Lecture 11 - 1 CVEN 349: Civil Engineering CVEN 349: Civil...

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Unformatted text preview: 1 CVEN 349: Civil Engineering CVEN 349: Civil Engineering Project Management Project Management LECTURE # 11 Fall 2009 Dr. Ivan Damnjanovic Review (Bid Packages) Review (Bid Packages) ¡ Bid package establishes legal requirements for the project – forms the basis for bidding ¡ Put together by A/E for the owne ¡ Put together by A/E for the owner ¡ Available (sometime for a fee) to the bidders ¡ Consists of: Proposal, Gen. Conditions, Spec. Conditions, Tech Specs, and addenda You get the bid package You get the bid package – what next? what next? ¡ A decision about whether or not to bid needs to be made. ¡ A bid requires ¡ A cost estimate (usually unit cost based on quantity take off) and statement of how the work will be accomplished ¡ Sometimes prequalification ¡ Usually a bid bond 2 Cost Estimation for Bidding Cost Estimation for Bidding ¡ Bid based on detailed cost estimate ¡ Comes from unit quant. take off based on design ¡ Needs to be accurate, or the contractor risks losing $$! ¡ Such a cost estimate costs money to do! ¡ Rule of Thumb: ( ) 0.25% Cost total bid price ≈ Example Example Bid Price Approx. Est. Cost $10,000 $25 (??) $100,000 $250 $1,000,000 $2,500 $10,000,000 $25,000 $100,000,000 $250,000 (??) Bid Est. Cost Continued Bid Est. Cost Continued ¡ Cost also incurred for a bid bond ¡ A contractor only gets a fraction of the contracts he/she bids on ¡ How can the contractor recover his/her bidding costs? Any ideas? ¡ A Common Solution: 3 Prequalification Prequalification ¡ If the work is complex and/or large-scale, owner may require prequalification of a bidder before accepting a bid ¡ Prequalification means that the owner agrees that the contractor is capable of doing the work ¡ Think of it as submitting the firm’s resume Prequalification Can Help Contractors Prequalification Can Help Contractors ¡ Only need to incur cost of bidding if they’re qualified ¡ Implies that the owner thinks they’re capable ¡ This in turn implies that their bid will be seriously considered Subcontractors/Vendors...
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This note was uploaded on 05/28/2010 for the course CVEN 349 taught by Professor Damjanovic during the Fall '09 term at Texas A&M.

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Lecture 11 - 1 CVEN 349: Civil Engineering CVEN 349: Civil...

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