.
If the Bidder fails to honor the Bid, the Surety becomes liable to the Owner for the difference between the successful bid amount and the amount that the Owner may be required to pay the second low bidder, per the amount stated in the Bid Bond face amount.
Bid Security
Agent’s Affidavit
Form to be used by the Surety
Notarized document that verifies the Surety is the “duly appointed agent” for the bidder and that the bond was given to indemnify to state of NM in connection with the construction project, and that the Surety is licensed to do business in the state.
Certificate of Insurance
Accord Certificate of Liability Insurance
Limits of Liability set by statute:
Broker’s Name/Insured’s Name
General Liability
Automobile Liability
Excess Liability
Worker’s Comp
Other
NOTE: Check signature & date of expiration!
Subcontractor Listing
Subcontractor’s Fair Practices Act Public Works Contracts chapter of the Code 13-4-31 through 13-4-42 Written to prevent bid shopping and bid
peddling, to eliminate poor workmanship, and to promote fair competition among contractors and subcontractors, prevent loss of wages
Subcontractor Listing
13-4-34. Listing of subcontractors; requirements.
Bid forms must state the “listing threshold” or dollar amount which shall be $5,000 or ½ of 1% of the architect/engineer’s estimate of the total project cost, not including alternates, whichever is greater.
Bid documents that don’t include a threshold can cause postponement of the bid opening until the agency complies with this statute.
Subcontractor Listing
13-4-34. Listing of subcontractors; requirements.
All that is required on the listing form is the name and the city or county of the place of business of each subcontractor who will perform work or labor or render service, etc.
And the category of work to be performed. Bid submitted that fails to comply is non-
responsive and shall be accepted.
Anti-Trust Claim Form
Assignment of Antitrust Claims General contractor agrees that any and all claims
that Contractor may have or that may inure to the Contractor for overcharges resulting from antitrust violations as to goods, services, and materials purchased in connection with the Bid are hereby assigned to the State of NM, but only to the extent that such overcharges are passed on to the State. Contractor further agrees to require each of its subcontractors and suppliers to assign any and all such claims to the State as well. This may be done by a signature on the Subcontractor Listing Form.
CONSTRUCTION BONDS
13-4-148.1 Bonding of subcontractors.
A sub-contractor shall provide a performance and payment bond on a public works building project if the subcontractor’s contract for work to be performed o a project is $125,000 or more.
STATE W-9/FEDERAL W-9
Requirement verification of business information for construction payments.
CONSTRUCTION BIDS Bid Opening1 Late Bids cannot be accepted2 Bids are opened in public3 The Bids are read aloud, and recorded4 Items identified in reading the bid include
acknowledgement of addenda, bid bond, agent’s affidavit, insurance, subcontractor list, and that the bid is signed
5 Subcontractor list for the apparent low bidder will be of great interest and will be requested to be read aloud
6
CONSTRUCTION BIDS
13-1-108. Competitive sealed bids; award.A contract shall be awarded with reasonable promptness by written notice to the lowest responsible bidder. Competitive sealed bid contracts shall require that the bid amount exclude the applicable state GRT or applicable local option tax but that the contracting agency shall be required to pay the applicable tax including any increase through the life on the contract. Taxes shall be shown as a separate amount on each billing or request for payment.
CONSTRUCTION BIDS
Notice of Intent to Award
Alerts the apparent low bidder to apply for the Building Permit
Execution of Contract
1 Notice of Award
2 Subcontractors List, Anti-Trust Claims
3 Performance & Payment Bonds
4 Certificate of Insurance
Performance & Payment Bonds
13-4-18 Construction contract performance and payment bonds.
When contract awarded in excess of $25,000, the following bonds or security shall be delivered to the state agency or local public body and shall become binding on the parties. Failure to deliver security shall result in rejection of the Bid and calling in the Bid Security/Bond.
Performance & Payment Bonds
13-4-18 Construction contract performance and payment bonds.
Bonds must be executed by a surety company authorized to do business in this state and said surety to be approved in federal circular 570 as published by the US treasury dept. or state board of finance or local governing authority, in an amount equal to 100% of the price specified in the contract
Performance & Payment Bonds
Bonds in General
Surety investigates financials/track record
Bonds protect Owner against damages
Tri-party agreement
Surety
Contractor (Principal)
Obligee (Owner, Lender, or General Contractor)
Cost of bonds included in Contract $
Performance & Payment Bonds
Performance Bond - Discussion
Owner is now faced with the risk that the Contractor cannot or will not complete performance in the manner specified by the Contract. Under the Performance Bond, the Surety issuing the bond stands side by side with the Contractor to assume the obligations & responsibilities of the Owner for performance of the terms of the Contractor.
Performance & Payment Bonds Performance Bond - Discussion
If the Contractor defaults, the Surety traditionally has several options under the terms of the bond. These include1. Obtaining a new Contractor at the Surety’s expense, but subject to the payment obligations of the Owner under the bonded contract2. Taking over the construction of the project or the
portion covered by the bonded contract3. Financing the Contractor so that he is able to complete the work4. Paying the Owner the amount required to complete the work, again subject always to the face amount of the bond.
Performance & Payment Bonds
Payment Bond – Discussion
Assuming that the contractor or subcontractor is able to adequately perform the physical or mechanical aspects of its work, there remains the risk that it will fail to make payment to its subs, laborers or suppliers resulting in lien claims against the project. The Payment Bond, sometimes called the labor and Materials Bond, protects the Owner from this risk and will pay the subs, suppliers, etc. for the services and materials used in the project.
Performance & Payment Bonds Other Forms of Surety Protection
1. The Personal Guaranty
●Financially able 3rd party/individual●Good only to the extent of the assets of the individual●Inconvenient & Uncertain – Owner must exercise due diligence with regards to the assets and the ability of the issuer to cause the Contractor to perform.●Value of 3rd party guaranty is limited by both the integrity and the issuer and their continuing financial liability.
CONSTRUCTION BIDS
Protests
13-1-172. Right to protest.
“Any bidder or offeror who is aggrieved in connection with a solicitation or award of contract may protest to the state purchasing agent or a central purchasing office. The protest shall be submitted in writing within 15 calendar days after knowledge of the facts or occurrences giving rise to the protest.”
CONSTRUCTION BIDS
13-1-173. Procurements after protest.
“In the event of a timely protest, the state purchasing agent or a central purchasing office shall not proceed further with the procurement unless the state purchasing agent or a central purchasing office makes a determination that the award of the contract is necessary to protect substantial interest of the state agency or a local public body.”
CONSTRUCTION BIDS
13-1-174. Authority to resolve protest.
“purchasing authorities or designee shall have the authority to take any action reasonable necessary to resolve a protest. This authority shall be exercised in accordance with regulations promulgated by the purchasing authorities to promulgate rules – but shall not include the authority to award money damages or attorney fees.”
CONSTRUCTION BIDS
13-4-175. Protest; determination.
“The purchasing authorities or a designee shall promptly issue a determination relating to the protest. The determination shall
a. state the reasons for the action taken
b. inform the protestant of the right to judicial review of the determination”
CONSTRUCTION BIDS
13-4-176. Protest; notice of determination.
“A copy of the determination shall promptly be mailed to the protestant and other bidders or offerors involved in the procurement.”
CONSTRUCTION BIDSNotice to Proceed
1 Occurs once the contract and all contract documents are fully executed and in order.
2 Notifies Contractor to begin work within 10 days of Notice to Proceed.
3 Verifies the number of days to completion of the project unless modified by Change Order.
4 Spells out any other conditions the Owner places on the contract, such as “all paperwork must reference the project number, name, etc.”
CONSTRUCTION BIDS
Project Budget/Re-Bid/Negotiation13-1-105. Competitive sealed bids; receipt and
acceptance of bids.If the lowest responsible bid has otherwise qualified and if there is no change in the original terms and conditions, the lowest bidder may negotiate with the purchaser for a lower total bid in order to avoid rejection of all bids for the reason that the lowest bid was up to 10% higher than budgeted project funds. Such negotiation shall not be allowed if the lowest bid was more than 10% over budgeted project funds.
CONSTRUCTION BIDS
Project Budget/Re-Bid/Negotiation
13-1-106. Competitive sealed bids; correction or withdrawal of bids. A bid containing a mistake discovered before bid opening may be modified or withdrawn b a bidder prior to the bid opening by delivering written or telegraphic notice to the location bids are being received. No modifications are allowed after bid opening.
CONSTRUCTION BIDS
Project Budget/Re-Bid/Negotiation13-1-106. Competitive sealed bids; correction or
withdrawal of bids. A low bidder alleging a material mistake of fact which makes his bid non-responsive may be permitted to withdraw its bid if:
1) The mistake is clearly evident on the face of the bid documents; or
2) The bidder submits evidence which clearly and convincingly demonstrates that a mistake was made.Any discussion to permit or deny withdrawal of a bid shall be supported by a determination setting forth the grounds for the decision.
CONSTRUCTION BIDS
Project Budget/Re-Bid/Negotiation
13-1-131. Rejection or cancellation of bids or requests for proposals; negotiations.
An ITB, RFP or any other solicitation may be canceled or any and all bids or RFP’s may be rejected in whole or in part when it is n the best interest of the state agency or a a local public body. A determination containing the reasons for the cancellation shall be made a part of the procurement file.
CONSTRUCTION BIDS
Project Budget/Re-Bid/Negotiation
13-1-131. Rejection or cancellation of bids or requests for proposals; negotiations.
If no bids are received or if all bids are rejected, then new ITB shall be requested. If upon re-bidding the bids are unacceptable or no bids were received, you may purchase the property, construction or services in the open market at the best obtainable price.
CONSTRUCTION BIDS
Project Budget/Re-Bid/Negotiation
13-1-132. Irregularities in bids or proposals.
You may waive technical irregularities in the form of the bid or proposal of the low bidder or offeror which do not alter the price, quality or quantity of the services, construction or items of tangible personal property bid or offered.
CONSTRUCTION BIDS
Project Budget/Re-Bid/Negotiation13-1-133. Responsibility of bidders and offerors.
If a bidder or offeror who otherwise would have been awarded a contract is found NOT to be a responsible bidder or offeror, setting forth the basis of the finding, shall be prepared by the procurement official. The unreasonable failure of a bidder or offeror to promptly supply information in connection with an inquiry with respect to responsibility is grounds for a determination that the bidder or offeror is not a responsible bidder or offeror.
CONSTRUCTION
Progress Payments
Before the first request for payment, Contractor submits a “Schedule of Values” to the Design Professional.
Allocates the Contract Sum to various portions of the Work (Site, Electrical, HVAC, etc.)
GRT added as a line item to the Schedule of Values
CONSTRUCTION
Progress Payments
Application/Certificate for Payment – AIA Document
- Invoice to be submitted by 25th of the month to DP for review
- DP verifies request for payment with Owner and Project Superintendent by means of a “walk through” on the Project
-DP signs request and forwards to Owner for payment
-Invoice to Owner by the 10th of the month (to be paid not later than 21 days following the end of the period covered by the Application for Payment)
Changes in the Work
“Construction is not a perfect science”. Things happen, changes occur – either by omission, unforeseen circumstances, or requests for change by the Owner”.
“Changes may include additive or deductive costs to the Contract Sum, or changes in the Contract time”.
“Documentation (proposals, breakdowns, etc.) must accompany the Change Request”.
“Once approved, the Request becomes a Change Order and must be signed by the Owner, the Design Professional and the Contractor”.
Delays/Time Extensions
Justifiable Delays/Time Extensions to the Work
1. May be caused by the Owner or Design Professional
2. Subcontractors/labor disputes
3. Delays in deliveries
4. Un-controllable circumstances (weather)
5. Unavoidable casualties (war)
Liquidated Damages
Contract Time is reasonable for completion of the Work/Project with consideration to weather and reasonable delay in deliveries
Assessed if Contractor neglects, fails, or refuses to honor Contract Time
Contractor pays the Owner for such delays, though amount is difficult to ascertain
May be deducted from Payments Final accounting is determined at Substantial
Completion
Substantial Completion
Contractor notifies Owner project is complete Design Professional prepares a formal
“Certificate of Substantial Completion” Includes a list of defects for correction (Punch
List) that are noted in a “walk through” of the Project
If Project is acceptable, Certificate is signed by all parties (Owner, DP, Contractor)
Substantial Completion Some deficiencies may not be apparent at the “walk through”
These items may be subject to the same warranties/repair remedies as the rest of the Project.“If the roof is not leaking at walk through because its sunny, the roof is still guaranteed per the Project requirements (warranties).
NOTE: Certificate of Completion Form shall stipulate a time frame adequate to complete the Punch List deficiencies
This can be a very slow process, as the subcontractors/trades have moved on to another project.
Close-Out of Project
Once all deficiencies are corrected, the Project is ready to be “closed out”.
Once closed out – the Contractor may apply for Final Payment
Typical Close-out Check List prior to Contractor’s submittal of Final Payment Request includes:
Close-Out of Project
Certificate of Substantial CompletionKeys turned over to OwnerFinal Walk Through (Punch List complete)Utilities turned over to Owner, Contractor’s
portion paidOperations & Maintenance Instructions
completedOperations & Maintenance Manuals turned
over
Close-Out of Project
Test Adjust Balance Report completedWarranties: (From date of Substantial
Completion)Metal Roof at Portal – 20 year finishMetal Roof at Portal – 2 year performanceBuilt-up Roof at Bldg – 2 year product &
workmanshipHardware Closures - 10 yearsWood Doors - Life of the building
Close-Out of Project
Permit Copies:
Certificate of Occupancy
As-Built documents submitted to DP
Release of Liens
Consent of Surety
Close-Out of Project
Warranties – are covered by contract law. A warranty is a “promise” by a party to a contract to do a particular thing. Most often warranties are express promises, made either in writing or orally. The most common warranties are in construction contracts to build in accordance with the plans and specs, and to guarantee the integrity of the work for a specified period of time after the completion of the project.
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