Transcript FAR Part 36

CMBOK Section 4.2
Construction and
Architect/Engineer
Introduction
• This is a specialized area of contracting and
there are dedicated 40-hour courses covering
only construction contracting so we will only
scratch the surface.
• Construction contracting and AE contracting are
very different so again we’ll only scratch the
surface.
Key Points
• Construction and AE contracts combined
represent a significant percentage of total
federal contracting.
• Special laws enacted dealing with these
types of contracts
– Miller Act. (requires bonds)
– Davis Bacon Act. (requires payment of
prevailing wages)
– Brooks Act. (Controlling AE services)
Architect Engineering
• What is covered
– Professional services of AE nature as defined by
state law
• Must be licensed or certified to perform
– AE services related to planning, development, design,
construction or alteration of real property
– Other professional services
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Surveying & mapping
Value engineering
Commissioning
Construction phase services
What’s unique about AE
Contracts?
• Qualifications are submitted on a special form
(SF 330 or comparable)
– Annual submittal encouraged
• Proposals are evaluated strictly on technical
merit – no cost data submitted
• Evaluation done by peers (other AE’s) seated on
a permanent or select panel
• Discussions with no less than three firms
– SF330s on file
– SF330 submitted expressly for the project
What’s unique about AE
Contracts?
• Negotiations with highest qualified firm to
establish fair and reasonable price
– CO requests a cost proposal
• May terminate negotiations with highest
qualified firm if unable to reach fair and
reasonable price
• If negotiations fail with most qualified they
may then begin negotiations with #2 then if
that fails #3.
What’s unique about AE
Contracts?
• AE contractor may not be prime construction contractor
– May team with construction contractor for design/build
• Errors and Omissions
– …”A firm may be liable for Government costs resulting from
errors or deficiencies in designs furnished under its contract.
Therefore, when a modification to a construction contract is
required because of an error or deficiency in the services
provided under an architect-engineer contract, the contracting
officer (with the advice of technical personnel and legal counsel)
shall consider the extent to which the architect-engineer
contractor may be reasonably liable. “ FAR 36.608
What is Construction?
• “Construction” means construction, alteration, or repair (including
dredging, excavating, and painting) of buildings, structures, or other
real property. For purposes of this definition, the terms “buildings,
structures, or other real property” include, but are not limited to,
improvements of all types, such as bridges, dams, plants, highways,
parkways, streets, subways, tunnels, sewers, mains, power lines,
cemeteries, pumping stations, railways, airport facilities, terminals,
docks, piers, wharves, ways, lighthouses, buoys, jetties,
breakwaters, levees, canals, and channels.
• Construction does not include the manufacture, production,
furnishing, construction, alteration, repair, processing, or assembling
of vessels, aircraft, or other kinds of personal property (except that
for use in subpart 22.5, see the definition at 22.502).
• Demolition is considered construction
• If contract is mixed construction and other services the clauses used
shall be for the predominant part of the effort.
Types of construction projects
• Design – Bid – Build. Project is conducted
in two distinct phases by two separate
firms with (usually) a separate competition
for the design followed by a (usually
sealed bid) competition for the build.
• Design – Build. Typically done by a team
that proposes a design which is selected
followed by a negotiated price with the
team for the second (build) phase.
General Characteristics of a
Construction Project
• Typically (design-bid-build) bid to a set of plans and specifications
provided by the Government.
– Plans and specs usually prepared by commercial AE firm
• Usually a sealed bid competition
– Government prepares Independent Estimate of cost that is used in
determining “fair and reasonable” price
• FBO Announcement
– 30 day posting required
– Must announce “magnitude of effort” e.g., “between $50,000 and
100,000”
• Usually a fixed price contract
– Lump Sum (for all the work)
– Per Unit basis
– May permit economic price adjustment
• Certain elements are negotiated
– Change orders
– Payment schedule (progress payments)
The Bid Process
• General Announcement
– FBO
– Commercial sources
• Interested bidders obtain a set of plans and specifications
– Electronic distribution / web download taking precedence
– Some ‘old school’ projects will send drawing sets at contractor’s
expense.
• Inspection of site
– Usually accomplished via a scheduled site visit
– May include a bidders meeting with a Question & Answer session
– It is the responsibility of the bidder to be aware of the prevailing
conditions at the site and to understand the requirements of the plans
and specifications before submitting their bid.
• Submittal of bids per FAR Part 14 (Sealed Bids)
• Public Opening and abstracting of bids
• Announcement of low bidder
Contract Issues
• Differing site conditions
• Superintendence of the work
• Specified percentage of work to be
performed by prime
• Bonds (see the “Miller Act”
– Payment Bond
– Performance Bond
– Bid Bond
Other related issues
• Prevailing wages
– Required by Davis Bacon Act
– Department of Labor Wage Determination
sets minimum wages for all laborers
– Contractor must submit certified payrolls
• Anti kickback law (Copeland Act)
Other related issues
• Liquidated Damages. Liquidated damages are
not punitive and are not negative performance
incentives. Liquidated damages are used to
compensate the Government for probable
damages.
– The CO will typically base liquidated damages on a
basis of estimate prepared by the technical manager.