Bidding and Awarding Construction Contracts
The London & District Construction Association (LDCA) serves over 600 member companies in 6 counties in southwestern Ontario. Established in 1898, the association has a rich history of providing advice and other construction information related services to the industry.
The Board of Directors of the association has consistently through its history been comprised of representatives from Manufacturers and Suppliers of construction materials, sub-contracting companies, general contracting companies and related professional services suppliers including construction litigation lawyers, architects and engineers working in the industrial, commercial and institutional (ICI) sector. On average in modern times, over $2 billion per year in construction is carried out in the region represented by the association. All volunteers of the Board at the time of their service to the association are working in their respective market sphere.
This code is designed to serve as a consensus based opinion aimed at balancing the interests of all parties performing a construction project in the ICI sector. Moreover, it is to serve as a tool to evaluate the performance of the process of bidding and contract award to members subscribing to the LDCA and serve as a yardstick to offer opinion when dispute arises or questions from the membership arise. The application of this code shall be managed and utilized by the LDCA Tendering Practices and Ethics Committee.
This code uses as its basis for reference, the CCDC joint committee Document 23, Guide to Calling Bids and Awarding Construction Contracts, 2005
1.0 Guiding Principles
- The LDCA encourages the use of CCDC 23 as a comprehensive guide to calling bids and awarding contracts and encourages the use of CCDC standard construction contracts.
- Bidders shall be provided with appropriate and all relevant information pertaining to the instructions to bidders, specified material, construction method, supplementary information and be permitted adequate and reasonable time to prepare a bid.
- Bidders shall be entitled to a level playing field that ensures no participant in the process may or can gain an unfair advantage over the other.
- Risk is conveyed in a transparent manner allowing bidders to manage risk.
- The bidding process should aim to be as fair, simple and concise as possible and due diligence must be employed when requiring separate and/or alternate prices.
- Award evaluation is based on a principle of fairness, openness and responsibility. Base Bids should be used to determine the successful bidder.
- Bid practices shall be standardized to the extent possible within your organization, notwithstanding conditions required by purchasers of construction.
- Subcontractors should be advised immediately following the award of a general contract whether their tender was used in the make-up of the general contract tender
- A contractor should award each subcontract to the qualified subcontractor with the lowest price.
- Payments for work completed should be made promptly in accordance with applicable legislation and terms of the contract.
2.0 Bids are Confidential Information
- A bidder should neither seek nor accept information concerning a competitors bid prior to closing
- In order to maintain the security and confidentiality of a bid, a bidder should never make known the components of his/her bid prior to bid closing
- CCDC 23 provides recommended guidelines to Owners in the situation where the lowest compliant bid exceeds the Owners budget. If the overall bid amount must be reduced by LESS than 15% - Negotiate with lowest bidder to identify changes and conclude contract A. Failing negotiation, invite 3 lowest compliant bidders to re-bid on modified bid documents.
- Should cost savings be initiated by the Owner, and the lowest bid is NOT willing to participate, it is appropriate to use the next lowest bid provided the lowest bidder has been given fair opportunity and has been notified IN WRITING of your intent prior to negotiating with next lowest bidder.
- Projects involving the use of public monies, should be opened publicly.
3.0 Naming of Sub Trades and Supplemental Information
- The Associations position on limiting the naming of sub-trades is a balance between the need for as simplified a bid submittal process as possible against sub-trade concerns regarding bid shopping. On typical construction projects, major sub-trades are considered critical trades and are commonly required to be named.
- If the Owner requires additional information such as alternate prices, separate prices, itemized prices, additional sub-trade naming the Association recommends using a 2 envelope 2 stage bid closing. The amount of time between submission of the 2 envelopes should be not less than 2 hours but not more than 4 hours.
- The Association is of the position that when a bidder submits a sub-trade list with one or more trades listed as “own forces”, the Owner should validate the claim before award of the contract. The Owner should verify the firm is capable of undertaking the trade work with its own forces.
For more information and supporting guidelines, please contact the LDCA at 519-453-5322