You’re watching your favorite NBA team and the closing moments of the game approach. Excitement builds, the buzzer sounds, and―the opponent wins by three points. You might question the play-calling. You might question the execution, or even the officiating. But the accepted fact is that the team with the higher score when time runs out wins the game. In basketball, the score is the only number that matters.
Public bidding in Wisconsin, and in states with similar bidding laws, is much the same. At the bid opening, the price is the only number that matters. With few exceptions, the low bidder becomes the contractor for the project.
Check out this presentation for more information on how to bid municipal projects to get the best results.
Wisconsin statutes require that public construction expected to exceed $25,000 in cost must be let to the lowest responsible bidder. Municipal officials, often with the assistance of consultants, should work to clearly state their expectations in the bidding documents, and to create a level playing field for potential bidders. By utilizing flexibility and best practices included in the statutes, a community can direct the bidding process toward a successful project.
For better results, communities should think about the following options as they prepare to bid a project.
Requesting that all bidders use a standard bid form is crucial for being able to compare bids. Allowing bidders to bid in their own format makes price and value comparisons difficult. Two common formats are “Lump Sum” in which a bidder provides a single price to construct an entire project, and “Unit Price” in which a bidder provides prices for separate components and/or single units, such as bidding pavement by the square yard, for an estimated total quantity.
Bid alternates allow a way for decisions about the project to be made based on construction cost. An alternate can be awarded if it fits the project budget, or deleted if the project would otherwise be over budget. A material alternate (such as substituting PVC pipe for DIP pipe) can be used to determine if the more desired material is worth some extra cost.
Split the Contract
In Wisconsin, public entities can’t split a contract to avoid bidding, but there are circumstances where it makes sense to bid project components separately. For example, bidding specialty equipment early, then designing the enclosing building to fit that equipment, can reduce overall construction time and cost. Communities can also bid specialty work separately to avoid general contractor markup, but this requires significant coordination efforts from the community.
Wisconsin state statutes clearly spell out a process to limit the pool of potential bidders. This “Proof of Bidder Responsibility” process is commonly known as prequalification. Prequalification adds to the bidding timeline and requires communities to prepare questionnaires and determine qualification criteria prior to bidding, but reduces uncertainties at the time of bid opening.
Advantages of Better Bidding
Throughout the planning stages of a project, bidding is often treated as an afterthought. However, by taking the time to clearly spell out expectations and create a level playing field for bidders, communities and their consultants can improve results. This way, when the buzzer sounds, the low bidder will be prepared to provide your community with a successful project.
For more information about better bidding, contact Teresa Anderson, PE. She leads a municipal engineering team in MSA’s Rice Lake office and has worked in engineering for more than 18 years. She has served as an engineer and/or project manager on a variety of municipal, transportation, and site development projects. Teresa has frequently presented on best management practices for bidding with the goal of helping communities prepare bid documents that lead to positive project outcomes.