School of Engineering and Architecture

Civil Engineering Department

Construction Engineering and Management

ADVANCE CONSTRUCTION
METHODS AND EQUIPMENT
Module 1 Chapter 1 – Construction Projects

Objective After this chapter, the student should be able to:

 Preparation of a complete bid for a construction project

Content This chapter focuses on

 Construction project cycle
 Preparing a bid package
 Bidding process and requirements

Related These are supplemental content necessary for this chapter

 Richardson, G. L. (2015). Project management theory and
Readings 
practice (2nd ed.). Boca Raton: CRC
A Guide to Project Management Body of Knowledge.
https://collegelearners.com/ebooks/pmbok-6th-edition-
printable-version-pdf-free-download/

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CONSTRUCTION PROJECT LIFE CYCLE – PHASES IN LIFE CYCLE OF A

CONSTRUCTION PROJECT

Every individual involved in the process of planning, designing, financing, constructing and operating
physical facilities related to the project under consideration, gain different viewpoints on project
management for construction.

The contribution of proficient knowledge can be very beneficial, mainly when it comes to large and
complicated projects, since experts in various specialties can offer valuable services. On the other
hand, it is very important and advantageous to understand how the different parts of the process
match together.

The poor coordination and communication between the specialists can result in waste, excessive
cost, and delays. It is chiefly the requirement of the owner to assure that such flaws do not happen
between them. And it owes all participants involved in the project to regard the interests of owners,
as at the end, it is the owners who provide the resources and make the decisions.
Implementation of owner’s viewpoint will help the participants to focus on the completion of the
project by having proper attention in the process of project management for constructed facilities.
This would minimize the old concept of bringing decisions based on the historical roles of specialists
involved in the project.

Specialists mentioned are the planners, architects, engineering designers, constructors, fabricators,
material suppliers, financial analysts, and others. It is true that each specialist individually has a lot of
contribution to the advances seen in the construction field.

But the understanding of the entire process of project management will make them respond more
effectively to the owner’s desires. Hence, they can contribute their proficiency through opinions in
improving the productivity and quality of their work.

Enhancement of project management boosts the construction industry which in turn facilitates the
development of national and world economy. To have significant improvements, know the
construction industry, its working environment and the institutional constraints affecting its activities
and the nature of project management.

CONSTRUCTION PROJECT LIFE CYCLE

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The purchase of a constructed facility is a major capital investment. The owner can be an
individual, a private corporation or a public agency.
As the commitment of resources for such a large investment is stimulated by market demands or
real needs, the facility is likely to satisfy certain objectives. These requirements will be within the
constraints of the specified owner and applicable policies.

Most of the constructed facilities are custom made in consultation with the owners, with an
exception in the case of the residential units that may be sold as built by the real estate developer.
He is regarded as the sponsor of building projects, so far as government agency may be the
sponsor of a public project and turns it over to another government unit upon its completion.

For project management, the terms “owner” and “sponsor” are one and the same because both
have the ultimate power to make all important decisions. It is judicious for any owner to have a clear
understanding of the acquisition process to sustain firm control of the quality, timeliness, and cost of
the completed facility, as he is essentially acquiring a facility on a promise in some form of
agreement.
The project life cycle for a constructed facility may be represented schematically in Figure 1. A
project meets the market demands or requirement on a timely basis. a variety of possibilities may be
taken into consideration in the conceptual planning stage.

Hence the technological, as well as the economic feasibility of each option, will be assessed and
compared to select the best possible project.

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Fig.1.The Project Life Cycle of a Constructed Facility

The financing strategies for the proposed options and ideas should undergo a clear examination,
which is later programmed with respect to the timing for project completion and based on the cash
flow availability.

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Once the scope of the project is clearly explained and defined, thorough engineering design will
provide the blueprint for construction, and the definitive cost estimate will provide the baseline for
cost control.

Careful planning and control during the procurement and construction stage, the delivery of
materials and the erection of the project on the site has to be maintained. Once the construction is
completed, there is usually a brief period of start-up of the constructed facility when it is first
occupied.

At last, the management of the facility is turned over to the owner for full occupancy until the facility
lives out its useful life. That is to check the building durability once the functionality is started. If the
building cannot show any defects before the period specified, it was chosen for demolition or
conversion.

The stages of development may not be strictly sequential as shown in figure-1. Certain specific
stages require iteration, and the others can be carried out in parallel or in overlapping time frames.
This decision mainly depends on the nature, size and urgency of the project.

Moreover, an owner may gain house capacities to handle the work in every stage of the entire
process. If it is not possible they may request professional advice and services to guide the work in
all stages. Reasonably, most owners choose to handle some of the work in-house. To guide other
components of the work, they give the contract to outside professional services as per requirement.
Analysis of the project life cycle from an owner’s perspective would help us to focus on the proper
roles of various activities and participants in all stages apart from the contractual engagements for
different types of work.

Life Cycle Phases in Construction Project

A standard construction project, in general, has following five major life cycle phases:
1. Initiation
2. Planning
3. Execution
4. Performance and monitoring
5. Closure

This has been shown in following figure in sequence:

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A brief description specifically about each stage are explained below.

1. Initiation Phase of Construction Project

We have to create and evaluate the project in order to determine if it is feasible and if it should be
undertaken, at the beginning of the project. Here the project objective or need is identified; this can
be a business problem or opportunity.

A suitable response to the need is documented in a business case with recommended solution
options. A feasibility study is conducted to examine whether each option clearly identifies the project
objective and a final recommended solution is determined.

Many questions related to the issues of feasibility i.e. “can we do the project?” and justification like
“should we do the project?” are mentioned and faced.

When a solution is approved, a project is initiated to implement the approved solution. For this, a
project manager is appointed. At this stage, the major deliverables and the participating work
groups are identified. This is the time when the project team begins to take shape. Approval is then
required by the project manager to move onto the detailed planning phase.

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2. Planning Phase of Construction Project

The planning phase involves further development of the project in detail to meet the project’s
objective. The team identifies all of the work to be done. The project’s tasks and resource
requirements are identified, along with the strategy for producing them.

In a broader sense identification of each activity as well as their resource allocation is also carried
out. A project plan outlining the activities, tasks, dependencies, and timeframes is created.

The project manager is the one who coordinates the preparation of a project budget by providing
cost estimates for the labor, equipment, and materials costs. This is mainly carried out by project
scheduling software like MS project or PRIMAVERA. This scheduling charts would help us to track the
stages of our project as time passes. This is also referred to as “scope management.”

The budget of the project already estimated is used to monitor and control cost expenditures during
project implementation.

Finally, we require a document to show the quality plan, providing quality targets, assurance, and
control measures, along with an acceptance plan, listing the criteria to be met to gain customer
acceptance. At this point, the project would have been planned in detail and is ready to be
executed.

3. Execution Phase of Construction Project

This is the implementation phase, where the project plan is put into motion and the work of the
project is performed practically on site. It is essential to maintain control and communicate as
needed during each implementation stages.

Progress should be continuously monitored and appropriate adjustments are made and recorded as
variances from the original plan. A project manager is the one who spends most of the time in this
step. Throughout the project implementation, people carry out the tasks, and progress information
is being reported through regular project team meetings.

The project manager uses this information to preserve control over the direction of the project by
comparing the progress reports with the project plan to measure the performance of the project
activities. If any deviation is found from the already defined plan corrective measures are made.

The first option of action should always be to bring the project back to the original plan. If that
cannot happen, the team should record variations from the original plan and record and publish
modifications to the plan. all through this step, project sponsors, and other key stakeholders are kept

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informed about the project’s status as per the agreed rate and format of communication. The plan
should be updated and available on a regular basis.

Status reports should always highlight the probable end point in terms of cost, schedule, and quality
of deliverables. Each project deliverable produced should be reviewed for quality and measured
against the acceptance criteria.

When deliverables have been produced and the customer has agreed on the final solution, the
project is said to be ready for closure.

4. Performance and Monitoring Phase of Construction Project

This stage is all related to the measurement of progress and performance to make sure that items
are tracking with the project management scheduling. This phase regularly happens at the same
time as the execution phase.

5. Closure Phase of Construction Project

During the final closure, the importance is on providing the final deliverables to the customer, that is:

 Handing over project documentation to the business

 Termination of supplier contracts
 Releasing project resources
 Communicate the closure of the project to all stakeholders.
 Last and final is to conduct lessons-learned studies to examine what went well and what
didn’t.

This type of analysis would make the knowledge of experience to be transferred back to the project
organization, which will help future project teams.

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CONSTRUCTION BIDDING

Construction bidding is the process of submitting a proposal (tender) to undertake, or manage the
undertaking of a construction project. The process starts with a cost estimate from blueprints and
take offs.

The tender is treated as an offer to do the work for a certain amount of money (firm price), or a
certain amount of profit (cost reimbursement or cost plus). The tender which is submitted by the
competing firms is generally based on a bill of quantities, a bill of approximate quantities or other
specifications which enable the tenders attain higher levels of accuracy, the statement of work.

For instance, a bill of quantities is a list of all the materials (and other work such as amount of
excavation) of a project which have sufficient detail to obtain a realistic cost, or rate per described
item of work/material. The tenders should not only show the unit cost per material/work, but should
also if possible, break it down to labor, plant and material costs. In this way the individual who is
selecting the tender will be quite confident that the tender is feasible. Bids are not only chosen on
cost alone. Sometimes contractors submit lower tenders to win the contract and win the work. Either
the costs that the contractor incurs is greater than the price he is charging the client (as a
consequence of a lower tender determining the contract sum), and thus is likely to go insolvent, or
he will claim for "loss and/or expense" due to discrepancies in the contract documents (this can be
done deliberately). The lowest tender is not always a feasible tender. The lowest tender is the most
likely to increase the contract sum, the most throughout the course of the project.

BIDDING PROCESS

1. Preparation of Bid/Tender Documents

To ensure fairest competition, the Bid/Tender Documents shall describe clearly and precisely the
nature of the goods for which bids are to be invited, the technical standards/requirements which
must be met, the place and period of delivery or installation, the warranty and maintenance
requirements, the method and criteria to be employed in the evaluation and comparison of bids,
and other pertinent terms.

2. Invitation to Apply for Eligibility and to Bid

Invitation to Apply for Eligibility and to Bid for local competitive bidding, the minimum content of
which is prescribed, shall be publicly advertised at least 14 days before the deadline for submission
of eligibility and bid requirements, in two consecutive issues of two newspapers of general

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circulation existing for at least 2 years, and posted in the website of the Department of Budget and
Management (DBM) Procurement Service and of the concerned office/agency/corporation during
the same period or for a longer period as determined by the Head of the office/agency/corporation
concerned, and posted at any conspicuous place reserved for this purpose in the premises of the
DBM Procurement Service and of the concerned office/agency/corporation, as certified by the Chief
of Administrative Services or the equivalent official of the concerned office/agency/corporation.
However, for contracts to be bid costing two million pesos (P2,000,000) and below, advertisement
may be posted only in the website of the DBM Procurement Service and of the concerned
office/agency/corporation during the same period as above or for a longer period as determined by
the head of the office/agency/corporation concerned, and posted at any conspicuous place
reserved for this purpose in the premises of the DBM Procurement Service and of the concerned
office/agency/corporation, as certified by the Chief of Administrative Services or the equivalent
official of the concerned office/agency/corporation.

For international competitive bidding, advertisement shall be done along the same lines prescribed
above. Advertisements of invitations for contracts financed partly or wholly from ODA funds
provided by IFIs shall be in accordance with the procedures established by and agreed upon with
the concerned IFI.

For procurement methods other than the open competitive procedure, public advertisement of the
Invitation to Apply for Eligibility and to Bid may be dispensed with.

3. Issuance of Application for Eligibility Forms and Bid/Tender Documents

Prospective bidders shall be given ample time to examine the forms for application for eligibility and
the bid/tender documents and to prepare their respective bids. To provide ample time, the
concerned BAC shall make available upon payment, if applicable, said documents from the time the
Invitation to Apply for Eligibility and to Bid is first advertised.

Supplemental bulletins may be issued upon the government's initiative or upon request of any
interested party who secured the bid/tender documents, otherwise referred to as a prospective
bidder, for purposes of clarifying any provision of the bidding document. Any amendment to the
bid/tender documents should be identified as an amendment. Such bulletins containing
amendments and/or clarifications of certain provisions of bid documents shall be sent by mail, by
hand or electronically, to and duly received/acknowledged by all interested parties within a
reasonable time, including extension of the deadline set for the receipt of bids if needed, to be
determined by the agency concerned depending on the nature, complexity and magnitude of such
notices/amendments to allow said bidders to consider the same in preparing their respective bids.
Requests for clarification(s) on bid documents by interested parties who have secured the bid
documents must be in writing, and submitted to the BAC within 14 calendar days before the

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deadline set for the submission of eligibility and bid envelopes. All clarifications shall be made in
writing and furnished to all interested parties within the time stipulated in the Instruction to Bidders,
before the deadline for the submission of bids.

4. Determination of Eligibility of Prospective Bidders

The capabilities and resources of prospective bidders shall be initially assessed, subject to post-
qualification, to determine if they meet the requirements for eligibility. The determination of
eligibility of prospective bidders shall be based on the submission of the following documents as
specified hereunder:

A. Legal Documents
1. Current licenses/permits including Department of Trade and Industry (DTI) business name
registration or Securities and Exchange Commission (SEC) registration certificate, mayor's
permit/municipal license, Bureau of Internal Revenue value-added tax registration, and if applicable,
DTI accreditation certificate
2. Prospective bidder's statement that his firm is not "blacklisted" or barred from bidding by any
government office/agency/corporation

B. Technical Documents - prospective bidder's statement of previous similar contracts/sales

completed in at least the last two years, as prescribed by the agency in the Invitation to Apply for
Eligibility and to Bid. "Similar" contracts shall be defined by the concerned office/agency/corporation
in the Invitation to Apply for Eligibility and to Bid. The bidder's documents shall include, for each
contract, kinds of goods/supplies/materials sold, amount of contract, end user's acceptance, name
of contract, date of contract, date of delivery, specification whether prospective bidder is a
manufacturer, supplier or distributor. In the case of capital goods, the value of the bidder's largest
single contract, adjusted to current prices, completed within the period specified in the Invitation to
Apply for Eligibility and to Bid, and similar to the contract to be bid, must be at least fifty percent
(50%) of the approved budget for the contract to be bid.

C. Financial Documents - audited financial statements, stamped "received" by the Bureau of Internal
Revenue, for the last two calendar years. Each of the above requirements shall be under oath and
duly notarized, and shall form part of the duly accomplished application form for eligibility. For
special cases of procurement of goods/supplies/materials where foreign suppliers may participate,
the above requirements may be substituted by the appropriate equivalent documents issued by the
foreign supplier's country. These documents must be duly acknowledged by the Philippine
Consulate therein.

The eligibility of prospective bidders shall be determined using simple "pass/fail" criteria and shall be
determined as either "eligible" or "ineligible". If the prospective bidder is rated "passed" for all the

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above requirements, he shall be considered eligible. If the prospective bidder is rated "failed" in any
of the above requirements, he shall be considered ineligible.

If only one bidder is found to be eligible, or that only one bidder responded to the Invitation to
Apply for Eligibility and to Bid, the agency concerned shall recognize a lone eligible bidder as valid.

Notwithstanding the eligibility of a bidder, the government reserves the right to review the
qualifications of a bidder before the bidding of the contract is made. Should such review uncover
any misrepresentation made in the eligibility statements, or any changes in the situation of the
bidder to materially downgrade the substance of such statements, the agency concerned shall
disqualify the bidder from submitting a bid.

5. Pre-bid Conferences

For contracts to be bid costing more than one million pesos (P1,000,000), pre-bid conferences shall
be conducted by the government, to clarify and/or explain any of the requirements, terms,
conditions and specifications stipulated in the bid documents. For contracts to be bid costing one
million pesos (P1,000,000) or less, pre-bid conferences may be conducted at the discretion of the
concerned office/agency/corporation. The conference shall be held not later than 14 days after the
bid documents have been made available to the prospective bidders to familiarize themselves with
the documents but sufficiently in advance of bid opening to allow consideration of the conference
results in preparing bids. The bidders shall bear all costs in the preparation of their bids and the
government shall in no case be responsible or liable for these costs, regardless of the outcome of
the bidding process.

Among others, the pre-bid conference shall discuss the following:

a. technical specifications
b. legal requirements
c. financial requirements
d. production capability requirements
e. delivery schedule
f. after-sales service requirements

Any statement at the pre-bid conference shall not modify the terms of the bid documents unless
such statement is specifically identified in writing as an amendment thereto and sent by mail, by
hand or electronically to all parties who have secured the bid/tender documents. The minutes of the
conference(s) shall be recorded and made available to all participants.

6. Submission, Receipt and Opening of Eligibility and Bid Envelopes

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Prospective bidders shall submit their application for eligibility and bid documents simultaneously on
the specified deadline for the submission of the eligibility and bid envelopes. The eligibility envelope
shall be sealed and contain the documents required in section 4. The bid envelope(s) shall be sealed
and contain the documents required in section 4.8.1 and Annex F. In case of single-stage bidding:
Prospective bidders shall submit simultaneously two envelopes, one containing eligibility
requirements and the other containing bidding documents. In case of single-stage bidding variation:
Prospective bidders shall submit simultaneously three envelopes, one containing eligibility
requirements and two containing bidding documents. Contents of each of the bid envelopes are
specified in Annex F. In case of two-stage bidding: Prospective bidders shall submit their eligibility
envelopes first, during the first stage of the bidding. Eligible bidders who are interested to bid shall
submit their bidding documents in two sealed envelopes during the second stage of the bidding.
The eligibility envelopes of prospective bidders shall be opened first to determine eligibility of
prospective bidders. In case any of the requirements specified in section 4 is missing from the
eligibility envelope, the BAC shall declare said prospective bidder as "ineligible" to bid. Bid
envelope(s) shall immediately be returned unopened to ineligible bidders in case of simultaneous
submission of eligibility and bid envelopes. In case of single-stage bidding variation and two-stage
bidding, the first bid envelopes of eligible bidders shall be opened to determine the bidders'
compliance with requirements. In case any of the requirements is missing, the BAC shall rate the bid
as "failed" and immediately return to the bidder concerned his second bid envelope unopened. The
second envelopes of the remaining eligible bidders shall be opened immediately for those whose
first bid envelopes were rated "passed". In case any of the requirements in the second envelope is
missing or if the submitted price exceeds the approved budget for the contract, the BAC shall rate
the bid concerned as "failed". Only bids whose envelopes are all rated as "passed" shall be evaluated
and calculated to come up with the lowest calculated bid.

Bidders may be required to submit bids either through the single-stage bidding procedure, its
variation or two-stage bidding procedures depending on the requirements of the procurement
process as duly approved for use.

Each bid shall be accompanied by a bid security that is payable to the concerned agency as a
guarantee that the successful bidder shall, within fifteen (15) calendar days after receipt of the Notice
of Award, enter into contract with the Government and furnish the required performance security for
the faithful performance of all works called for. Failure to enclose the required bid security as to form
and amount prescribed herein shall automatically disqualify the bid concerned.

The amount of the bid security shall be fixed at an amount equal to two-and-one-half percent (2-
1/2%) of the approved budget for the contract to be bid. The security may be in the form of cash,
cashier's check, manager's check, bank draft or guarantee against any reputable bank, letter of
credit issued by a commercial bank, a surety bond callable on demand issued by a surety or
insurance company accredited by the Office of the Insurance Commissioner, or any combination

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thereof.

Bids and bid securities shall be valid for such reasonable period determined by the head of the
agency concerned. This period shall be so indicated in the Instructions to Bidders. In no case shall
this period exceed one hundred twenty (120) days from the date of opening of bids.

Withdrawal of bids after the applicable deadline shall be subject to appropriate sanctions as
prescribed herein. Bid modifications received after the applicable deadline as well as bids submitted
after the deadline for the submission of bids shall not be considered and shall be returned
unopened. Subject to this restriction, a prospective bidder may withdraw his bid, including the bid
security, or modify it. Where a bidder wishes to modify his bid, he shall not be allowed to retrieve his
original bid, but shall only be allowed to send another bid equally sealed, properly identified and
linked to his original bid and marked as "modification".

No bid securities submitted in the form of sureties of all complying bidders shall be returned after
the opening of bids. Bid securities submitted in form other than sureties, such as cash, cashier's
check, manager's check, letter of credit and bank draft/guarantee, may be returned upon request of
the bidder, provided that he is not among the three lowest evaluated complying bidders and such
withdrawal shall be construed as a waiver by the bidder for the award of contract. Bid securities in
the form of sureties shall be returned only after the successful bidder has signed the contract and
furnished the performance security but not later than the expiration of the bid security validity
period indicated in the Instructions to Bidders.

If only one (1) bid is received in response to an invitation for bids, an award may be made to the
single bidder provided that his bid price is not higher than the approved budget for the contract to
be bid, his bid passes post qualification, and there is no evidence of collusion with non-participating
suppliers and/or other parties and that other prospective bidders were given equal opportunity to
respond.

7. Determination of the Lowest Calculated Responsive Bid

The "lowest calculated responsive bid" is defined as the bid (a) with the lowest calculated price as
determined by a specific evaluation procedures, and (b) which complies with or is responsive to all
the requirements hereof. The bid satisfying (a) shall be referred to as the lowest calculated bid.

The BAC shall determine the lowest calculated responsive bid in the following manner:

A. The first step is to determine whether each eligible bid complies with the submission
requirements. The BAC shall rate a bid "passed" only if it complies with all the requirements and the
submitted price does not exceed the approved budget for the contract.

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B. The second step is to establish the calculated prices of all bids rated "passed" in the first step.
Calculated prices are to be determined in accordance with the specific evaluation procedures. The
BAC shall then rank the calculated prices from lowest to highest.
C. The third step is the post qualification of the bidder with the lowest calculated price based on the
results of the above evaluation. This shall be done in accordance with the provisions hereof. In case
the said bidder fails to post qualify, the provisions of section 10 shall apply.

8. Examination and Evaluation of Bids

Prior to bid evaluation and comparison, bids received shall be examined using "pass/fail" criteria, to
determine submission of the following: the bid prices in the bill of quantities, the recurring and the
maintenance costs (if applicable), bid securities as to form, amount, and validity period, authority of
signatory, production/delivery schedule, person power requirements, after-sales service/parts,
technical specifications, credit line commitments or cash deposit certificate, and other non-
discretionary criteria as stated in the Instructions to Bidders. The above requirements shall be
submitted in the following manner: one sealed bid envelope for single stage bidding; two sealed bid
envelopes for single stage bidding variation; and at least two sealed envelopes for two stage
bidding. Only bids that are determined to contain all the bid requirements in the sealed envelope/s
shall be rated "passed" and shall be considered for evaluation and comparison.

The purpose of bid evaluation is to determine the lowest calculated bid. This bid, which may not be
the lowest submitted price, shall be subject to post qualification. Post qualification shall determine
the responsiveness of the lowest calculated bid to eligibility and bid requirements. The contract shall
be awarded to the bidder with the lowest calculated responsive bid. The bid evaluation shall be
based on a detailed analysis of the following:
A. Completeness of the bid: unless the instructions to bidders specifically allow partial bids, bids not
offering all of the required items shall be considered non-responsive and, thus, automatically
disqualified
B. The bid security must conform to the requirements of the Instructions to Bidders, as to type,
amount, form and wording, and validity period
C. The recurring costs if any and maintenance costs
D. The bid price subject to a price equalization analysis calculating arithmetical errors and other
minor deviations
E. Identification of minor/major deviations and terms and conditions as described in the Instructions
to Bidders Bids that contain major deviations from the requirements in the instruction to bidders
shall be considered invalid. Major deviations are those that would not fulfill the purpose for which
the bid was requested, or would prevent a fair comparison with bids that comply with the bid
documents. Examples are:
(1) stipulating price adjustment when fixed price bids were called for;
(2) failing to respond to the specifications by offering a different design or work item;

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(3) subcontracting beyond allowable limits;

(4) refusing to bear contractual responsibilities specified in the bid documents, such as performance
guarantees;
(5) taking exception to critical provisions or setting conditions to his bid, such as applicable laws,
taxes and duties, and dispute resolution procedures.
F. Corrections for errors, discounts, and other modifications: corrections for arithmetical or
computational errors, as well as for discrepancies between total bid prices and extended unit bid
prices, between stated total prices and actual summations, between prices in figures and in words,
and other errors/discrepancies, shall use the methodology described in the Instructions to Bidders.
Discounts and other modifications in the bid amounts shall be reflected in the evaluation of bids.

The concerned agency may employ any of the specific evaluation procedures in determining the
bid's calculated price that it deems most appropriate for the requirements of a particular contract.
The use of any such procedure shall be approved by the head of the concerned
office/agency/corporation and indicated in the Instructions to Bidders.

Evaluation of bids shall be completed not later than thirty (30) calendar days from the date of the
opening of bids. The BACs of all agencies shall prepare and keep on file detailed reports on the
evaluation and comparison of bids setting forth the specific reasons on which recommendations are
based for the contract award.

The Government reserves the right to reject any or all bids or to declare the bidding a failure if there
is evidence of collusion among bidders thus resulting in the absence of competition. However, all
bids shall not be rejected and new bids invited on the same specifications for the purpose of
obtaining low prices, except in cases where the lowest submitted bid exceeds the approved budget
for the contract under bidding. In such a case, a revised less expensive requirement may be
substituted to seek a more affordable result.

No information relating to the detailed evaluation of bids, post qualification of the lowest calculated
bid and recommendations concerning awards shall be disclosed to persons outside the BAC
concerned before the announcement of the contract award to the successful bidder. After the award
of contract, all unsuccessful bidders shall be informed individually in writing.

9. Failure of Bidding

The Government shall declare the bidding a failure and the concerned office/agency/corporation
shall conduct a rebidding with re-advertisement of the project when no bids are received, or without
re-advertisement when all bids fail to comply with all the eligibility and bid requirements or fail post
qualification. In case of the latter, a direct notification shall be extended to all bidders either by mail,
by hand, or electronically.

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Should there occur another bidding failure after the conduct of the project's rebidding, the agency
concerned may enter into a negotiated procurement.

10. Post qualification of the Lowest Calculated Bid

To determine the lowest calculated responsive bid, the BAC shall, within thirty (30) days from the
determination of the lowest calculated bid, conduct a post qualification of the bidder with the lowest
calculated bid. The post qualification shall verify, validate and ascertain whether the bidder with the
lowest calculated bid complies with and is responsive to all the requirements for eligibility and of the
bidding, using the non-discretionary "pass/fail" criteria stated in the Invitation to Apply for Eligibility
and to Bid and in the Instructions to Bidders. These criteria shall consider, but shall not be limited to,
the following measures:
A. Legality of documents To validate the licenses and agreements submitted by the bidder.
B. Evaluation of technical capacity To determine compliance of the goods/product with the required
specifications. This may include inspection and tests of the goods/product, maintenance and after-
sales capabilities in applicable cases.
C. Evaluation of financial capability To analyze and verify, whenever applicable, the required bank
commitment to provide a credit line to the bidder in the amount specified and over the period
stipulated in the Instructions to Bidders, to ensure that the bidder can sustain the operating cash
flow of the transaction. If the bidder passes in all criteria, he shall be considered post qualified and
the concerned office/agency/corporation shall award the contract to him. If, on the other hand, the
bidder fails in any of the criteria, he shall be considered post disqualified and the concerned agency
shall undertake the same post qualification process on the bidder with the second lowest calculated
bid.

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Module 1 Chapter 1 – Construction Projects

CASE PROBLEM

CASE 1: Bid or negotiate?

Two contractors are pursuing the same client for a dental clinic. The drawings are now 50%
complete. The dentists’ organization knows and trusts both contractors. The first contractor likes the
lump sum market and is encouraging the client to complete the drawings and competitively bid the
project. The second contractor is recommending that the owner allow a select group of contractors
to prepare proposals utilizing a negotiated procurement and GMP pricing approach based on the
drawings as they exist now and save additional architectural fees.

a. Argue the first contractor’s case. What are the advantages to the owner to bid the project? Use
statistics and materials obtained from your courses, textbooks, and outside research to support your
position.

b. Argue the second contractor’s case. What are the advantages to the owner to negotiate the
project? Use statistics and materials obtained from your courses, textbooks, and outside research to
support your position.

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Module 1 Chapter 1 – Construction Projects

References

Fewings, P., and Henjewele, C. (2013). Construction project management: an integrated approach.
London: Routledge
Schaulfelberger, J. (2009). Construction business management. New Jersey: Prentice Hall
Peurifoy, R. L. (2018). Construction planning, equipment and methods (9th ed.). New York: McGraw-
Hill Education
Mincks, W. R. (2017). Construction jobsite management (4th ed.). Australia: Cengage Learning
Soni, S. K. (2016). Construction management and equipment. New Delhi: S.K. Kataria & Sons
A, H., and M, A.O. (2016). Construction Methods and Technology

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