I have a public project where bids came back 13.5% above the engineer's estimate. Only 2 bidders and both were above engineer's estimate and they were within 7% of one another. The public agency wants to redesign (value engineer) the construction documents to save this 13.5% about $700,000 and award the contract with these new "Issued for Construction" drawings. Is this allowed or is new bidding required? Can public agency issue construction documents that aren't the bid plans?
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Issued for Construction Drawings for Public Contract
- Thread starter rcspiel
- Start date
Short answer...Yes.
If they award the contract to the selected contractor under the premise that the project is over-budget and that changes will be necessary to get the cost down (I hate the term "value engineering" since it doesn't usually involve engineering and there's rarely any value consideration made other than to reduce costs), then they can negotiate with the contractor. Here's where the design "rub" takes place. Suppose through their cost cutting process they decide to do something that you as the design professional do not agree with. You will have to make it clear to them that you will not sign/seal permit documents for such. They will get all pissed off at you and possibly terminate your contract. I hope you have good terms and conditions in your contract that allow you to maintain control of your drawings.....otherwise they'll use them and likely get some other design professional to accept them as his/her own (not legal in most jurisdictions in the US, but it happens).
The public agency was not very bright to put a hard budget on an engineering estimate. We do not use the term engineering estimate in our work. The reason being is that "estimate" implies a greater accuracy (like a bid) than the engineer intends. We use the term "engineering opinion of cost", since opinions cannot be held to the same accuracy standard as "estimates".
Good luck.
If they award the contract to the selected contractor under the premise that the project is over-budget and that changes will be necessary to get the cost down (I hate the term "value engineering" since it doesn't usually involve engineering and there's rarely any value consideration made other than to reduce costs), then they can negotiate with the contractor. Here's where the design "rub" takes place. Suppose through their cost cutting process they decide to do something that you as the design professional do not agree with. You will have to make it clear to them that you will not sign/seal permit documents for such. They will get all pissed off at you and possibly terminate your contract. I hope you have good terms and conditions in your contract that allow you to maintain control of your drawings.....otherwise they'll use them and likely get some other design professional to accept them as his/her own (not legal in most jurisdictions in the US, but it happens).
The public agency was not very bright to put a hard budget on an engineering estimate. We do not use the term engineering estimate in our work. The reason being is that "estimate" implies a greater accuracy (like a bid) than the engineer intends. We use the term "engineering opinion of cost", since opinions cannot be held to the same accuracy standard as "estimates".
Good luck.
- Thread starter
- #5
Thanks for your opinions. A couple things: 1. We provided an "engineering opinion of probable cost" to the city; city interprets it as "engineer's estimate".
2. There are some good reasons for the bids coming back higher than estimate- city didn't do themselves any favor in the sequence of bidding. They decided to let the building contract(rehab of old industrial building) before the sitework contract and both are to coincide for substantial completion. Contractors were aware of this 3. A lot of times change orders over a certain amount need to be approved by local agencies and as a resident engineer, I need to check a box on whether the change is "germane" to the contract. Is a savings of $700,000 germane if bidder 2 would be the low bidder with the change order? I think DBE requirements will still be met. Since public money is involved with this contract, I am just wonder what the most ethical solution to this is? Thanks.
2. There are some good reasons for the bids coming back higher than estimate- city didn't do themselves any favor in the sequence of bidding. They decided to let the building contract(rehab of old industrial building) before the sitework contract and both are to coincide for substantial completion. Contractors were aware of this 3. A lot of times change orders over a certain amount need to be approved by local agencies and as a resident engineer, I need to check a box on whether the change is "germane" to the contract. Is a savings of $700,000 germane if bidder 2 would be the low bidder with the change order? I think DBE requirements will still be met. Since public money is involved with this contract, I am just wonder what the most ethical solution to this is? Thanks.
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