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Bidding Phase The final selection of project contractors rests with the client on private projects, or the lowest bidder in the case of public projects. While playing a role in both processes, the design professional rarely considers that role to be a source of risk. However, that risk exposure can be substantial. For private projects, the design professional is usually the entity that establishes the procedure for the receipt and review of bids. Moreover, the design professional usually leads the review process and makes “recommendations” to the client concerning the bids received and the bidders. The design professional may also take a leading role in negotiating with bidders. As a consequence, the client’s reliance upon the design professional during this phase is high, and clients often believe that the design professional is actually selecting the contractor. When one of those contractors fails to perform, the client may blame the design professional for having breached a duty owed to select a contractor who would faithfully perform and complete the project. Bid Review Risk exposure is controlled by the design professional by establishing in its contract with the client that it will advise and consult on the selection of the project contractors. It should be clearly established that the final selection of the contractor rests solely with the client. Similarly, the design professional can lessen the client’s reliance on its opinion by creating an objective bidder evaluation process prior to the establishment of a bid date. Finally, when making a recommendation to the client, that recommendation should include a disclaimer that it is based upon the bidder’s compliance with the bid requirements and project criteria and does not constitute a determination by the design professional that the recommended bidder will complete the project on time or budget. On public works projects the design professional’s risk exposure is as great as on private projects despite the set bid procedures that usually are attendant to public projects. A design professional who fails to develop a bid process in the construction documents that complies with the legislative requirements can expose itself to liability. Familiarization with public bid and evaluation requirements is important to avoiding contractor bid challenges and claims from the client arising from those challenges. If the design professional is responsible for receiving bidders’ insurance certificates and surety bonds, the design professional must be careful to verify the accuracy of each document. Many cases exist where the successful bidder provided falsified surety bonds and insurance certificates. Upon the development of claims related to the contractor’s performance of Work, the design professional has found itself named as defendant as a result of not performing due diligence to confirm the validity of the submitted bonds and insurance certificates. The design professional’s receipt of formal bid documents must include an undertaking to verify the validity of the documents. Clarifications During the bidding process questions and requests for clarifications regarding the design documents are often raised by prospective bidders. These questions and clarifications are typically raised verbally by bidders at mandatory pre-bid meetings or in direct telephone calls to the design professional. It is incumbent upon the design professional to log in each question and request for clarification received. It is more important for the design professional to document each response provided regardless of the affect it may have on the bidding process. The design professional’s response should be timely provided to all bidders. An addendum should be prepared and circulated for responses that alter significant portions of the bid documents. Many design professionals do not consider it to be necessary to circulate responses to questions and clarifications that do not require the issuance of an addendum. While the design professional has a clear understanding of the project, the design professional should not be making judgments concerning items that may affect a bidder’s thought process. It is better to issue the response and let the bidders determine whether it affects their thought process.
Subsequent to the selection of a contractor, an Award of Contract is issued. Unless identified in the construction documents as constituting a Notice to Proceed, the two notices are separate and distinct. There may exist times in which you want to lock up the contractor and its bid amount in contract, but withhold its ability to proceed with the work due to easements, permits or funding not being in place. Once a Notice to Proceed is issued the contract time commences. A contractor’s full access to the project site cannot be hindered without resulting in a claim by the contractor of interference, and a corresponding request for a change order extending the project time and monetary delay damages. Therefore, if the design professional is issuing the Award of Contract and Notice to Proceed, the undertaking of those activities should only be undertaken with the express written consent of the project client. Summary Bid phase services can represent significant risks for the design professional. Controlling those risks relates to the careful selection and implementation of the best bid procedures for the project. The design professional must exercise its duties and obligations in the bid process with all due diligence. The acceptance, review and recommendation of bids should be done with an eye toward the risk exposure each activity represents. |