Documenting the Details - Changes -  Bidding Phase 1

14m 11s

In this ARE 5.0 NCARB-approved Project Development and Documentation Exam Prep course you will learn about the topics covered in the ARE 5.0 PDD exam division. A complete and comprehensive curriculum, this course will touch on each of the NCARB objectives for the ARE 5.0 Project Development and Documentation Exam.

Instructor Mike Newman will discuss issues related to the development of design concepts, the evaluation of materials and technologies, selection of appropriate construction techniques, and appropriate construction documentation.

When you are done with this course, you will have a thorough understanding of the content covered in the ARE 5.0 Project Development and Documentation Exam including integration of civil, structural, mechanical, electrical, plumbing, and specialty systems into overall project design and documentation.

When we get to the bidding phase and we're trying to figure out exactly what the final scope is of the project, one of the thing that comes up a lot is, we just don't know what the price is going to be. We've said we're going to try to aim it to a certain point, but we just don't have a lot of information about that. And so how do we do that? How do we find a way to sort of get the information that we need? And to get the design idea across that we need, without fully knowing exactly what the price is until we do the bid. But we can't do the bid until we've figured out all of these different issues and given that information across.

So there's sort of a vicious circle on this sometimes. And we have to find a way to be able to have that set of conversations, so that we have enough information that we can have a real conversation with the client and say, here's what we know, this is what we've got from the bids. And we think we can piece together what our final project will be like out of this information. So how do we do that? Well it's typically done with the idea of alternates. So we have a basic idea of what's going on with the project.

And that's clearly delineated in the bid package. But we're going to have different alternates that are going to be added to the bid package. So the bid package might say we have a four story building with an east wing, and a west wing, and a north wing, and that's the package, that's what we want built But, when we look at the alternates, we have a deduct alt, where we say, yes, except we'd also like your price if we deducted the north wing off.

So we just say, that whole wing just goes away. What would the price be at that point? How much could we deduct away? The obvious sort of related way of thinking about it is, we could say, alright our base plan is this idea, we have this building, it's got an east wing, and it's got a west wing. And that's the package, but we also would like to find out about an add alt, an add alternate, where we're gonna say, what if we built the north wing?

Here's what it would look like. What would that extra amount of money be? So it's the same basic idea. It's just two different ways of approaching the information. Sometimes it's valuable to look at it where we're subtracting the information. Sometimes it's valuable to think of it as information added on. So having those alternates, that's a very useful thing to have. It allows you to then say to the client, here's what we think it should be, but we're doing this in order to sort of test the waters. If we get enough information where we can do everything, and still be within the sort of general price range of the client, well great, that's fabulous.

But if not, that at least gives us a few tools to be able to fine tune the project, and be able to still move forward, without having to kind of completely reimagine a whole project. So, the big picture of that, the sort of big possible alternates. These could be great big elements. They could be a lot of little things. There's just a bunch of different ways the alternates could work.

But the gist of that idea is it's allowing one of the ways to sort of fine tune a project. Another way to do that is through the idea of substitutions. So when we start talking about substitutions we're saying, alright we're hoping to get say this level of finish. We really wanna have the titanium shingles, or something like that. And then we realize, well that's probably gonna be pretty expensive. Here's a couple of other substitutions. Can you give us a price?

So here's the overall price with the titanium shingles. And here's the price if we changed it to asphalt shingles. And what would the price difference be? And again that allows the conversation between the architect and the owner to be one where we can fine tune. You can imagine you might have five or six different elements being substituted. And that would allow you to say, well okay, we can't do the titanium, but maybe we can do the gold plated bathroom set, something like that. So it gives us the opportunity to include some of the substitutions.

Not include some of the other ones. To fine tune that process, in order to find the right project for the right price. So hopefully, all of the materials are materials that you would be willing to live with. And that the client would be willing to live with. But that allow for kind of a range of possibilities. So that you can make a final choice that sort of lives with the realities of the costs of thing. Another system for being able to make changes and have some flexibility during the bidding phase, is the idea of the allowances.

So with allowances, we're saying that the contractor will give us an amount of money, that'll just build into their price. An amount of money for a certain topic, before we've made any choices. So this is a way for them to sort of, with their knowledge about how much things cost, and sort of the general range of what sort of pricing possibilities there are. They can say, alright, let's say for light fixtures for example.

You might say, we're gonna give you an allowance of $15,000 for light fixtures for the project. And then that gives the architect and the owner, a sort of a way to sort of adjust and focus their final set of choices. So it doesn't hold back the contractor. People don't have to waste their time waiting for kind of a back and forth. The project can roll forward. Everybody can move forward. The design gets finished.

Everything goes on. The project construction starts. And then somewhere along the way, the architects and the owners can have conversations about, in that case the light fixtures. Where we're choosing light fixtures. We're adding up what we think the costs are going to be. And the costs are higher than that allowance? Then that's clear to the owner if they decide, yeah I get that it's higher, but I understand the difference, and I want to go with these light fixtures. Well then it's clear. But the idea is that that allowance allowed everything to move forward.

So, if you come back and say, if the owner comes back and says, well look we've still gotta meet. We can't go any higher than our overall budget price. And that's the price that they've given us. So we need to be at least at the allowance number or lower. Then we come back with a one that's higher. Well it's clear that we have to find light fixtures that are gonna be cheaper, and that are gonna fit underneath that allowance number. So it's just a simple way of sort of keeping a number in there, so that you don't accidentally say, alright here's our total budget, and by the way, you're going to add in later the light fixtures.

But if you don't put that allowance number in, then the owner is hearing the smaller number, without the light fixtures. And it's sometimes a little tricky to kind of keep in mind, oh I have to remember to add the $15,000 in. So the allowance is a way to sort of just put it right into the total bid. To put it right into the spreadsheet.

So that there it is. There's a number that we're saying, that's what it's gonna cost for those light fixtures. And then, we can either make that work. It's gonna be a little higher. Or maybe it's a place we say, I'll bet we can save some money there. We're not really worried about the light fixtures. So let's bring that price down. We'll try to come in at $10,000 and save 5,000 bucks. So again, it's a way to sort of keep some flexibility, allow various changes to happen, but to keep the process moving forward, and to keep the sort of paperwork in line. A similar idea is the idea of unit prices.

So unit prices are where we say, alright here's our bid form. This is what we want you to bid on. Here's the total amount that we're looking for. Here's the add alts that we have. Here's the way we want you to break it down. Maybe we want you to do it by trade, or by wing of the building, or by floor, or by site versus building, or by shell and core versus the interior tenant spaces, or whatever it is. We give some way of breaking down the bid, so that we can use that for ourselves, in terms of making a final set of decisions.

But then we also say, here's some unit prices that we want you to bid for us. And it might be, let's say, a square foot of carpeted floor. Maybe it's a linear foot of wall type A, and wall type A is a CMU Backup wall, with a brick veneer. Maybe it's a fancy wallpaper. Or a fancy sort of system for a ceiling finish. And we're gonna talk about that per square foot. And that way, when we have it in a room for one of the smaller rooms, we have a certain number of square feet in there.

But we're thinking, well it might be nice to do that through the whole building, but only if we can afford it. We don't wanna make the whole building more expensive, and then have to find ways to sort of subtract it out after. So we just say, alright here's where we're going to do it. But here's what we want. We want you to give us a square foot number for that ceiling finish, or that carpet finish, or that linear cost for a linear foot of that wall type. And then that way, if we make a decision down the road that we say, alright they wanna, they're willing to do this for X dollars a square foot.

And we're a little below budget. Well that sounds great. Let's make more use of that thing that we really like. And we're gonna use more square foot area. So the reason that we do this on the bid form is that the contractor's at the phase of doing the bids are in a competitive mode. And so they are wanting to get the project. And so they're trying to keep their prices low.

If we wait until after we have given them the project, so they've, we've chosen the bidder, we go through the process, and then we say, oh by the way, we're interested in expanding the use of this special material. There's no incentive now, because they've already got the project. So now they're just in the mode of making sure they're covering their costs. So instead of saying three dollars a square foot, or something like that, they might say, four dollars a square foot, or 3.50 a square foot. It's not that they're being mean or bad or anything like that.

Architects would do the same thing. It's sort of a natural thing to do. Is that you're in a certain mode when you're in the trying to get the project, and you're trying to hone and keep, and really be careful about your prices. You're in different mode when you've got the project, and you're sort of making sure everything's covered. And you're making sure you're kind of rolling along, and not accidentally gonna lose money on a project. So, using a different mindset. So that unit price becomes a very useful thing. If we can get those prices nailed down in the bidding phase, then that can be very useful to us later on, when we decide to make some changes down the road through the construction project.

So, if we get a price back, and that price is a good deal, we decide alright, we're gonna go back and revisit some of these issues. Maybe we'll redo some elements, and kind of use some of these unit prices. That's a way that gives you a lot of flexibility for changes, without suddenly finding yourself being sort of thrown to the dogs in terms of how much stuff is gonna cost. Like you actually know how much it's going to cost, before you've even made the changes.

Because it's been worked into the bid package. So unit prices and allowances are sort of a very useful and great way to kind of keep the bidding process rolling along, and allow the project to move forward, but still give enough information that you can make reasonable changes, and document them along the way, and still be able to kind of know what's coming. But you also have to be a little careful. You wouldn't want to do a bid package for a smaller project that had 50 different items that you asked for for unit prices.

It would just be too much work for the contractors. It would turn them off. They wouldn't want the project. Because it would like you didn't know what you wanted, and it would be a lot of work for a bid that they may not even get. And it's just, you're gonna make it so that they wouldn't wanna do it. But, maybe you do it for five different items. Maybe that's enough. I mean you sort of have to really design the bid process, in order for that to make sense.

And then decide well, which items are the ones we're really likely to want to know about? Which allowances would be the sort of useful places to have allowances? I always use the lighting fixtures as an example. But it could be any number of things. It could be the floor finish system. Or it could be the ceiling panels. Or it could be the window manufacturers. Or any number of different things. It's just sort of a way of saying, look, here's an allowance that sort of generally gets you in the ballpark. You can then go up or down from there.

That's a useful thing to be in that package. Or here's a set of unit prices, so okay, if you do decide to go with the more expensive wall in that one situation, well, we can multiply that out and we can figure it out. So all of these are ways of thinking about making changes through that very complicated moment of ending the CD set phase, and about to start the construction phase. It's a lot going on there, and it's hard to keep track of everything.

And so you're trying to find the tools. That would be the alternates, the substitutions, the allowances, the unit prices, all of those things. That's, those are the tools that you keep track of, so that you can create the situation where the changes aren't gonna blow the budget, aren't gonna surprise everybody. They're not gonna do something that puts you into a bad position. They're actually giving you tools, in order to be able to make changes without it causing a big ruckus. So, understanding the process of the bidding.

Very useful to understand the ways that you could make it a little more complicated, in order to get more information. But like I said, if you make it too more complicated, too much more complicated, you're gonna have all kinds of problems. You're gonna have bidders not bidding, things like that. So you're trying to find exactly that right ratio for this kind of project, in this kind of region, in this kind of climate for bids. Does it make sense to get a little bit more information, just to give yourself some tools, to be able to make sure that the bids are gonna come back in some way, that you can mold the situation into a positive process.

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From the course:
ARE 5.0 Project Development & Documentation Exam Prep

Duration: 36h 46m

Author: Mike Newman