Greening Your Building: Contract Bidding and Negotiating

The third in our Greening Your Building article series, we go over how to navigate the bidding process to find a contractor. First we will explain the various project delivery methods. Then we will discuss the different types of bidding and best practices. If you don’t think you need to initiate a bidding invitation, you might find a contractor you trust and simply negotiate.

Project Methods

There are four ways to deliver a project, and depending on your budget and the complexity of the project scope, you might prefer one or the other.

Design-Bid-Build: Most traditional method of handling construction projects. The architect or designer are hired independently of the contractor that handles the construction.

Construction Management at Risk: Like the Design-Bid-Build method where the contractor and the architect are hired separately, but the contractor starts working on the project before the design phase begins. They can even at times help choose the architect.

Design-Build: An increasingly popular method in which the design and construction of the project are handled by the same contractor, and both phases are included in the price of the completed project. This method can often offer the best value and expedite the building timeline.

Integrated Project Delivery: A system where the architect, contractor, and owner are set up as a team that shares the risks equally, usually with a legally binding contract. It is the newest method of delivery, and is probably the most efficient at reducing problems and issues.

Different Methods of Bidding

How much time you have, or how complex your project is, will determine which method of bidding you want to pursue. There are several options for selecting a bid, and many owners use secure online bidding sites to find the best contractor. Here are a few methods that are commonly used to select construction bids:

Pre-Qualified Bidding: This is most common for green building projects since owners often seek those with green building certifications or past experience. The selection pool is smaller and easier to manage, but also limited by market fluctuations and less competition.  

Competitive Bidding: When bidding is open to all contractors. The selection pool is much larger and therefore has more competitive bid options. It can take much longer, and doesn’t always offer the best value.

Design-Build Bidding: This is when the design firm makes a bid on the project before the design phase even starts. This gives a more accurate timeline and the owner has more control over the cost of the project.

Bidding Best Practices

Have realistic expectations: Communication is key in establishing realistic expectations about the budget and timeline of the project. If you want the project to be finished quickly, expect things to get expensive. In the same way understand that if you are getting a great deal on price the project timeline might move much slower than you would prefer.

Clarity the details in the design phase: Having well defined designs and objectives to offer contractors that are bidding will help them give you a more accurate representation of what they can offer you, and at what price.

Understand the scope and project requirements: This is ultimately why many projects are bringing the contractor into the fold as early as the design phase. The better the contractor understands the scope of the project from the earliest stages, the faster they can get to work and deliver on time.

Assess contractor qualifications thoroughly: Everything from the size of their staff to the certifications they hold will help you determine whether or not they can handle the project as promised. Get recommendations and interview past clients before offering the job.

Negotiating

Sometimes the owner may already have a working relationship with a contractor and will instead enter into negotiations for a project. This work if the contractor(s) have specialized skills or experience working on similar projects in the past. For example, if a landscaping contractor that have installed successful green roof projects in your local climate, you might simply negotiate with them to manage your green roof instead of taking the time an effort to issue an invitation to bid. This can save time but you don’t always get the best price and it can backfire if contracts are not thorough in protecting both parties throughout the project.

Selecting a contractor can be a stressful and intensive process, but luckily there are many best practices in reviewing and selecting a contractor you can trust to get the job done. Need help in overseeing and selecting your green building project contractors? Sow Green can oversee that for you, just contact us and we can offer a free consultation.

Sources:

https://www.smartsheet.com/construction-bidding