Project Bids And Contracts

PRMG 080

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Presented By :
El-Melegy, Ahmed
ID
700133771
 Bid
A bid is given to the owner by construction managers that are
willing to complete their construction project. A bid tells the
owner how much money they should expect to pay the
construction management company in order for them to
complete the project.
• Open Bid: An open bid is used for public projects. Any and all contractors
are allowed to submit their bid due to public advertising.
• Closed Bid: A closed bid is used for private projects. A selection of
contractors are sent an invitation for bid so only they can submit a bid for
the specified project
 Procurement

• The procurement stage is when labor, materials and equipment needed to

complete the project are purchased. This can be done by the general
contractor if the company does all their own construction work. If the
contractor does not do their own work, they obtain it through
subcontractors. Subcontractors are contractors who specialize in one
particular aspect of the construction work such as concrete, melding,
glass, or carpentry. Subcontractors are hired the same way a general
contractor would be, which is through the bidding process. Purchase
orders are also part of the procurement stage.
 Contract

• Lump-sum: This is the most common type of contract. The construction

manager and the owner agree on the overall cost of the construction
project and the owner is responsible for paying that amount whether the
construction project exceeds or falls below the agreed price of payment.
• Cost-Plus-Fee: This contract provides payment for the contractor including
the total cost of the project as well as a fixed fee or percentage of the total
cost. This contract is beneficial to the contractor since any additional costs
will be paid for even though they were unexpected for the owner.
• Guaranteed Maximum Price: This contract is the same as the cost-plus-
fee contract although there is a set price that the overall cost and fee do
not go above.
• Unit-Price: This contract is used when the cost cannot be determined
ahead of time. The owner provides materials with a specific unit price to
limit spending
 Project
• A unique set of co-ordinated activities, with definite starting
and finishing points, undertaken by an individual or
organization to meet specific objectives within defined
schedule, cost and performance parameters
• As stated in the definition, a project has a definite starting and
finishing point and must meet
• certain specified objectives.
• Broadly these objectives, which are usually defined as part of
the business case and set out
• in the project brief, must meet three fundamental criteria
1. The project must be completed on time;
2. The project must be accomplished within the budgeted cost;
3. The project must meet the prescribed quality requirements.
 Project Management
• The planning, monitoring and control of all aspects of a
project and the motivation of all those involved in it, in order
to achieve the project objectives within agreed criteria of
time, cost and performance.
• While this definition includes the fundamental criteria of
time, cost and performance, the operative word, as far as the
management aspect is concerned, is ‘motivation’. A project
will not be successful unless all (or at least most) of the
participants are not only competent but also motivated to
produce a satisfactory outcome.
 Procurement Plan
Before any major purchasing operation is considered, a
purchasing strategy must be drawn up which sets out the
criteria to be followed. These include:
• The need and purpose of the proposed purchase
• Should the items be bought or leased?
• Should the items be made in-house?
• Will there be a construction element involved? If there is, it will be
necessary to draw up sub-contract documentation. If there is no
construction or assembly element, a straight purchase order will suffice.
• How many companies will be invited to tender?
• Will there be open or selective tendering? This will often depend on the
value and strategic or security restrictions. European Union regulations
require contracts (subject to certain conditions) over a certain value to be
opened up for bidding to competent suppliers in allmember states.
 FIDIC
• The International Federation of Consulting
Engineers (commonly known as FIDIC, acronym for its French
name Fédération Internationale Des Ingénieurs-Conseils) is
an international standards organization for
the construction industry, best known for the FIDIC family
of contract templates. The fact that the organisation has
a French title bears testimony to its foundation in 1915 by
three countries each wholly or partly francophone. The
founding member countries of the FIDIC
were Belgium, France and Switzerland.