ProSoundWeb Community

Please login or register.

Login with username, password and session length
Advanced search  
Pages: 1 [2]  All   Go Down

Author Topic: Future proofing your bid..  (Read 4413 times)

Duane Massey

  • Hero Member
  • *****
  • Offline Offline
  • Posts: 2189
    • http://www.ozknozz.com
Re: Future proofing your bid..
« Reply #10 on: July 20, 2008, 12:26:00 pm »

I think the bottom line is to do what you can to protect yourself AND your clients, but make sure you at least plan ahead.

Hal, the large deposit should be used to purchase the gear and store it, unless the contractor is an optimist.......
Logged
Duane Massey
Houston, Texas, USA

Jason Lavoie

  • Hero Member
  • *****
  • Offline Offline
  • Posts: 896
Re: Future proofing your bid..
« Reply #11 on: July 20, 2008, 03:56:30 pm »

Duane Massey wrote on Sun, 20 July 2008 12:26



Hal, the large deposit should be used to purchase the gear and store it, unless the contractor is an optimist.......


absolutely.. it's one thing to come back to your customer about something that is unavailable or discontinued, but if you had the money to buy it and reserve it months ago then you look pretty stupid if you have a supply issue later.

Jason
Logged

Brad Weber

  • Hero Member
  • *****
  • Offline Offline
  • Posts: 2477
Re: Future proofing your bid..
« Reply #12 on: July 21, 2008, 08:38:15 am »

As I mentioned, reasonable Change Orders are totally appropriate and most projects I work on have a process defined for addressing them, including for cost escalation.  Simply saying that product availability and/or pricing are subject to change with no limits, conditions or process defined is too open ended ot be acceptable.

In a competitive bid situation it is important that all bidders are bidding on the same basis.  You do not want some bidding with no escalation clause and others with greatly varying terms and conditions and this makes it very difficult to compare bids.  I'm used to how to address escalation often being covered in the bid documents including identifying the conditions under which changes to the Contract are allowed (types of changes, amount of change, documentation required, etc.) and the conditions for any change to the Contract (basis for cost and so on).  If your work is part of the Prime Contract (the contract for the building), then you probably want to look at the General Conditions defined as they will often have specific terms and requirements and you may be bound to them.  I have such documents for a 2 year plus long project (3 years plus from ground breaking) in front of me and some of the language Hal noted would conflict with what is specified (for example, the spec language places more onus on the Contractor to be proactive regarding product availability), so it is critical to read these documents and be responsive.  Bidding something that is conflicts with the specified terms and conditions may make your bid non-compliant.

Purely personal perspective here, but I believe that it is difficult to argue that an escalation clause like that Hal noted is equitable.  Beyond not being clear if the 3% noted is for individual line items or the overall contract cost and the vagueness of the phrase "by an amount reasonably necessary to cover any such significant price increases", if there is an escalation clause to cover cost increases then shouldn't there be a corresponding way to address any comparable cost decreases?  A change is a change and while it may not be as common, what I find interesting is that even when there were significant price drops or a Contractor received pricing lower than expected or a product was unavailable and the accepted substitution cost less, I don't think I have ever seen an Owner received a credit because the costs decreased from what was proposed unless I pushed for it.  I personally have no problem protecting the Contractor but if they want protection from the risks of cost increases, they should also be willing to share the benefit any cost decreases.  If they want to keep all the benefits of all cost decreases, then they should bear the risk of all increases.  Simply put, from the perspective as an Owner advocate, in order to be equitable to both sides I think changes to the Contract amount due to product availability or cost changes should not be limited to escalation but should cover any cost changes, including decreases.

Jason Lavoie wrote on Sun, 20 July 2008 15:56

Duane Massey wrote on Sun, 20 July 2008 12:26



Hal, the large deposit should be used to purchase the gear and store it, unless the contractor is an optimist.......


absolutely.. it's one thing to come back to your customer about something that is unavailable or discontinued, but if you had the money to buy it and reserve it months ago then you look pretty stupid if you have a supply issue later.

I agree.  It is also not the Owner's fault if the Contractor does not test a product when it was received and then when installed months later it is DOA and the replacement will cost more due to cost increases or discontinuation.  Or because a Contractor waited until after a known upcoming price increase to order a product.  This is exactly what I mean by having some terms and conditions that place some limits and responsibility for providing a reasonable effort to avoid.
Logged
Brad Weber
muse Audio Video
Pages: 1 [2]  All   Go Up
 

Page created in 0.056 seconds with 20 queries.