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ing out the terms of his proposal or contract. A statement, made in the proposal, that he has thoroughly examined the site, and that he comprehends the plans and specifications has, perhaps, a tendency to make a bidder cautious about bidding on work without this careful preliminary investigation.
(d) Date for completion.
(i) If it is absolutely essential that the work be finished on a certain date, this date (preferably not the corresponding period of time) may be printed in the proposal form.
(ii) If the date of completion is relatively unimportant, a blank space may be provided in which each bidder may propose his own date. This makes the comparison of bids difficult. Who shall say, for example, whether A's bid to do the work for $5000 within ninety days is more or less favorable than B's bid to do it for $4000 within six months? This difficulty has sometimes been met, with greater or less success, by assigning an arbitrary money value to a day.
(iii) It is probably better, if the element of time is not a vital consideration, to ignore it altogether in the proposal, inserting later a definite and reasonable date in the contract, when it shall be executed.
(e) Note that certified check (or other form of earnest money) accompanies.
Here the bidder states:
(i) That security for a certain amount and of a certain form accompanies his bid.
(ii) That if his bid is accepted and he refuses to sign the contract within the required time he is willing to forfeit the security, otherwise it is to be returned to him (not, of course, until the successful bidder has signed the contract). () Agreement to furnish security.
The bidder here makes a statement as to the nature of the surety bond he intends furnishing in case his bid is accepted. The amount has perhaps already been fixed for him (see Art. 13) either as a percentage of his bid or as a definite sum.
The proposal should be signed by the bidder (the principal) and the signature witnessed. In some instances an acknowledgment before a notary is required, and some require that the bidder mention in his proposal the names of any subcontractors to whom he proposes letting portions of the work.
17. Specimen Proposal.*
Itemized Proposal for
The undersigned hereby declare that.... ... the only person
interested in this bid; that it is made without any connection with any person making another bid for the same contract; that the bid is in all respects fair and without collusion or fraud; and that no official of the State, or any person in the employ of the State, is directly or indirectly interested in the bid or in the supplies or work to which it relates, or in any portion of the profits thereof.
The undersigned also declare that he ha carefully examined the annexed form of contract and specifications and the drawings therein referred to, and will provide all necessary machinery, tools, apparatus and other means for construction, and do all the work and furnish all the materials called for by said contract and specifications and the requirements under them of the State Engineer, for the following sums, to wit: (Then follow the itemized amounts.)
... will commence the work on or before. ... 19 and will progress therewith to its completion on or before
19 in accordance with the terms of the contract. Accompanying this proposal is a draft or certified check for $
being 5 per cent of the amount of the proposal. This money shall become the property of the State if in case this proposal shall be accepted by the State through the Superintendent of Public Works the undersigned shall fail to execute
* (Slightly condensed from N. Y. State Canal proposal form, 1907.)
a contract and furnish the surety required by the law within the time fixed; otherwise the said money is to be returned to the undersigned.
Signature of person, firm or corporation making the bid.
The full names and addresses of all persons interested in this bid as principals are as follows:
18. Presenting the Proposal. — The proposal is put in a sealed envelope, properly addressed and endorsed. Accompanying the proposal, often not sealed with it but put in another envelope, are:
(a) The certified check (or other form of security required to insure the signing of the contract).
(6) (Sometimes.) The written consent of the bondsmen to serve as such.
(c) (Sometimes.) An affidavit as to the financial standing of bondsmen offered. This is called the “Justification of Sureties,” and is not commonly necessary if surety is to be furnished by a reputable bonding company.
The student should realize that the making of a proposal and its acceptance constitutes the consummation of a contract. Why, then, require a certified check ?
Suppose the successful bidder refuses to enter into contract, must he necessarily lose his certified check ?
19. Awarding the Contract.
(a) Contracts for private work may of course be let to any bidder, and the other bidders' only cause for complaint would be the trouble and expense to which they might have been put.
(b) State and other laws require in relation to contracts for public work, either:
(i) That the work be let to the lowest bidder (sometimes qualified by the phrase "if at all”). Under such a law it would be possible for the lowest bidder to enter suit if the contract were awarded to another.
(ii) That the work be let to the lowest responsible bidder. From the Engineer's viewpoint the latter is much the better plan, and should be followed where the laws permit. It is impossible to “coax first-class work from a third-class contractor,” especially if he has taken the work at a low figure. Work let to an irresponsible contractor generally proves to be decidedly annoying to the Engineer and costly to the Owner. On the other hand, the indefiniteness of the word “responsible” leaves a loophole for unscrupulous officials. 20. Lump Sum and Unit Prices.
(a) Where the work to be done can be classified under a very few items and the exact quantities of each can be readily ascertained in advance, provision may be made for a contract based on an all-inclusive or lump sum figure. Where, however, there are many items and the quantity of work under each cannot be precisely foretold, unit prices will be simpler.
(b) Both would ordinarily involve about the same total cost, also the same amount of labor on the part of the Engineer. Each method has been used on important work. Unit prices are perhaps in more general use on large contracts.
The first contract for building the New York City subway ($35,000,000) was let on a lump sum basis; unit prices prevailed on the New York State barge canal contracts; while New York State highway contracts have been based on bids in which lump sum and unit prices were combined.
Which method of payment (lump sum or unit prices), and why, would be suitable in the case of a large and important dam? the superstructure of a steel bridge? several miles of railroad construction?
21. Unbalanced Bids.
(a) It is not necessary in a contract based on unit prices that the quantities under each item be measured in advance with precision. Carelessness in this respect on the part of the Engineer may, however, lead to the annoyance and extravagance of “unbalanced bids." *
Illustration: Suppose that it were required to make a certain deep excavation amounting to 5000 cubic yards, in connection with the grading of a tract of land. The Engineer in asking for bids based on unit prices states that they will be compared on the basis of his estimate that the excavation consists of 4000 cubic yards of earth and 1000 cubic yards of rock. When the bids are opened it is found that they compare as follows: Estimated Quantities
B's Bid 4000 cu. yds. earth..
$0.50 $2000 @ $0.05 $ 200 1000 cu. yds. rock.
@ $3.00 3000
and the contract is awarded to B, whose bid is the lower, computed on the basis of his unit prices. Suppose further, that it is discovered as the work progresses that the relative amounts of earth and rock have been incorrectly estimated in advance and that when the work is finally completed B is entitled to payment as follows:
3000 cu. yds. earth at $0.05.
$6150 or nearly twice his original figure.
It is readily seen that had the proportions of the two materials been known at the time the bids were compared, A's would have totalled as follows: 3000 cu. yds. earth at $0.50.
$1500 2000 cu. yds. rock at $1.50
and the contract would have been awarded to him. The Owner therefore paid, assuming that A's unit prices were fair, $1650 more than the work should have cost.
Major Gillette says (Engineering News, 1907, vol. 57, p. 588), “Public treasuries have been robbed of untold millions by this simple device.”