How do you choose and award construction contracts?

In my role, selecting and awarding construction contracts involves a stringent process. First, I ensure a clear understanding of the project scope, laying out all specific requirements. Next, I invite tenders, thoroughly reviewing each for compliance with our standards. Price is a factor, but not the only one; experience, quality of work, and timelines are equally weighed. A site visit will also be conducted to assess capabilities. Finally, negotiations take place to refine details, and a contract is awarded. Throughout, transparency and fairness are key.

Majority of the time for commerical construction contractors, the delivery method is determined by the Owners prior to bid time as a majority of projects are design-bid-build or “hard bids”. As a general contractor, negotiated contracts with an owner/developer is preferred with design-build delivery method.

In addition to the insights shared, understanding the stakeholders needs, proper scoping and justification of a service as well as carrying out feasibility studies where possible, sets the foundation of clearly defining project terms, prepare bidding documentation and thus enable one to attract competent service providers.

A project delivery method is a system used by an agency or owner for organizing and financing design, construction, operations, and maintenance services for a structure or facility by entering into legal agreements with one or more entities or parties

Contract type is a term used to signify differences in contract structure or form, including compensation arrangements and amount of risk (either to the government or to the contractor). Federal government contracts are commonly divided into two main types, fixed-price and cost-reimbursement.

Well this most usually is chosen by the employer. During the tendering phase the Employer shall attach a contract draft with documents. The Contractor shall be well aware of the contract, read it very well, and take into consideration the type of contract and any risks that will be borne by the Contractor due to the terms. The type of contract can play a fatal role if not considered in pricing. A Lump Sum Contract impose a much higher risk to the Contractor than a Remeasured Contract, while a Cost Reimbursement Contract(Cost Plus) can be fatal to the Employer in case he doesn’t have the right tools and well trained staff to monitor the Contractor.

Recommending one Procurement Strategy over another is a KEY decision which can make or break your project. Therefore, you need to consider the following criteria carefully before advising your clients: 1. Speed of project delivery 2. Single point of responsibility 3. Cost certainty 4. Design quality and need to control it 5. Nature, size, and scale of the project 6. Project complexity 7. Flexibility to change 8. Scope certainty 9. Risk appetite of owner Selecting the wrong “Procurement Strategy” is an expensive error which will lead to Change Orders, cost overruns, schedule delays, claims and ultimately disputes between the project parties.

The procurement method refers to the process or approach an organization uses to procure goods, services, or work from external sources. It is the strategy or plan used by an organization to select suppliers or contractors and negotiate the terms of procurement for required goods, services, or work

Be sure you are comparing apples to apples. Qualify the partner's experience and verify they can deliver on what they've promised.

There is a further opportunity within this process to refine those allowance amounts and get a sight of the scope from a General Contractors perspective. Take the time to talk the scope through with your bidders, make time for mid/post bid interviews, and go back to the design team as and when needed to cement these costs into the contract and further reduce risks and ambiguity. The procurement process should not be fast tracked, it is essential to making the post contract process as smooth as possible.

The apparent low bidder is not always the actual low bidder. A complete analysis of the proposal is necessary to ensure it is "leveled" against the competition and the project scope. This assumes that all bidders have been pre-screened for acceptability regarding safety, quality and financial considerations.

Choosing or adjudicating a contract is governed by several aspects or criteria. I have been involved as a Contract Manager several of these. My number one priority is to adjudicate based on Safety performance. This gives me an indication of how the Contractor performs safety wise. Thereafter I want to see their claims record, this will tell me if they bid "lean" and then make up the balance by claiming. Obviously, one needs to look at cost or overall bid/tender to establish a baseline. Have a look at their plant & equipment as well as manpower ratio, as it will indicate whether they can perform the task.

This step is so important and often gets missed in the rush to get to the deal done once awarded. But having a risk tolerance mapped out with your construction lawyer that an operator, owner, or a contracts manager will help protect your company the same way a tight scope will. Use this contract playbook so the person leading the redlining efforts knows what is acceptable and what needs to be brought into balance. Use tips from “Contract Redlining Etiquette” to leverage comments effectively throughout the negotiation process to bring the contract to the balanced risk profile you need. Remember! It seems strange to pushback at first, but protecting your company matters, too!

Check your prime agreement for flow downs and make sure you comply with all those requirements when drafting subcontracts. (Subs check your prime before redlining!) Use the contract to get all your project set up information, including specific forms and details well in advance of the first pay app. Don’t delay any payments! Get dates in calendars right away. And your state’s version of notices to owners to protect your lien rights.

There is so much to the contract that applies to post-execution. Use the contract as your guide to doing business with your customer and maintain compliance throughout the project. When in doubt about anything, first ask, “what does the contract say?”

The basis for awarding a contract to a contractor mustn't necessarily be for the sake of cost. Several other reasons such as know how, project delivery, experience, capacity, scope, magnitude of the project, delivery period and the likes, are considerations that could determine who gets selected. So I will crown it all on "the need" of the sponsor/client/Stakeholders.