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WMF Builds…INSIGHTS #8   |   Appropriate Bidding Strategy

by Charles P. Haynes

Developing an appropriate bidding strategy requires consideration of many factors that can influence the success of your project.

The easy answer to the question “Mr. Owner, how would you like to bid your project?” is let everyone bid so that the market decides the best competitive pricing. However, best pricing does not always equate to best value. And while this answer is the correct one on many occasions and required in some instances, it might not be the best for every situation.

As you read this I can see that you are scratching your head “Why?”. First and foremost in the decision process is the statutes that define bidding law in each jurisdiction. Typically in the Public sector open bidding is a requirement. The Private sector on the other hand, has the option of building a “by invitation only” bidders list. A number of governmental agencies have implemented best value bidding as a way to ensure that the contractor selected has the right mix of qualifications and pricing to satisfy the construction need.

There are a host of reasons an Owner may want to limit or expand the bidders list. It is prudent for the Owner to ask the professional to provide them with a list of qualified contractors. Qualified in this instance means those that have the resources to tackle the specific scope of the project, and have a proven track record of doing so. It is also incumbent on the professional to ask the Owner if there are any contractors they would like to include on the bidders list. Typically this will include contractors that have performed favorably for the Owner in the past. Although, in some instances the reason may not be apparent to the professional.

 

One such instance is that the Owner values keeping the dollars local and would like to include local contractors. There are ways to accomplish this. Often this is the case with public agencies…think school districts, governmental agencies, not-for profits, etc. In rural communities, many times the project is too large for local contractors to undertake. This takes a creative bidding strategy to ensure the inclusion of small local contractors in the bidding process.

For example, a rural school district will be bidding a new $40,000,000 high school. This will attract contractors from upwards of 2 hours away and more. So how does the District enable its small local contractors (read taxpayers) to bid the project? By breaking up the project into bid packages that allow the locals to participate in the bidding process. This could mean a separate drywall bid package for each of the three floors. It could mean breaking up the painting package into an interior painting package and an exterior painting package.

There are a number of ways to accomplish local participation, but it all begins with communication. And this communication must occur between the professional and the Owner early in the process so that the professional can start to engage the local contracting community. In summation, the appropriate bidding strategy involves many factors as defined by the Owner with guidance from the professional. This part of the construction process should not be a given for any project and should be addressed specific to the wants and needs of each and every project.

For more information please see “The Guild Master” white paper

For More Information on Integrated Project Delivery Please Contact
Dick Fox  |  814.490.6096  |  dfox@wmf-inc.com
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