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CE 463A-Advance Construction Methods & Equipment
Module 2 - The Bid Package Preparation
(Reference: Construction Management 4th Ed by DW Halpin & BA Senior}
Lecturer:
Edmar E. Rosales
M Eng, ACPE, LM ASEP, LM PICE, M ASCE, M PMI, PMP
Civil - Structural Engineer & Project Management Professional
The Bid Package Preparation
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The Bid Package Preparation
Establishing the Need
Feasibility study
1. Commercial-market analysis and profitability.
2. Public & community related service projects-does not typically involves profit.
Improving the quality of services and societal needs.
Formal Need Evaluation
1. Cost/benefit analysis- for commercial or profit-based projects. comparison of
estimated cost of the project against the expected revenues.
2. Graphical representation (sketches, 3D Perspective, Building Information Model-
BIM)
3. Cost estimate based on conceptual-level information available
Discussion About the Tangible & Intangible benefits.
The Bid Package Preparation
Conceptual Drawings & Estimates
Conceptual documentation to potential funding sources (banks & investors).
Cost benefit analysis
Architect’s renderings, layout drawings
3D Computer models & BIM
Present and future cost
Preliminary & Final or Detail Design
Notice to Bidders – The document announcing to prospective bidders that design
documents are available for consideration & that owner is ready to receive bids.
Contains information regarding the general type & size of the project, the availability
of plans & specifications for review, and the time, place, and date of bid opening.
For sample of Notice to Bidder see page 44 of reference book or visit web site:
[Link]
CONCRETE%20WORK%20(1-21-2021).pdf
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The Bid Package Preparation
Difference Between Notice to Bidders and Invitation to Bids
Notice to Bidders: This is a more general announcement to potential bidders
informing them about an upcoming bidding opportunity. It serves to catch the
attention of a broad audience and is often published in various public forums such
as newspapers, official websites, and bulletin boards. It typically includes basic
information like the project name, a brief description, and where interested parties
can find more details.
Invitation to Bids (ITB): This is a more formal and detailed document sent to pre-
qualified bidders or those who express interest after seeing the notice to bidders.
The ITB includes comprehensive information about the project, such as detailed
specifications, bid submission requirements, deadlines, and selection criteria. It’s
essentially the blueprint for what the bidding process will involve and what is
expected from the bidders.
The Bid Package Preparation
Difference Between Notice to Bidders and Invitation to Bids in the Philippines
In the Philippines, the terms "Notice to Bidders" and "Invitation to Bids" are used
within the context of the government procurement process, governed by Republic Act
No. 9184 or the Government Procurement Reform Act.
Notice to Bidders: This refers to a public announcement that informs potential
bidders about an upcoming procurement opportunity. These notices are published
on platforms like the Philippine Government Electronic Procurement System
(PhilGEPS) to ensure wide dissemination. The notice typically provides essential
information such as the procurement project name, brief description, and
instructions on where to obtain more detailed information or bid documents.
Invitation to Bids (ITB): This is a formal document issued to pre-qualified bidders or
those who respond to the Notice to Bidders. The ITB includes detailed information
about the procurement project, such as technical specifications, terms of reference,
bid submission guidelines, deadlines, and selection criteria. It serves as the main
guide for bidders to prepare and submit their proposals properly
The above documents are pivotal in ensuring transparency, fairness, and competition
in the procurement process in the Philippines.
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The Bid Package Preparation
Bid Package-documents available to the contractor on which he must make a
decision to bid or not to bid.
Plans
Technical specifications
Proposal form – indicates the contractor’s desire to perform the work and the
price at which the project will be constructed.
General conditions-common to all construction contracts
Special or Particular conditions-pertains to procedures to be used that are unique
to a given project.
Price-lump sum or unit-price figures
General Conditions - standard set of stipulations and established procedures
regarding contract administration and the relationships between parties involved.
The Bid Package Preparation
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The Bid Package Preparation
Supplementary or Particular Conditions - The aspects of the contractual
relationships which are peculiar or unique to a given project.
The Bid Package Preparation
Examples: Duration of the project, additional instructions regarding start of work,
owner-procured materials, mandatory wage rates in the area, format of required
project progress reports, and the amount of liquidated damages.
Types
Modifications to the basic articles of the general conditions in a form of additions,
deletions, or substitutions
Additional articles of contractual-legal nature that maybe desirable or necessary
for a particular project
Technical Specifications - the description of the technical requirements of the
project. Standards of workmanship, equipment, materials and the required quality
are defined in the technical specifications.
Addendum/Addenda - Any changes in detail, additions, corrections, and contract
conditions that arise before bids are opened that are intended to become part of
the bid package and the basis for bidding.
Change orders – modifications to the original contract.
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The Bid Package Preparation
Estimates & Decision to Bid
Estimating - the process of looking into the future and trying to predict project cost
and various resource requirements
Predictions are based on past experiences. Accuracy of the result is based on the
skill of the estimator and the accuracy and suitability of the method by which the
past experiences are recorded.
Quantity takeoff/quantity surveying-the process of determining the required
material quantities on the job.
Direct cost-cost of performing the construction tasks/activities
Examples: direct labor, direct materials
Indirect cost-cost that cannot be directly linked to a specific construction activity
Examples: supervision cost, quality control costs, insurance, depreciation, utilities
BID Price = Direct Cost + Indirect Cost + Management & Overhead +
Contingencies + Profit
The Bid Package Preparation
Prequalification- the submission of documents by the contractor to ascertain its
expertise and capability to successfully complete the work. Announced in the
instruction to bidders.
Subcontractor & Vendor Quotations/Contracts - quotations and contracts of
specialty subcontractors.
Bond - a three-party instrument establishing a three-party relationship. Allows one
party to protect itself against default in relationship with the second party.
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The Bid Package Preparation
Bid Security - required by the owner to offset the harm or damage occurring in the
event that the firm selected fails to begin the project as directed.
Performance Bond- a bond issued by surety guaranteeing the fulfilment of a
particular contract.
Issued to the contractor to guarantee the owner that the contract work will be
completed and that it will comply with the specifications. Protects the owner against
default on the contractor’s part in completing the project in accordance with the
contract documents.
Payment Bond-issued to guarantee the owner protection against any liens or
charges against the project that are unpaid as a result of contractor’s default.
Protects the owner against failure on the part of the prime contractor to pay all
subcontractors or vendors having outstanding charges against the project.
Casher’s check with specified amount – an alternative to bid bond
Cost & requirements for Bonds - service charge
Net Quick Assets – Contractor’s assets that can be quickly converted to cash or
negotiable instruments to cover cost or defaults.
Research / Assignment: Review Questions & Exercises(page 47).
2.1 , 2.2, 2.3, 2.4, 2.5, 2.6, 2.8, 2.9, 2.11