- Buyout Meetings
- Review the Scope
- Prepare Buyout Notes
- Set up meetings with multiple subcontractors
- Meet with the highest subcontractor first
- Obtain pricing for complete scope
- Don't shop bids and no last looks. It is unethical.
- Award to low qualified subcontractor
- Call, not email, the #2 sub first
- Use meetings as a learning tool
- After selecting / shortlisting bidders through the Sub Bid Analysis process, set up buyout meetings with bidders.
- Note: some scopes may require detailed buyout meetings with multiple subcontractors to ensure bids are accurately reviewed. Others may be a quick phone call. (Know the project risks)
- Make sure the estimator and operations side for the bidding party are in attendance at this meeting.
- Bidder should bring any sequencing plans, detailed schedules, take-offs, assumptions, questions, RFI's, etc.
- Ensure the bidding party has received and reviewed the standard Terms and Conditions prior to the meeting. Go over the Terms and Conditions during the meeting again.
- Get the bidders talking. Don't be the one doing all the talking!
- Take detailed meeting minutes, including action items, and issue within 24-hours.
Finalizing Bidder Pricing and Awarding Scopes of Work
- Once all updated bidder pricing has been received, reviewed, and agreed upon, subcontractors and purchase orders should be issued.
The Scope - Buy Our Subcontract and the Language
- Provide blank subcontract for them to review and clarify that it is non-negotiable if they would like the project.
- Confirm insurance requirements
- Payment Terms - Discuss Joint Check and GC Pay
- A sample Subcontract, Purchase Order, Insurance Certificate, and Sub Memo was included as part of the standard bidding documents on SmartBid when sent out to bid
- Buy hourly rates but know the market and negotiate
- If discussed, it goes into the subcontract
- Do NOT sneak in verbiage if you didn't discuss it
- Sub Qual Forms and Bonding Capacity
- Clarify the schedule that we need. Don't ask how how long it will take to complete.
- Confirm submittals and procurement timeframes meet our schedule
- May need to buy multiple crews
- Buy durations, not dates
- Be careful buying number of workers
Quality and Safety
- Any specific requirements that need to be met for their scope of work?
- Mock-Up, Always!
- How are you buying clean-up?
- Make sure all OSHA regulations and requirements are acknowledged and met
- 6' Fall Protection is Brinkmann standard - not an industry standard
- Silica Standard
|CURRENT DOCUMENTS AND TOOLS
|Master templates of all the forms shown below can be found in the Documents Tool of your project.
Bid Proposal Forms
- The purpose of a Bid Proposal form is to help organize bidders' costs to accurately review and ensure full scope coverage.
- A bid proposal form may not be required for all scopes of work due to size and/or complexity of the scope of work. This should be determined by the project manager for accurate bid reviews.
- Bid Proposal Forms should be sent out with, or quickly after, the initial invitation is sent on SmartBid.
- Be sure to update and add special notes, bidding instructions, requirements, etc. on the forms to help guide the bidders.
- Below is an example of a Retaining Wall bid form.
- Must complete in detail for every scope
- Buyout is the opportunity to eliminate scope gap and avoid profit fade
- Comes from check set/scope take-off
- Used as a template to draft the subcontract
Sub Bid Analysis
- This is not a buyout form, but rather a tool to organize and look over multiple bids to ensure accurate bid comparison.
- Many GMP and Cost of Work prime contracts will require a sub bid analysis completed and recommendations sent to the owner for approval. Know your Prime Contract so we can be prepared.
- Each scope of work, purchase orders and subcontract, should be reviewed utilizing the Sub Bid Analysis Form.
- If done properly, you can clearly see scope gaps by different bidders, and it will help you accurately update project estimates.
- Best Practices/Tip:
- If you create a detailed Bid Proposal Form, it will help you organize your bidders costs accurately.
- Understanding how bidder's breakdown bids is important, and what the project/owner will require. This will help you fill out the bid section of the overall estimate.
- Do you need to breakout the building into phases/sections?
- Do you need to separate finishes from shell and core?
- Does the owner need to know specific costs about certain items?
- Below is an example of a Countertop Bid Analysis:
- Base Bid Scope of Work: Itemized Detail/Breakdown for specific scope items.
- Brinkmann Budgets: Current Brinkmann budget for the specific scope of work. (Think the phase code budget).
- Bidders (Yellow Bars): Input all bidder information
- Best Practice - As soon as we receive the bid, we should add them to the sub bid analysis sheet, and then the bid book.
- Review the bid and update the specific line-item cost and determine the following:
- Specific price for scope item (best option)
- Y: Included in overall price or elsewhere within the breakdown
- N: Not included in the overall price or elsewhere within the breakdown
- To normalize the bid, we need to get another bidders price to fill in the gap, or provide an estimated cost to complete the specific line item.
- C: Contingency. May be applied if we have a risky subcontractor, some vague drawings, or other project risks.
- The goal is to accurately review the estimated costs for each bidder performing the work and select the best subcontractor to perform the work.
- Buy Hard. Firm but fair
- Get all included up front - No change orders later. Touch it once - Field and Office.
- All leverage is lost once awarded
- Spend the most time on high risk and large scopes
- Critical items first
- Unit costs and bid breakdown helps understand scope gap and overlap
- Gut feeling when you sit down
- Sit down with as many as you can
- Weigh risks and size of subcontract scope
- Art of "Buying the Grey" and Missing information
- How are they going to perform their work?
- What do you need them to include that is not specifically shown on the drawings?
- What CO's came up on past projects?
- Review all exclusions and don't gloss over them
- Understand who will be 1099 or piecemeal workers
- Get them talking
Risky Subcontractors: What to Look For and Require
- Prequalification Form
- Right size for the job
- Some projects may be too large for the sub. Look for past experience and compare.
- Manpower Availability
- Financial Stability
- How much can they bond for?
- How much backlog do they have?
- What is their current cashflow?
- Discuss payment terms
- 2nd Tier Subcontractors and Suppliers
- How much of the work are they subbing out? See if those subs can attend the buyout meetings
- Director involvement with risky contractors
- Review risk concerns and considerations with directors prior to award
- Get references and call them to see what the other GC's have to say
- Don't buy as needed. Get the scopes of work bought out as quickly as possible
- Especially with a volatile market, conditions and material prices change quickly!
- Typically, 90% of the work is bought out within 2-4 weeks (depending on project size)
- A quick buyout will help with submittal and procurement constraints
- Do as much buyout and prep work as you can early. (Best before actual project operations begin)
- Prioritize and focus on critical packages first (know the schedule)