Practice Exercises
Design without Compromise and the Bid Package
Scenario:
You are working with a private foundation to design offices for its national headquarters. The board of directors agrees in principle with your vision of an environmentally sustainable building, although board members voice some concern about additional up-front costs related to certain features. You believe it is better to send the project out for bid with the sustainability design concepts fully intact and to deal with the inevitable compromises and value engineering later. The bids arrive and they are, to your client’s dismay, much higher than anticipated. In a letter, the board expresses profound disappointment in your leadership and professional advice. The letter contains the veiled threat of a lawsuit. You learned in school that a project needs a strong design concept to withstand the inevitable erosion that is part of getting a building built. In this case, though, your strategy for getting the project past the bidding stage without compromise seems to have backfired.
Assignment:
In a letter to your client, communicate what you can do to salvage the project and your relationship with the client. Does AIA Document B101ª, Standard Form of Agreement Between Owner and Architect, offer any guidance?
Consider questions such as these:
- Should you revise the drawings at your own expense?
- How might you have structured the contractor selection and/or bid package to deal with what you now realize is a very unpredictable bidding environment?
Share your work with a supervisor or IDP mentor and make any necessary changes.
Exercise #2 Beginner
REBAR CONSTRUCTION REVOKES ITS BID
Scenario:
Three weeks after the public bid opening for a public parking garage project, Rebar Construction informs you and your client that its bid contains an error significant enough to raise the price above that of the next lowest bidder. Based on your previous experience with the contractor, you suspect that Rebar has obtained another, more lucrative contract, and that it is concocting the error to get out of the parking garage job. Rebar insists that it made an honest mistake and cannot be held to the bid.
Assignment:
Review AIA Document A701, Instructions to Bidders. Prepare a memorandum to the client addressing the following questions, and explain the reasoning behind your answers.
- Should Rebar be held to its original bid?
- Does Rebar need to prove that they made an honest error?
- Should the contractor be allowed to adjust the bid?
- Should Rebar be liable for the cost of the difference between its original bid and the next lowest?
- How would you frame the options for the client, and what are the potential consequences of each course of action?
Share your work with a supervisor or IDP mentor and make any necessary changes.
Exercise #3 Beginner
ALL IN THE FAMILY
Scenario:
The bids are in for a high-end condominium project for which you have provided architectural services. The selected contractor identifies the landscape irrigation system supplier for the project—it is your sister-in-law’s firm. “Not such a big deal,” you think at first, as her company has over 15 years of experience in the field, but it is a large contract.
Assignment:
Review AIA Document A501ª/AGC 325, Recommended Guide for Competitive Bidding Procedures and Contract Awards for Building Construction. Write a report to share with your firm principal that answers the following questions and explains your reasoning.
- Is there a potential conflict of interest?
- The appearance of a conflict of interest?
- Should you disclose your relationship to the subcontractor?
- Should you formally object to your sister-in-law’s firm as the supplier? Or is it better to say nothing?
- What legal, ethical, and practical issues should you address and how should you record them?
Share your work with a supervisor or IDP mentor and make any necessary changes.
Alternates and the Over-Budget Project
Scenario:
Your client, Green Valley Center for the Performing Arts, has been planning a new facility for nearly ten years. The budget has always been tight, and the scope of the building program ambitious. It includes a theater, recital hall, dance studios, classrooms, and numerous ancillary facilities that will combine to make this the premier performing arts institution in the region. Unfortunately, about 24 months ago fundraising began to lag because of a slow regional economy, and you had to place the project on the shelf. But now Green Valley is back—they have achieved their fundraising goals and are ready to put the project out to bid. You are impressed by their perseverance, but you have to tell them that the local construction market is now bustling, and the bidding climate does not look favorable. You expect the bids to come in high, perhaps as much as 20 percent higher than you would have anticipated two years ago.
Assignment:
Determine how the bidding package could be structured to help the clients realize their dream. Explain in a memorandum to your client about how the bid package might be restructured using alternates to successfully select a contractor. What are the major strategies you would suggest to your client? What other cost savings could you recommend to them?
Exercise # 5 Intermediate
Bidding Procedures Ð Public vs. Private
During the bidding process there are procedures that must be strictly adhered to. These procedures are often very clear and somewhat scripted for public works.
Assignment:
Research the public bidding process within your jurisdiction. Interview a project manager within your firm about bidding procedures for private sector work. Write a report comparing and contrasting the two types of procedures. Be sure to note what procedures are consistent across both areas of bidding. Include which process you believe is better and why.
Share your work with a supervisor or IDP mentor and make any necessary changes.
Exercise #6 Intermediate
PULLING THE PLUG ON THE ELECTRICAL SUB
Scenario:
The contractor for a publicly bid state correctional facility project has submitted a list of subcontractors for the job. You feel compelled to object to one of them, Flicker Electric. In your experience, Flicker bids low and tries to make up the difference in change orders. The company often complains about lack of coordination among the architectural and engineering drawings and specifications. They have delayed more than one job because of their unreliability, and they have a penchant for damaging the work of other subcontractors and then denying responsibility. The owner, Will Flicker, is unpleasant, and you would like to avoid working with him. The problem is that eliminating Flicker will almost certainly raise the base bid above that of the next bidder.
Assignment:
Write a memorandum to the contractor that rejects Flicker Electric, while protecting your firm from liability and preserving the integrity of the public bidding process. Be mindful of specific pitfalls you must avoid in discussing your objection, specifically, inaccuracy, subjectivity, and hyperbole.
Share your work with a supervisor or IDP mentor and make any necessary changes.
Exercise #7 Intermediate
BIDDING ERROR ON THE UP AND UP?
The following case was adapted from Barry Wasserman, et al., Ethics and the Practice of Architecture (John Wiley & Sons, 2000).
Scenario:
You are hired by a small city to provide design and construction administration services for a new elementary school building. Knowing that the $1.2 million budget for the project is tight, you work with the client to provide maximum flexibility to adjust the scope of the project by including two additive alternates and five deductive alternates. Five contractors bid on the project, and the bids are announced in public at your office. Representatives from all five bidders are present. The lowest bidder is Sound Construction. It is awarded the contract on the basis of its base bid; even with the additive alternates, Sound Construction is the lowest bidder.
The next day, Sound Construction calls to inform you that its electrical subcontractor has made a serious error, omitting the cost of light fixtures. The total error is $20,000, enough for Sound Construction to seek to add the amount to its original bid. Without the addition, Sound will have to withdraw its bid entirely. Even with the additional $20,000, Sound Construction’s bid is still be the lowest. Your firm has worked with Sound Construction before, and you believe the company is honest. You have never worked with the second lowest bidder.
Assignment:
Prepare a recommendation letter to the client summarizing the situation and answering the following questions. Be sure to explain the reasoning behind your answers:
- Should Sound Construction be allowed to adjust its bid? Provide reasons.
- Should you tell Sound Construction that its bid cannot be changed or withdrawn?
- Should you declare the lowest bid invalid and force the owner to accept the second lowest bid which would obligate the owner to pay more for the project?
- What ethical considerations, if any, are due to the bidders?
- How does the fact that this is a publicly bid project complicate the decision?
Share your work with a supervisor or IDP mentor and make any necessary changes.
Exercise #8 Intermediate
THE LATE BID
Scenario:
At precisely 12:01pm, the municipality of River City, Iowa commenced with the opening of bids for the construction of a new library. All bids were due exactly one minute earlier at noon that day. At 12:10pm, one of the local contractors, Harold Hill of Hill Construction, burst into the hearing. Apologizing for his tardiness, Mr. Hill handed his sealed, opaque envelope to the city official who was opening the bids and reading them aloud. “There was a rehearsal of the marching band blocking Main Street, just as I was approaching City Hall,” he explained. The city officials and Marian, the librarian, look to you for guidance. You sense an impending lawsuit from Hill if you recommend disqualifying his bid, or from the other contractors if you do not.
Assignment:
What is your advice to River City, and what specific legal and contractual points support your position? Write your answer in the form of a pre-emptive letter to your attorney.
Share your work with a supervisor or IDP mentor and make any necessary changes.
ARCHITECT’S ROLE IN A COMPLEX FACILITY DESIGN
Scenario:
Your firm is interviewing to be the project architect for a complex research and development lab facility for a manufacturer of small internal combustion engines. The program includes testing labs equipped with dynamometers and computers to test engines under a wide range of ambient temperatures and other stress-inducing conditions. Alternative fuel mixes and combustion air will be delivered to the engines through an extensive piping system. Large air handlers and elaborate ducting are necessary to exhaust emissions. Because of the requirement of full computer integration and the potential for an explosion, this project will be a major engineering and systems integration challenge throughout design, construction, and commissioning.
The requirements of the project exceed your technical expertise. In fact, you would be working as a consultant to the construction management firm that will have primary responsibility for bidding of the project, selection of subcontractors and suppliers, and construction. You are concerned about ceding so much authority to the construction manager because you want to ensure the overall architectural quality of the project. Still, you realize the architectural aspects of the project should be closely coordinated with the technical systems, lest those systems compromise the architecture in ways that will become known only after construction is underway.
Assignment:
Under a traditional design-bid-build delivery approach using AIA Document A201ª, you are afforded certain leverage to maintain the architectural integrity of the project, such as right to object to a subcontractor or supplier. In a letter to the client, argue for and propose a strategy to provide you a strong voice during the bidding process.
Share your work with a supervisor or IDP mentor and make any necessary changes.
Exercise #10 Advanced
EXPANDING PROJECT DELIVERY SERVICE OPTIONS
This exercise has been removed.
Exercise #11 Advanced
FOUL PLAY FOR FAIRWAY BIDDERS?
Scenario:
The bids are in for a new clubhouse for Fairway Golf and Country Club. You sit down with the building committee to review them. To your surprise, the committee announces its intention to award the contract to the third lowest bidder. This contractor has had a long-standing relationship with the one of the club’s wealthiest members. The board members admit that they had always planned to hire the contractor but proceeded with competitive bidding to keep the costs down and “keep him honest.” They say that selecting one of the other contractors would create a “political problem” at the club. You recommended the other contractors on the basis of your experience with them, and they participated in the process under the assumption that they were competing on a level playing field.
Assignment:
Despite the results of the bid, the client chooses their “political connection”. Prepare a communication piece to the unsuccessful contractors. Keep in mind, you will most likely have to work with them in the future and need to maintain your firm’s good relationship with them, as well as remain in good standing with the current client. The communication piece will undoubtedly generate questions. As part 2 of this assignment, prepare a briefing for your firm principal that includes the following:
- Background information on the situation
- To what extent will your association with this episode damage your reputation with contractors you may work in the future?
- Is there anything you might say to the other contractors to redeem your reputation?
- Is there anything you could you have done to avoid this problem?
Share your work with a supervisor or IDP mentor and make any necessary changes.
