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Construction Contracting

Construction Contracting. 2013 Providers Conference Presented By Todd Macalady Assistant Professor UAF AK TTAP. The Next Step. Construction Project Development Phases of a construction project Preliminary planning and feasibility studies Preliminary engineering and design

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Construction Contracting

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  1. Construction Contracting 2013 Providers Conference Presented By Todd Macalady Assistant Professor UAF AK TTAP

  2. The Next Step • Construction Project Development • Phases of a construction project • Preliminary planning and feasibility studies • Preliminary engineering and design • Final Design Completion • Procurement • Construction • Closeout

  3. Construction Bid Proposals • Contains the cost estimate • Includes all of the bid forms • Required to bid competitively if government projects • Private owners could require bidders to prequalify before bidding on a project

  4. Instructions to Bidders • Provides procedures to follow in order to bid on a project • Provides detailed instructions on the requirements for the bid documents, bid submission, project information, and information on how to prepare the bid documents

  5. The Bid Submission Process • Owner issues bid documents (usually done by the owner’s representative) • Contractors prepare their bid documents • The bids are submitted at the location indicated in the bid instructions • Public or private bid openings • Contractors have to sign noncollusion statement that they did not work with other contractors during the bid process

  6. Bid Advertisements Include Information on: • The project • Who is building it • The A/E • The date of issue • A description of the work • The basis of the bids • The time of completion • Bid opening information • Where to locate the bid documents • Prequalification requirements • Statement on the right to reject any and all bids • References to any government laws and regulations that pertain to the project

  7. Bid Shopping • Occurs when the prime contractor asks the subcontractors to lower their bids after a contract has been awarded or uses different subcontractors than the ones that submitted bids • Results in additional profit to the prime contractor • Illegal • Could be prevented by requiring the prime contractor to provide a list of the subcontractors with the bid

  8. Proposal Evaluation • Evaluation and selection of contractor • Bids are either responsive or non-responsive • Issue Intent to Award • Prepare contract documents

  9. Contracts • Set Forth The Terms And Conditions Of Agreements • Protect Parties To A Contract • Protect Parties When There Is A Default • Help Parties To Determine Who Is In Breach Of Contract

  10. The Need to understand Contracts • The Legal Terminology • The Basics Of Contact Law • Whether A Contract Addresses The Requirements Of The Engineering And Construction Project • Whether The Contract Favors An Engineer Or The Constructor To The Detriment Of The Owner

  11. The Main Components of Construction Contracts • General conditions • Supplementary conditions • Specifications • Contract drawings (plans) • Critical path method schedules

  12. Components of Engineering Contracts • Articles in contracts include: • Services to be provided • Owner’s responsibilities • Schedule for rendering services • Invoices and payment information • General considerations

  13. Components of Engineering Contracts • Articles in engineering contracts include: • Definitions • Exhibits and special provisions • Engineer’s services • Additional services • Construction cost limit • Dispute resolution • Allocation of risks

  14. Commercially Available Construction and Engineering Contracts Are Available Through • The American Institute Of Architects (AIA) • The Joint Engineering Contract Documents Committee (EJCDC) • The Associated General Contractors (AGC) • Other Professional And Trade Organizations • Owner Developed Contracts

  15. Difficulties in Contracts Arise Due to Interpretation which is Caused by: • Vague Terms • Unclear Contract Clauses • Lack Of Familiarity With Contracts

  16. Contract Administration • Act Of Determining Whether The Contractor Is Meeting The Construction Contract Requirements • Determining Whether The Contract Is Being Built According To The Contract, Plans, And Specifications

  17. Changes to Contracts • Definition of Changes • Owner requested changes • Inadequate design • Material unavailability • Budget changes • Natural disasters

  18. Five Types of Potential Alterations to Construction Contracts • Changes • Extras • Deletions • Modifications • Waivers

  19. Change Orders • Document in writing the terms agreed to by both the Owner and the contractor for altering the scope of work • Provide written instructions for contractors and they are signed by owners, the A/E, and the contractor • For projects with bonds they are signed by the surety

  20. Change orders are also used to correct construction documents if there are errors, omissions, or discrepancies • Types of Items that Require Change Orders: • Additions or deletions of work • Unforeseen site conditions • Changes in market conditions

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