Friday,
REMINDER: all these blogs' references to construction manager are to the particular form of construction management services being used on public school building construction in which the work of the project is bid by “work packages” directly to the school district.
The school's project has been advertised for bids and a date and time for opening of the bids have been accepted.
Under the traditional design-bid-build method, general contractors deliver their complete bid documents, along with bid bond and qualifications, to the school board. The bids are opened publicly and, if no errors or discrepancies are in evidence and the bids are within budget, the school board meets with the architectural firm and awards the contract to the lowest bidder. A contract is signed and construction begins.
Under the construction management method, subcontractors bid multiple work packages on the date and time set for the opening of bids. Subcontractors may submit bids for a single work package or multiple work packages, with bid bonds to cover the amount of work being bid. When the bids are opened, it is not immediately apparent which subcontractors are the low bidders on the work, as the overlapping bid packages will have to be analyzed. Also, some work packages may have only one bidder, while others may have several. The lowest bidder on one work package may not be the lowest bidder if another bidder has combined that work package with other work packages. Work packages that are combined may or may not break out the separate work packages, and a subcontractor may refuse to do only one work package when he has submitted a combined bid.
When a work package has only one bidder, the project is typically not rebid, as it would be if there were only one general contractor bidding. Instead, the construction manager "analyzes the bids" and decides which subcontractors to offer contracts on behalf of the school district. This system gives the construction manager a great deal of leverage to select favorites among the subcontractors. Those subcontractors who have bid one work package, were lowest bidder on that work package, yet lost the contract due to "gamesmanship" with multiple work packages refuse to bid again on this type of contract, reducing the pool of bidders even further.
If there is no bid for a particular work package, the school district has additional decisions to make. Will it allow the construction manager to select a subcontractor from among those bidding and make this work a change order; will they rebid just that work package, what other options are there? In practice, this rarely happens, because the CM knows in advance which work packages are likely not to be bid, and usually which subcontractors are bidding which packages. In today's market, very few construction firms exist as only one entity. In practice, one of the CM's “related" or "friendly" firms will bid multiple bid packages to be sure that everything is covered. This is one reason that many subcontractors avoid bidding public projects under this type of management.
Next: the contracts and the work.
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