Facilities Manual
Volume 5: Bidding & Construction Administration
Introduction and Summary
Based on administrative conditions and the estimated contract sum, the University of California uses one of three types of construction documents: the Long Form, the Brief Form, or the Mini Form. This volume of the Facilities Manual explains how and when University construction contracts are bid and awarded, and afterwards, how they are administrated. Conditions prerequisite to contract bidding and award are also discussed. (Facilities Manual, Volume 4, contains the model construction documents and discusses their selection and preparation.)
For references to particular construction documents, this volume cites the Long Form only; therefore, Facilities Manual users should find equivalent passages (when they exist) if another type of construction document is being utilized. (See FM4[II] for tables that list and compare individual construction documents of the Long Form, Brief Form, and Mini Form.)
Purpose of this Facilities Manual volume
This volume of the University of California Facilities Manual contains bidding and construction administration policies, procedures, and guidelines. Content of this volume is not intended as a substitute for detailed bidding and contract administration procedures. Each Facility is encouraged to develop its own procedures manual that expands on and complements this volume.
CHAPTER 1: METHODS OF CONTRACTOR SELECTION
State law and Regents' policy require the University to publicly advertise for competitive bid construction contracts valued above $50,000; however, when a contract is valued below that dollar limit, the contract may be awarded by informal bidding or by negotiated contracting. Federally funded projects may entail more restrictive conditions for competitive bidding.
Competitively bid contracts must be awarded to the lowest "responsible" bidder. "Responsibility" refers to a prospective bidder's ability to satisfactorily perform the work.
The requirement of competitive bidding determines the type of construction documents used. The duration of the bidding period is affected by the contracting mode chosen and the type of bidding required.
CHAPTER 2: BIDDING DOCUMENTS
The bidding documents are prepared by the design professional and the Facility during a project's construction documents phase and are assembled by the Facility. The University has approved the use of three types of construction bidding documents: the Long Form, the Brief Form, and the Mini Form. The Office of the President and the Office of the General Counsel have requested the opportunity to review and approve certain bidding documents before their issuance to bidders.
CHAPTER 3: PREPARING TO SOLICIT BIDS
Before bids can be solicited, basic conditions required by University policies, delegations of authority, and federal and state regulations must be met. These conditions regarding document conformance, availability of funds, and other prerequisites apply to competitive and informal bidding and negotiated contracting.
CHAPTER 4: DETERMINING BIDDER RESPONSIBILITY
A "responsible" bidder is one who is able to satisfactorily perform the work. A contract does not have to be awarded to the lowest bidder if that bidder is not responsible, as determined by the University.
The bid, itself, must also be "responsive"; that is, the form and content of the bid must meet the requirements of the bidding documents. A contract does not have to be awarded to the lowest responsible bidder, if that bidder's bid is nonresponsive.
University procedure is to use (1) standard bidding document requirements, (2) prequalification, (3) qualification, or (4) disqualification to determine the responsibility of a contractor or subcontractor or their intention to bid on University construction contracts.
CHAPTER 5: SOLICITING BIDS
After the conditions prerequisite to bidding have been met, bids may be solicited by using the procedures for competitive bidding or informal bidding. The Instructions to Bidders informs bidders that they must attend a pre-bid conference to familiarize themselves with requirements of the University's Affirmative Action Program and other contract documents.
CHAPTER 6: RECEIVING AND OPENING BIDS
After bids are solicited, they are received and opened by the Facility.
During competitive bidding, bidders must follow strict bid submittal requirements set forth in the Advertisement for Bids and the Instructions to Bidders. The Facility receiving bids must enforce those requirements. A public bid opening conducted by the Facility is one the fundamentals of the competitive bidding process.
As its name indicates, informal bidding is less restrictive than competitive bidding. For example, sealed bids are not required for informal bidding.
Standard procedures for receiving and opening bids have been developed by the University to encourage uniformity among the Facilities.
CHAPTER 7: REVIEWING AND EVALUATING BIDS
After competitive and informal bids have been opened and read, the Facility must review them to determine if they are "responsive." After all bids have been reviewed for responsiveness, the Facility determines the lowest bidder.
Material irregularities in the form or content of a bid affect the bid price or time and give the bidder making the irregularity an advantage or benefit over another bidder. Material irregularities make a bid nonresponsive.
Protests may result from the University's determination that a bid is nonresponsive or from a bidder's claim that another bidder's bid is nonresponsive.
All bids may be rejected if acceptance of the lowest responsible bid is not in the best interest of the University.
CHAPTER 8: EXECUTING AND AWARDING THE CONTRACT
After the lowest responsible bidder has been determined, the bidder is sent the Agreement and other contract documents to execute (sign and return). After the signed documents are returned, the contract is executed by the University, thereby making it valid, and is awarded to the bidder (at this point referred to as the contractor).
Before certain projects can be awarded, concurrent approval by the project funding agency must be obtained.
The Notice to Proceed is a document added to the contract to start construction. The Facility should issue this notice immediately after the contract has been executed unless otherwise stipulated in the bidding documents.
A License for Early Start of Construction allows a contractor to move onto the project site and do preliminary work prior to contract award. This procedure is sometimes desirable and necessary in the interest of time.
CHAPTER 9: BID PROTESTS
Occasionally, a protest will be lodged regarding selection of the lowest bidder or lowest responsible bidder. The required bidder procedures for filing a protest are described in the Instructions to Bidders. The Facility office in charge of issuing the bidding documents must investigate the basis for the protest, hold an informal hearing if deemed appropriate, and issue a written decision within 15 days of receipt of the protest unless factors beyond the University's control prevent such a resolution.
The lowest responsible bidder being protested and the person or entity filing the protest have the right to appeal the Facility's decision regarding the protest to the University's Construction Review Board.
The University is subject to and follows state requirements regarding subcontracting practices. The performance of any portion of the work by a person or firm other than the subcontractor listed in the bid for that portion of the work, without the University's consent, is prohibited. The grounds for consenting to a contractor's request to substitute a subcontractor listed in its bid are strictly limited.
CHAPTER 10: CONTRACTOR SUBSTITUTION DURING THE BIDDING PERIOD
CHAPTER 11: CONTRACT ADMINISTRATION
Contract administration is understood to comprise the duties and responsibilities of the University's Representative during the construction phase of a project, as required by the Executive Design Professional Agreement and the contract documents listed in the construction Agreement.
University policy is to have contract administration performed by either design professionals or by Facility personnel, depending on other administrative conditions.
In addition to the contract administration performed by the University's Representative, the Facility is responsible for administering additional contract duties and responsibilities of the University (The Regents).
Prior to commencement of the work, the University's Representative holds a preconstruction conference to discuss administrative procedures to be followed during performance of the work. The University's Representative is also responsible for reviewing and approving required contractor submittals. During construction, submittals may include the contract schedule, submittal schedule, shop drawings, product data and samples, test reports, and materials and equipment substitution requests. Substitutions which are equal in quality, utility, and appearance to those specified may be accepted, subject to the provisions and procedures specified in the Specifications.
The General Conditions prohibit the contractor and the University from assigning any of their responsibilities under the contract without the written consent of the other party.
The grounds for which the University may consent to a contractor's request to substitute another entity for a listed subcontractor are strictly limited and are based on state Public Contract Code regulations.
The lowest responsible bidder is required to submit, to the University, Certificates of Insurance and bonds required by the General Conditions and Instructions to Bidders.
To prevent the possibility of undervaluation of a building should a loss occur, the Insurance Valuation Form for Property has been developed for submittal to the University Office of Risk Management when alterations, renovations, or additions are made to University-owned buildings or when the University is constructing a new building or acquiring an existing one.
CHAPTER 12: FIELD ADMINISTRATION
Specific persons or entities are assigned the administration of and responsibility for activities at the job site, or "field" level. These activities involve observation, inspection, testing, surveying, progress meetings and project safety.
The Office of Statewide Health Planning and Development is responsible for the enforcement of building standards related to hospital buildings and projects.
CHAPTER 13: CONTRACT MODIFICATIONS
Contract modifications are changes in the work required during construction. The two means of accomplishing these changes are by field order and change order.
The contract time may be extended by the number of days that certain causes or events prevent work from being completed. All time extensions are granted by means of a change order.
CHAPTER 14: PROJECT MONITORING
The extent of needed project monitoring is determined by the Facility. Except for the contract schedule, which is monitored by the University's Representative, project monitoring is mainly performed by the project manager.
The California Labor Code is applicable to certain University construction contracts. The requirements for the payment of prevailing wage rates and the employment of apprentices are defined in the code.
Hospital projects require special monitoring to meet Office of Statewide Health Planning and Development requirements and to meet other hospital-related construction requirements set forth in the Specifications.
CHAPTER 15: CONTRACTOR PAYMENTS
Prior to the first Application for Payment, the contractor is required to submit to the University's Representative a breakdown of all costs that constitute the contract sum. The University will pay the contractor monthly an amount equal to 95 percent of the cost of the work in place; the remaining 5 percent is held as "retention." However, after 50 percent of the work is completed, if University finds that satisfactory progress of the work is being made, University may make any of the remaining progress payments in full.
If the contractor fails to complete the work within the contract time, the contractor is assessed as "liquidated damages" and not as a penalty a sum specified in the Agreement for each day the work remains incomplete beyond the expiration of the contract time.
CHAPTER 16: CLAIMS RESOLUTION
The General Conditions provide procedures for resolving contractor disputes. The University's Representative is required to review change order requests and render a decision on the request. Mediation, arbitration, or litigation may follow this decision. Continuous negotiation is required throughout the dispute process.
CHAPTER 17: BENEFICIAL OCCUPANCY AND SUBSTANTIAL COMPLETION
Certain procedures must be followed when the University wishes to occupy or use part of the work before it is completed. Such occupancy is referred to as "Beneficial Occupancy."
Substantial Completion means that stage in the progress of the work when the University's Representative determines that the work is complete and in accordance with the contract documents except for completion of minor items which do not impair the University from occupying and fully utilizing the work for its intended purpose.
CHAPTER 18: CONTRACT CLOSEOUT
The contractor is required to submit as-built documents to the University's Representative as a condition for final payment and the release of retention. When the University's Representative determines that the record documents are complete, and the design professional has stamped and signed the documents, they are delivered to the Facility. Completed record documents provide a record of the project as it was actually constructed.
The University's Representative is also responsible for receiving operating and maintenance data from the contractor and for collecting required guarantees.
Final Completion is determined to be when the University's Representative finds that the work is fully completed and in accordance with the contract documents. The Facility must file a Notice of Completion within 10 days after Final Completion.
When the work is found to be complete, the contractor makes a final Application for Payment. The University's Representative then issues a final Certificate for Payment constituting final acceptance of the work by the University.
CHAPTER 19: PROJECT CLOSEOUT
When each capital improvement project is completed, and the account containing the project funds is closed out, the project budget is amended as required to show actual costs in each category.
The contractor is required to correct defective work that becomes apparent during the progress of the work or during the Guarantee to Repair Period. The Guarantee to Repair Period is usually a period of one year commencing with the date of Substantial Completion, the date of Beneficial Occupancy, or the date of Final Completion, as applicable. If desired, the Guarantee to Repair Period may be specified for a period of time longer than one year.
The state civil code establishes specific obligations of the contractor to correct defective work, that is, patent and latent defects.
CHAPTER 20: PROJECT QUALITY MANAGEMENT PROGRAM
The goal of the construction phase of the Project Quality Management Program is to ensure that the construction of a project meet the quality requirements established by a Facility. To accomplish this goal, facilities management personnel must perform the following functions for the project team to ensure the desired quality of the constructed project:
- Establish requirements
- Build teamwork
- Supply resources
- Evaluate performance.