PROCEDURES FOR
SELECTING THE
CONTRACTOR
SELECTION PROCEDURES
AND QUALIFICATIONS
• The owner, typically assisted by the designer,
formulates a procedure to attract and evaluate
interested contractors.
• This procedure may be informal or highly
structured, depending on the size and complexity
of the project and owner’s organization.
• Private sector owners may award contracts on the
basis of prices offered informally (even orally).
• Most public agencies are required by law to use
competitive bidding.
SELECTION PROCEDURES AND
QUALIFICATIONS (cont.)
• The first step in the selection procedure is to invite
contractors to submit information about their
qualifications in the form of a statement of
qualifications (SOQ). Invitation can be public notice
or private invitation.
• In general, competitive bidding for public projects
requires the following qualifications of contractors
submitting bids:
– Valid state and local license(s) to perform the work.
– Proof of financial capability to enter into contract, as
evidenced by the ability to supply bid and performance
bonds.
SELECTION PROCEDURES AND
QUALIFICATIONS (cont.)
• The following is a general checklist of prequalification information that may be requested by
the owner:
– Constructor name, location, license, and corporate
structure
– Business data: financial information, bonding
capacity, bank references
– Construction experience: projects constructed or
under construction, size, type, performance on
schedule, and budget
– Work force on contractor payroll vs. subcontracting
• Pre-qualification information checklist
(cont.)
– Equipment owned vs. rentals
– Safety records: written program, actual
experience
– Quality control: written program
– Resumes of key executive and supervisory staff
– Current work load: remaining bonding capacity
– Personnel to be assigned to key positions of
management and field supervision
– Performance of completed project references
– Record of litigation
SELECTION PROCEDURES AND
QUALIFICATIONS (cont.)
• AGC has prepared a preprinted form, “Construction
Contractor’s Qualification Statement for Engineered
Construction” (AGC Doc. 220), for use as a suggested
generic pre-qualification statement or a contractspecific qualification statement.
• In examining and evaluating the information
submitted, the owner may make independent checks
on the contractor’s credit standing, visit projects
completed, interview owners and operators,
investigate safety records, and review other indicators
of performance capability.
CONTRACTOR QUALIFICATIONS
• Private owners may choose the contractor that
they consider the best qualified. The owner may
use the qualification information to develop a
“short list” of pre-qualified contractors who are
asked to:
– Bid competitively for the work on a unit-price or lump
sum basis.
– Present priced proposals for negotiation of a contract on
mutually acceptable terms.
• Public owners may use the qualification
information to select a short list bidders.
SELECTION BY
COMPETITIVE BIDDING
• Two ingredients for true price competition bidding
are:
– Clear, concise set of construction plans, specifications,
other proposed contract documents (Specify the product
to be delivered)
– Defined procedure for the bidding award process
(Provide a systematic approach)
• The bidding procedure protects both the owner
and the bidders by providing a systematic
approach to bidding and awarding the contract.
Role of Designer
• Designer’s degree of involvement in the bidding
process depends on the agreement for professional
services with the owner. In a typical arrangement,
the designer:
– Prepares drawings, specifications, bidding documents,
and estimates of probable costs for the review and
approval of the owner.
– Assists the owner in obtaining bids or priced proposals
for each contract to be awarded.
– Assists the owner in evaluating bids or proposals and in
awarding contracts.
Competitive Bidding for Public Works
• Competitive bidding is usually mandated by law or
agency regulations for federal, state and local
government projects.
• Beyond the general mandate, there are numerous
specific rules and criteria that are defined by the set of
documents issued to prospective bidders. These
documents generally include:
– Bidding documents that apply to the bidding process (e.g.
invitation to bid, instruction to bidders, information for
bidders, and bid forms).
– Contract documents specify contractor’s performance (e.g.
owner/contractor agreement, performance and payment
bonds, the bid or proposal, general conditions, drawings,
specifications, supplementary conditions, addenda and
change or extra work orders)
Owner’s Bidding Procedures for
Public Works
• The procedures required to solicit and inform
bidders, to receive and analyze bids, and to award
contracts under a competitive bidding system
include specific actions
– prior to the bid opening,
– during the bid opening process,
– And after bid opening.
• These activities are conducted by the owner,
assisted by designer, legal counsel and other
advisers.
See pages 126 – 128 (ASCE Manual)
Competitive Bidding for Private
Work
• The private sector owner may elect to follow
essentially the same procedures in securing
competitive bids as has been outlined for the
public sector.
• The owner may invite a broad spectrum of the
construction industry to participate, or may limit
participation to select bidders list chosen by prequalification.
• In either case, the owner and bidders rely on
defined bidding and contract documents.
(generally prepared by the designer)
SELECTION PROCEDURES FOR
COMPETITIVE NEGOTIATED
CONTRACTS
• Where structured price bidding may not be
appropriate, the owner first compares the
qualifications submitted by interested contractors
then selects the contractor best qualified for the
project, according to established criteria, and
finally negotiates a contract for project
construction with that firm or person.
• This approach generally results in some form of
reimbursable cost-plus-fee contract, although
negotiated lump sum or unit-price arrangements
are not precluded.
SELECTION PROCEDURES FOR
COMPETITIVE NEGOTIATED
CONTRACTS (cont.)
• If competition more directly related to construction or
design-build services is desired, the owner selects a
list of contractors on the basis of qualification
analysis.
• The owner then solicits proposals from contractors on
the list to address certain topics defined by the owner.
(similar to the previously covered contractor
qualifications)
• With this information available, the owner makes an
evaluation of the organizational and cost elements of
the work and negotiates a contract with the contractor
judged to have the best overall proposal.
SELECTION PROCEDURES FOR
NONCOMPETITIVE NEGOTIATED
CONTRACTS
• Situations where the owner may select a specific contractor
and negotiate the contract include the following:
– The owner may choose the contractor based on his/her
performance on work previously done for the owner.
– The contractor may have unique qualifications for the work
to be accomplished
– The contractor is already working at the site
– The urgency of the situation requires immediate action
• In the case of sole source award of a contract by a public
agency, the contractor may have unique characteristics.
(e.g. successful relationship with the owner, specialized
expertise, immediate availability for handling emergency)