Comparing Bidders - Consider 2

6m 51s

In this ARE 5.0 Construction and Evaluation Exam Prep course you will learn about the topics covered in the ARE 5.0 CE exam division. A complete and comprehensive curriculum, this course will touch on each of the NCARB objectives for the ARE 5.0 Construction and Evaluation Exam.

Instructor Mike Newman will discuss issues related to bidding and negotiation processes, support of the construction process, and evaluation of completed projects.

When you are done with this course, you will have a thorough understanding of the content covered in the ARE 5.0 Construction and Evaluation Exam including construction contract execution, construction support services, payment request processing, and project closeout. 

So as we're thinking about analyzing bids and bidders, clearly the place that the owner is coming from is going to be an important factor about how we're going to do that, what manner we're going to be analyzing it, what kinds of information we want to gather. Let's imagine a couple of different scenarios. Imagine we have a client and that client is a non-profit. Possibly the client is a Fortune 500 company. Maybe it's a single family. Maybe it's a school board. Each of those different clients would have a different set of issues by which they would make their decision over which bidder, what makes sense for them.

If you weren't matching, then it wouldn't really be a reasonable project. For example, we have a non-profit entity, and that non-profit entity is likely to be very cost-conscious in terms of how they would take in the information. They're going to be mostly focused on being efficient with their dollars, they're going to be mostly focused on making sure that the project is going to sort of work in the long-term for their needs, so not just upfront dollars but over a span of time.

They're going to have a very particular sort of viewpoint as they're looking out at the project, that idea of efficiency and the idea of being a caretaker of the money that they have. Non-profits will be mostly focused on just being efficient and well-run, that's what they're going to be really shooting for. But they also may be bringing a much stronger sense of connection to a community, or a much stronger sort of desire to be representative of a certain situation.

While they may be focused on the dollars, they also might really want to make sure that say, people from the community they're working in are hired in order to do the project. So how would you be able to choose one contractor over another, if that was an important consideration of that non-profit client? Would you put that into the bid package? Maybe it's part of the bid form, maybe there's something about hiring people, a certain percentage that are local folks, or maybe it's just part of the conversations that you would have with the various references that different bidders would give you, or maybe whatever, right.

You have to have a decision that this is an issue and that that issue would need to find its way into the analysis so that you could then be clear when you're giving that analysis to that entity, to that owner. By comparison, if we're thinking about maybe a Fortune 500 company, that company is probably going to be mostly focused on prestige issues, kind of the cost is going to be less of a straight-forward question and it's going to be mostly about providing a very high-quality, so it's very representative and efficient in its own way.

Different idea of efficiency than we might talk about with a non-profit. That would be an example where we would really want to make sure that the entities that we were talking to, the bidders we were talking to, had the ability to work at that scale, at that expectation level. It's not just the size of a project but it's also the ability to meet that quality level for that kind of an institution.

Then we start thinking about a single family, what would they want a bidder to be able to respond to? Well, with a single family project, where we're really working with a very particular set of people, what we're really looking for not just from the designer but also from the contractor, is a sense of empathy, is a sense of them understanding the situation that folks are in. That situation may be very cost-oriented, or it may be that they need to be able to live in the house while the house is under construction, or it may be that there's kids and they want to be able to show the construction process to the kids, and so the ability to be sort of flexible in that kind of situation, to be able to have people visiting the job site might be an important thing for those folks.

Just whatever it happens to be, they need to be empathetic to the process that the family is going through in order to help them get through this whole process, cuz it's such an ordeal to live in a house or to have your house being under construction.

If the contractor isn't being empathetic to that process, it's going to be a much more complicated, much more difficult, it's going to make things much more contentious, and so you're really looking for somebody who understands that and can handle that, whatever it happens to be, however it happens to play out. They can be understanding of that situation for that particular client. That's completely different from something like a public school board.

When we have the board, the board has a bunch of financial and legal restrictions that they have to live with, so there's a very complicated and strict process that everybody has to go through when they're working with a public entity like that. There are expectations, there are processes built into the tax code, there are processes built into the way that decisions get made. All of these different things are going to be qualitatively different for a public board, than they would be for any of these other, more private entities.

In fact, there may even be rules that say that they are not even allowed to choose a bidder, that the bidder has to be the low bid, or that the bidder has to be approved by some other group that they have a relationship with. There might be a process that's mandated by law about how they make their final set of decisions. So understanding what those issues are so that you can kind of gear those bids to be able to meet to that situation is really important.

You would not want to have put together a bid package that led you to a situation where you got the low bid from a company, from a contractor, that just couldn't handle the capacity of the project. They shouldn't be in there, they shouldn't be trying, because you may be forced to work with them if you just sort of accidentally let that happen. So you have to be really cognizant of the rules that would go along with something like a public entity, a public board.

Each of these different examples leads you to different ways of writing out the bid package, different ways of reviewing the references, different ways of talking to the general contractors themselves, in order to kind of find what sort of information that they would have, as well as talking to the clients and to the owners to really understand what their needs are. You're trying to find a way to sort of meld these issues together and get that best possible choice. This is your one chance to get it.

It's not going to be easier down the road to try to get rid of a contractor you don't like. It's going to be very difficult to do, so the time to do it is when you're choosing those bidders. That's why that bid package and that whole process of analysis becomes so important.

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From the course:
ARE 5.0 Construction & Evaluation Exam Prep Old Content

Duration: 10h 56m

Author: Mike Newman