Government Construction Work in Town: Cheapest Bidder?

[cityimrov]

I've been wondering about this.  I've always heard this rumor that when building a building - governments are required to choose the cheapest bidder.  I don't know but for some reason, this feels like short, short, short term thinking.   Is this why so many buildings always leak during rainstorms or why roads always fall apart a few years later?    

Is this really true for our city?  If so, why in the world is things done this way?  I miss the old stuff which manage to last hundreds upon hundreds of years - good high quality buildings. 

[CS Foltz]

That was then..........this is now.........newest and best improvement building techniques, plus  "They sure are cheap!

[vicupstate]

Picking the low bidder is the norm in all cities.

Even the lowest bidder should be building to the plans/specs, and their work should be inspected. Being the low bidder is not an excuse for inferior work, because all gov't jobs are low bid for the most part.

[tufsu1]

There is a difference between professional services and things like construction...construction is generally required to take the low bid.

professional servics are just selecting on qualifications and money isn't part of the equation...budgets are either predetermined or negotiated after selection

[Jason]

They are required to take the low bid given that all other minimum criteria are met.  You can be the low bidder but if you don't meet the requirements you'll be cut giving the contract to the #2 guy.  Its up to the contract manager to review qualifications or all RFP bids and apply them to a strict set of criteria in order to award a contract.

Sometimes a scoring system is used where points are given based on past experience, licencing, available workforce, price, etc.  Each category is given a set of points and each category can be weighted differently.  Price, however, is usually the most heavily weighted because the money belongs to the taxpayers.

[cityimrov]

How does this factor in unexpected expectations or unexpected future problems?  For example, we always hear about government projects which go way way way over budget.  If 4th lowest bidder out of 10 bidders thought about all these things and included it in the price while the lowest bidder that met the bare minimum requirements didn't.  I mean, some companies have a better track record for predicting future problems vs others while other bad ones can dot every i & cross every t while doing horrible work.  

What happens if the contractor gives more then the absolute bare minimum to create a better quality facility or they have a better crystal ball then the others?  If a government is forced to take the lowest bidder, how can we take this into account?  

I mean, if the government is spending all day threatening lawsuits just to get the contractor to get the minimum work done - isn't that a waste of time and money?

[Miss Fixit]

How does this factor in unexpected expectations or unexpected future problems?  For example, we always hear about government projects which go way way way over budget.  If 4th lowest bidder out of 10 bidders thought about all these things and included it in the price while the lowest bidder that met the bare minimum requirements didn't.  I mean, some companies have a better track record for predicting future problems vs others while other bad ones can dot every i & cross every t while doing horrible work. 

What happens if the contractor gives more then the absolute bare minimum to create a better quality facility or they have a better crystal ball then the others?  If a government is forced to take the lowest bidder, how can we take this into account? 

That's why the RFPs for these projects are so detailed and require a budget line item for contingencies as well as bonding from the contractor.  The bids are based on city plans and individual contractors should be bidding on ONLY the work proposed in the plans.

[Overstreet]

..........How does this factor in unexpected expectations or unexpected future problems?  For example, we always hear about government projects which go way way way over budget.  If 4th lowest bidder out of 10 bidders thought about all these things and included it in the price while the lowest bidder that met the bare minimum requirements didn't.  ...........

You are under the illusion that a higher price would automatically indicate a higher quality building or better thought out pricing.  None of them are significantly adding quality to provide a better building if doing a lump sum bid.

The low bidder may have left something out or has a line on subs and suppliers that are more efficient and less costly. The low bidder may just have less qualified supervision. The higher bidder may have just put more contingency and/or fee on the project.  Often contractors screw up and make mistakes on the estimate and later the work.

However, all bidders, high or low,  have the same bid specifications to meet and third party test agencies to satisfy as to the quality of the materials. 

The sad truth is that many buildings change as the project progresses. For example,

* Unforeseen subsurface contaminations-- are usually excluded from the construction contract. They often result in change orders. They can be old fuel tanks (TU parking garage), old unmarked land fills (State Health dept lab), contaminated soils (TUPAC), old barges (school board building), or sink holes.  Owner pays......
*building may have piles, caissons, or other deep foundations. Contract is let. Test piles are placed and tested. Soils test poor and more piles and pile cap concrete is added.  Owner pays..........
* Buildings often have allowances that take more money. For example, a UF building may have a 50 cubic yard pressure grout allowance (ug cavities- sink holes). The ground may be full after 500 cy are pumped. Owner pays........
* building finishes have allowances. Owner selects materials, designs, etc above allowance amounts. Owner pays..........
* Although in remodels asbestos is removed by separate contract by the owner additional hazardous material is located .......Owner Pays.........
* No owner can contract a building without changing something. Only 40% of America can read drawings and half of them don't know what they are reading. So they don't know it won't work till they walk into the room. Then they change something. Owner pays.......... The exception is franchises and big box retailers.
*You can tell a government project manager (military and feds especially) something won't work as drawn, but they want it built like the drawings anyway. They always have time to do it over. Owner pays......... 
*owner decides to add a bridge over a street between two buildings. Owner pays....


However, not all government jobs are lump sum bid jobs. Many are CM, construction management (service or "at risk"), and design build. These often have limited pricing and go more on resume and general conditions cost. They are often chosen on "best qualified" like a services contract.

[Bostech]

I think we should do same with politicians.Have them bid for positions,who ever offers lowest at quality work gets a job.

[CS Foltz]

Bostech..............I agree!

[cityimrov]

I still don't get government bidding.  It seems like it brings more trouble then it's worth.   

I mean, look at this: http://seattletimes.nwsource.com/html/businesstechnology/2011392418_russiatanker20.html  "'Bizarre' tanker twist: Russians will bid against Boeing for Air Force contract"  If the Russians have a plane that perfectly fits the requirements and they are the lowest bidder.......in a way, they are pretty much guaranteed the contract. 

If they don't get the contract, then people will say it's a bunch of shady backroom deals.....