The bidding procedure is an incredibly crucial part of a construction project. construction bidding is the procedure of submitting a tender by the contractor to the client as a proposal to conduct or manage a particular construction project. This enables firms and companies to hire contractors.
Also Read: What is a Tender in Construction?
Some of the important features of construction bidding are briefly explained below.
The basic construction bidding process involves:
The three major decisions in the construction bidding process are:
There are four traditional project delivery methods. They are:
The four major project delivery systems mentioned above share the common goal of helping the owners built new structures on time and on budget. These methods also ensure standard and performance requirements.
In a DBB method, the owner hires a designer or an architect independently. This is the traditional method and is commonly employed for the construction of non-residential buildings, mainly under government projects. This is performed by the contractor who is managing the construction. Once the design is completed by the architect, bids are solicited from the contractor by the owner so that the designs can be executed.
Important advantages of DBB are:
Disadvantages of DBB are:
The CMAR approach is an alternative to the DBB approach that helps in reducing the costs. In this approach, design and construction are handled by different firms. Here the construction supervisor is involved in the project from the start of project, even before the design of the project. The CM can even help in choosing the architect for the project. Once this step is done, the project is moved forward by the CM and the architect. They work together during the design phase.
This method is mainly employed for complex projects. The CM is chosen by the owner on the basis of his or her experience and qualifications and not on the basis of the lowest price criterion. The bid of CM to the owner is a guaranteed maximum price (GMP). This cost represents the:
If by chance, the actual costs exceeds the GMP , the risk is on the CM. After the completion of the design, the construction manager solicits the bids from the contractors. If the undertaking is built below GMP, the savings received by the owner may be shared with the CM as per the agreement made between them. And this burden won’t be taken by the owner.
Advantages of CM at Risk Method are:
In DB Method, the owner offers the contract to a single entity that can handle both the design and construction. Here, one price covers both the phases of construction. This entity is called a design-builder or design-build contractor. In DB, the design-builders is accountable to the owner for all aspects of the project.
This is one of the newly developed undertakings delivery approaches. This approach employs, owner, architect and contractor as a team, and the risk is shared equally. The IPD approach is also called an Integrated team approach.
After the selection of the undertaking delivery approach, the next step is to bother about the procurement approach through which the construction services are obtained. Construction procurement is generally classified into:
In this method, the buyers and the contractors are awarded the contract based on price and performance. These records taken into consideration are past performance, robust management approach, qualifications of the staff and other specific factors.
In this method, the contactors are selected without any form of advertising or competitive bidding. A potential builder is chosen and negotiated with reference to the price and the technical requirements. This proposal is not opened publicly. The contractor who makes a favorable proposal is taken into consideration by the government.
In this procurement method, a single source procurement method. This is a non-competitive method that only uses a single provider who can fulfill all the requirements of the undertaking.
Competitive bidding with the lowest bidder is the principle behind the low bid procurement method. Government and public building entities are built as per this procurement method This is one of the traditional procurement methods.
The contract format that is presented in the construction bidding procedure must be carefully developed. The owner is supposed to suggest the type of contract he is willing to make. The type of contract developed determines how cost and the profit are covered.