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Project Advertisement, Bid Review, and Request for Concurrence in Award

Project Advertisement, Bid Review, and Request for Concurrence in Award

After the environmental and design work
for your Federal-aid project is complete and you’re ready to bring in a
contractor to build the project, you should consider the following
questions: * “Are there specific rules for advertising
my project?,” and * “How do I analyze bids in order to choose
a contractor?” Let’s focus on the answers to these
questions, and the associated requirements you must adhere to before your Federal-
aid construction contract can be awarded. These requirements help preserve a
competitive environment for bidding, ensure fair and open competition, and
ultimately maximize the use of Federal-aid funds. After your oversight agency authorizes
the use of Federal funding for construction, your first step is to find a
contractor to do the work. This is typically referred to as
advertising the project, meaning you publically or electronically announce
your intent to solicit bids for a construction contract. Under normal circumstances, you advertise
the project for a minimum of three weeks to provide sufficient time for
contractors to assemble and submit bids. The solicitation must specify the
exact day and time the advertisement period closes in the announcement. All contractors must submit their
completed bid packages to you by the official “close” of the
solicitation period. After that date and time, bids can no
longer be accepted or changed. Just after the close of the
advertisement period, you open the bids and read aloud or publicly share the
list of bidders and their bids, and identify which is the
“apparent” low bid. Advertising and opening bids according
to these requirements help to maintain credibility and transparency
among the bidders and the public. Now that the bids have been opened, it’s
time for you to analyze the apparent low bid is acceptable and meets all
requirements. You need to consider four primary
Factors: * Is the bidder considered responsible? * How do the bids compare to the
engineer’s estimate? * Is the big considered responsive? * Was there adequate competition? The first question to consider in your
analysis is: “Is the bidder responsible?” A responsible bidder is one who is
physically organized and equipped with the financial means to undertake
and complete the contract. A responsible bidder is also one that
is not suspended or debarred, or whose business ethics have not been
otherwise determined to be inadequate. The Federal Government maintains a
list of all parties, called the Excluded Parties List System (EPLS), that have been suspended or debarred. You have a duty to ensure that the
contractor is not listed on the EPLS before awarding a
contract to that entity. Some agencies use a prequalification
process to help determine responsible bidders. However, prequalification should not
be used to restrict competition or discourage otherwise responsible bidders
from submitting a bid. The next question to consider is: “How do the bids compare to the
engineer’s estimate?” Local Public Agencies, or LPAs, must
develop and use an engineer’s estimate for analyzing bids. You use the engineer’s estimate as the
benchmark to compare against all bids. This estimate reflects the amount you
consider fair and reasonable, and are willing to pay for the
performance of the work. As you analyze the apparent low bid,
you should pay close attention to any irregularities associated with either
an individual item or the overall bid. An irregular bid is when the apparent
low bid differs from the engineer’s estimate in a manner that appears unreasonable. Irregular bids play a key role in
the decision to reject or award a contract. Pay special attention to unbalanced
bids and consider the potential for savings if the project is
re-advertised. There are two types of unbalanced bids: * A mathematically unbalanced bid
contains lump sum, or unit bid items that do not reasonably reflect the actual
costs to construct the item; * A materially unbalanced bid
creates reasonable doubt that award to that bidder would result in the
lowest ultimate cost to the Government. You should consider rejecting an
unbalanced bid when it cannot be reasonably explained, or if you have a reasonable doubt that
it would result in the lowest overall cost to the Government. If you detect an unbalanced bid, contact your State for assistance, as these issues are typically handled
case-by-case. Also, if at any time you believe
collusion or bid-rigging among bidders has occurred, report concerns directly to your nearest
U.S. Department of Transportation Office of Inspector General. Your next question should be: “Is the bid
responsive?” A responsive bid is one that meets all
the requirements of the advertisement and proposal, meaning all bid-related paperwork or
electronic forms are completed and signed. Your solicitation must clearly
identify these requirements, which the bidder must comply with
in order for the bid to be deemed responsive. Among the reasons a bid may be
considered non-responsive are: * Not signing the bid in ink (or not supplying a valid electronic
signature where electronic bidding is used), * Failing to include the required
certification statements, * Not meeting specified prequalification,
or bonding and insurance requirements, and * Failure to commit to the project
Disadvantaged Business Enterprise, or DBE, goals or failure to demonstrate good faith
efforts in attempting to commit to DBE goals. Your last bid review-related question to
consider is: “Was there adequate competition?” Receiving only one or two bids may
or may not justify re-advertising the project. The number of bids received is a complex
issue that depends on many factors, including bidder interest in the work, location of the work, and
current market conditions. When you have concerns with the adequacy
of competition or the number of bids for your project, contact your State Department of
Transportation to help you determine if re-advertising the
project is appropriate. At the conclusion of the analysis, your goal is to confirm the apparent
low bid is a responsive bid, submitted by a responsible bidder
for contract award. You must obtain concurrence for your
decision from your oversight agency before officially notifying a contractor
that its bid was either selected for contract award, or rejected. Submit your written request for
concurrence in award to the State Department of Transportation, who will either
act on your request or forward it to the Federal Highway Administration for
approval, depending on who has oversight of the project. In support of your request, you must summarize the results of your
bid analysis and highlight any irregularities that may be identified. Your summary must include the bid
tabulations of the project, showing bid item details for at least the low
three acceptable bids and the total amounts of all
other acceptable bids. Don’t forget to include a statement
that identifies which bid you are recommending for contract award. Once you have received the written
concurrence in award, this becomes your authorization to notify the
contractor of award and enter into a contract
for construction. If you enter into a contract BEFORE
receiving written concurrence in award, the result can mean losing all
Federal funds for the project. Awarding a construction contract to a
responsible contractor who submits the lowest responsive bid is one of the most basic tenets of
Federal-aid contracting. These requirements help preserve a
competitive bidding environment to provide the lowest cost to the
Government for projects. Contact your State DOT if you
have questions about advertising, analyzing bids, or requesting concurrence in award
of your a Federal-aid contract.

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