Specifications - igor-ovsyannykov-371079

Bonding with the Specs

Specifications, scope of work, the walk-through and bonding are important pieces of any project, large or small.

Before you uncap a highlighter or open up your counting and take-off software, a thorough review of the specifications is critical to your estimate. Also, the scope of work, invitation to bid, and any other information provided should also be reviewed to totally understand the project.

Specs and Scope

The project’s specifications provide the road map to complete your take-off, estimate, and ultimately get to your bid price.

The front end specifications (Division 1) provide general project information that applies to all trades. The responsibility schedule or a scope of work document will detail “who owns what.” Never assume that everything you normally bid is part of the bid package on every project! Make sure to thoroughly understand the scope of work for your trade!

The specifications should also detail the project schedule. Be sure you can meet the deadline. Do you have the labor and equipment to complete the work on time? All over the U.S., contractors are experiencing labor shortages in the trades. Unless you know you can staff the project, you should only bid what you know you can complete.

The project schedule and liquidated damage clause should be reviewed in advance of bidding a project. Liquidated damages could cost thousands of dollars per day! Even when failure to meet the schedule is no fault of your own, you can be held responsible, particularly when you are one of the last trades off the job. When you experience delays due to other trades, always document the situation and put the owner/GC on notice, so as not to be hit with liquidated damages charges.Specifications - igor-ovsyannykov-371079

How important is the walk-through?

Another piece of information included in the front end of the specifications will be regarding the project walk-through. Often the walk-through is mandatory. Regardless, you or a designee should always attend this meeting. Valuable project insight can be gained about job site conditions and restrictions, working access, working hours, parking or materials storage space availability, and even the presence of asbestos.

If the walk-through is mandatory and someone from your company does not attend, your company will not be able to submit a bid. A walk-through also allows you to “see” what may not be shown on the drawings, such as existing equipment, access to the equipment, and general site conditions that may be hard to depict on the drawings. If the walk-through is not mandatory and you cannot attend, consider using a tool like Google Earth to get familiar with the job site. Do you ever wonder what we did before we had the internet and Google?

Let’s Bond

The front-end specs also include bonding requirements — be it bid, performance, or payment bonds. There is a lead time in getting a bond, so the earlier you request one, the better. A bid bond, usually no more than 10% of the project value, is subject to full or partial forfeiture if the winning contractor fails to either execute the contract or provide the performance or payment bonds. A performance bond, also known as a contract bond, guarantees satisfactory completion of a project by a contractor. Finally, a payment bond is a surety bond posted by a contractor to guarantee that its subcontractors and material suppliers on the project will be paid. Any of these bonds can take 3 to 4 working days to acquire. A good working relationship with your bonding company can reduce the lead time tremendously. And, if your relationship is really good, you may be able to arrange to write your own bonds through power of attorney.

Finally, the general contractor or construction manager may require you to carry “extra hours” to be used at their discretion and they may require you to carry allowances for contingent items. Often these are high-ticket items, so you want to make sure to include them in your proposal. More and more often, general contractors, especially larger ones, are including “500 extra hours to be used at their discretion,” feeling that they are pre-buying hours that can be used for change orders at a discounted rate.

Trade Specifications

After review of the Division 1 specs, you should read your trade’s specification section very carefully. Often your trade’s specifications will also refer you to other related specification sections and it goes without saying that you should read those as well. The bottom line is to understand the requirements of the project, and what your trade “owns” relative to the work on the project. As the old saying goes, “the devil is in the details.” If there is a conflict between the specifications and what is shown on the drawings, try to pinpoint a reference within the text that defines what information supersedes other information. You cannot rely on old wisdom that “the specs supersede the drawings.”

For example, the specs may state that outside duct banks shall be run in Schedule 40 PVC. However, a drawing note may state that all duck banks shall be run in galvanized rigid conduit (which costs a lot more than PVC!) If you can’t find a specific reference about what information supersedes, submit a Request for Information (RFI) for clarification. At all times, you want to be sure to cover your costs, yet at the same time, you do not want to cover any unnecessary costs that could unnecessarily inflate your bid price. Whatever you do, always qualify your bid! For example, it could be as simple as “Carried Schedule 40 PVC for all duct banks per specifications. Did not carry GRC per drawings.”

Specs are often considered “boiler plate,” meaning they do not always contain project specific information. And to be truthful, it can get tedious reviewing hundreds of pages of what may seem to be worthless information. For example, for electrical, the contractor will look for wiring methods, fittings required, testing and coordination studies, and the responsibility of providing starters and disconnects. As a general rule, if the project is funded privately, a contractor can deviate from the specifications. However, if the project is publicly funded, each trade will be bidding on “plans and specs,” meaning no deviations from the plans and specifications.

Be aware that specs may include information on systems that are not shown or referenced on the drawings. That doesn’t mean that you shouldn’t cover the cost for these items if they are in your bid package.

A thorough review of the specifications helps you map out the entire bid process and set the stage for the next part of the estimating process — the take-off.

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