Question 1

"Math Errors at Tender" video - Contract Consideration Series

Accepted Answer

(8m) Sometimes a tender will come in that contains mathematical errors. To avoid having to automatically throw out that tender, the MMCD provides some rules allowing the Owner a limited amount of discretion to make changes. Brian Weeks explains the options available in this Contract Consideration.

Watch this and other Contract Consideration videos on MMCD Association's YouTube Channel.

Question 2

"Using IT-4" video - Contract Consideration Series

Accepted Answer

(9m) Parts 1 and 2 of Instructions to Tenderers apply to the tendering process. Part 1 changes with each project; however, the terms in Part 2 generally do not change - unless they are inappropriate for the project.

Brian Weeks discusses how tender authors can use IT4 To modify, delete or add conditions for tendering to meet the specific conditions of their projects.

Watch this and other Contract Consideration videos on MMCD Association's YouTube Channel.

Question 3

"Force Account Schedules - An Awful Idea" video - Contract Consideration Series

Accepted Answer

(10m) In this video, Brian Weeks hopes to convince you that the MMCD Association got it right when they intentionally did not require tenderers to submit schedules of force account rates as part of the required tender package.

Brian provides a better solution to the problem that prompts Owners to ask for such schedules.

Find out more in this 10-minute presentation, and watch more Contract Considerations videos on MMCD Association's YouTube Channel.

Question 4

What can I do if the bidder adjusts the Schedule of Quantities in the tender?

Accepted Answer

QUESTION

I just opened a tender and [in] one of the submissions [the bidder] redeveloped their own schedule of quantities and submitted it. The regenerated Schedule of Quantities has no titles or identifiers on it at all, except for it was included in the sealed envelope. Some of the descriptions have been abbreviated. What should I do?

COMMENT

MMCD cannot offer legal advice. However, there are resources to help in interpreting MMCD documents and processes.

Para 7.2 Page 7 of 13 Preparation and Award Checklist talks about the appendices, including the Schedule of Quantities and Prices.

In addition https://www.mmcd.net/resources/video-resources/ contains the Contract Considerations video series. "The Importance of the Agreement" and other videos may give some background to the issues.

Question 5

If the Contractor cannot provide the name of a specific subcontractor but lists the work item as being subcontracted out and providing a “to be determined” would this make the tender non-compliant?

Accepted Answer

QUESTION

If the Contractor cannot provide the name of a specific subcontractor but lists the work item as being subcontracted out and providing a “to be determined” would this make the tender non-compliant?

COMMENT

One of the unstated purposes of requiring subs to be listed was to protect subcontractor bidders protection against bid shopping by the general after award. Without those subs being listed, there is no way for the Owner to enable this protection.

Question 6

Although specifically required by the Owner, the tenderer does not include any Subcontractor as the Contractor will be self performing the tasks. Is the tender deemed non-compliant?

Accepted Answer

QUESTION

The Owner specifically asks for the listing of survey, water pipe installation, and landscaping Subcontractors for a tender on Appendix 5 . The tenderer does not include any Subcontractor as they will be self performing theses tasks. Is the tender deemed non-compliant?

COMMENT

It is OK for the Appendix to indicate that the Contractor would do all work components without subcontractors but then the Owner has the ability to enforce that through GC4.11.2. It is not OK for the bidder to leave the appendix blank or add words to the effect "we have not decided yet" or "will be advised later" etc. It was intended that the owner would have information on the subcontractors to use for tender evaluation under IT15.1 and the opportunity to reject subcontractors under IT16. If the Owner has asked for the names of subs for certain parts of the work, then the bidder must provide those or specifically indicate the general contractor will do those portions.

Question 7

If the Contractor does not specifically list any Subtrades, is the tender non-compliant?

Accepted Answer

QUESTION

The purpose of IT 5.8 is so that the Owner has the right to refuse the use of a specific subcontractor.

COMMENT

There is no IT 5.8 in our documents, so we cannot comment on it.

It was expected that if Appendix 5 to the tender was not included then the tender would be non-compliant and the Owner would not be able to accept it. Form of Tender 4.1 confirms the bidder has included all appendices, so if they are not included the tender is incomplete.

Question 8

What options are available to an Owner for negotiating unit prices?

Accepted Answer

QUESTION:

I have a question about how the COVID-19 pandemic may affect material and labour costs of MMCD items – we’ve noticed that some of these items in the tenders we have received during the pandemic have increased in costs by almost double, particularly on materials and related components. On one of our tenders, we are inquiring with the lowest tenderer to provide some background to their pricing for us to determine if increase costs are an effect of the pandemic, or other factors.

The question I have is: what options do we have for negotiating unit prices? I know that we can negotiate quantities, since those are based on estimates, but can you advise on the practice of negotiating actual unit rates and what best practices are, from the MMCDA’s perspective?

COMMENT:

Unless the Owner wishes to modify the standard Instructions to Tenderers, there is no ability to negotiate prices or quantities prior to award. Tender law typically does not permit this - that is the realm of Requests for Proposals. However, Owners have the ability to structure their call by modifying the Instructions to Tenderers in any way they wish.

After Award: Perhaps one idea would be to provide a Supplementary GC which gave the CA the right to require proof of costs "on demand” and/or some kind of price adjustment mechanism if it is somehow proven that there is some price gouging built in. It is not clear whether this is significantly different from bid unbalancing and MMCD currently provides protection against this only when quantities overrun. Possibly normal "competitive pricing" through tendering does not adequately protect the owner from a rogue bidder.

In addition, we have a new “Contract consideration” video available on Covid 19 at https://www.mmcd.net/resources/video-resources/

Question 9

Is a broadly worded privilege clause appropriate in Additional Instructions to Tenderers?

Accepted Answer

QUESTION

I am contemplating the following Additional Instruction To Tenderers and am looking for constructive feedback on whether it is appropriate and if there is any legal precedent for such discretion.

Basis of Contract Award & Acceptance

The Owner reserves the right to award the Contract based on the above pre-requisites and to reject without further consideration, any tender which in its opinion, does not meet the criteria it considers essential for this project.

The tenderer, by submitting a tender, waives any claim or recovery for loss of profits or any prospective damages whatsoever if no Contract is entered into with the tenderer. In no event, shall the Owner be liable for the Tenderer’s cost of preparing and submitting a tender, which shall be done by the Tenderer at its sole risk.

COMMENT

This looks like a “broadly worded privilege clause”, a concept which the MMCDA has discussed and rejected, because we anticipate that this will deter bidders.

However, there is support for s a request for proposals, so that Owners can have flexibility to reject and likely negotiate. MMCD is investigating a RFP template.

Question 10

All tenders received were over budget. Can the project be retendered without alteration to the original tender package?

Accepted Answer

QUESTION

I am looking for guidance on the legalities of retendering a construction project that was previously tendered but all tenders were rejected as the costs were significantly more than the Engineer’s cost estimate and therefore over the allocated budget.

COMMENT

The GCs allow the owner to reject all bids, which they probably should do if they don’t have the funds to proceed.