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 • • • • 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.