Construction Management

Construction Management basics. Learn what every Construction Manager must know, from
laws, regulations, management techniques, and much more. This section is divided per category
including schedules, economics, contracts, laws, regulations, and single details that will make
you a better Construction Manager.
Contracts

Construction contracts discuss from A to Z. Everything that a construction contract covers is

right here explained and discussed.

Contract Basics

Contract Documents

Contract Types

Design Build Contracts

Lump Sum Contracts

Sub-Contracts or Direct Hire

Construction Insurance

Every construction project and builder must have plenty of construction insurances to provide
the owner with a tool on which he can rely upon.

Construction Insurance

Builder's Risk

Performance Bond

Hold Harmless Agreements

Liability Insurance

Professional Liabilty Insurnace

Flood Insurance

Estimates and Bids

A good estimate might open contract opportunities for you and your company. Helpful bid tips,
estimating softwares, bidding tips and solution to common mistakes are covered under this
section.

Construction Bids

Avoid These Common Mistakes

Bid Bond

Bids on Government Projects

Estimating Software

Bid a Commercial Project

How to Protest a Bid

Construction Insurance

Every construction project and builder must have plenty of construction insurances to provide
the owner with a tool on which he can rely upon.

Construction Insurance

Builder's Risk

Performance Bond

Hold Harmless Agreements

Liability Insurance

Professional Liabilty Insurnace

Flood Insurance

List of Construction Insurance

Construction insurances are required on every single construction project.
Construction insurances can provide coverage for material, risks, natural disasters,
employees and even your own business. However, the insurance industry along
with the construction industray are always looking to comprehend and provide the
latest coverage on every single and unique situation. Here you will find the most
common insurances used in the construction industry
1.Liability Insurance Coverage

Liability Insurance

Liability insurance will protect contractors, home builders and remodelers against injuries,
accidents or property damage suffer on the job. While working on construction projects, workers
can accidentally damage a property mishandling materials and tools, or while remodeling
process is under way.

Common business standards require you to provide evidence of construction liability insurance
before repairing or remodeling homes. Sub contractors also are required to present their
evidence before entering or starting their participation in a construction job.
Residential Building

This insurance is essential on the home building business, because sometimes homeowners may
want to sue contractors for damages occur during the construction process. Or in the event of
injury, workers may want to file litigation against the homeowner or contractor. Having good
construction liability insurance protects builders from lawsuits or when they suffer loss
from unexpected conditions.

Your contract must required every sub to have expedited their own liability insurance and having
you exempt of responsibility from any damage that they might produce during the construction
progress. The amount of the liability insurance is directly related to the amount of money that the
contractor is executing, and it is recommended to have an insurance coverage of two or three
times the amount of construction project budgets.
Commercial Contractors

Usually commercial contractors are expected to have multi-million insurance coverages,

allowing covering any related injury or damage due to the construction. Normally, commercial
contractors with higher risk of damages, for example, roofing contractor, or contractors who
perform on high specialized trades are the ones with the biggest insurance coverage. Indemnity
corporations charge policy holders a modest down payment and monthly fees to finance
premiums over six months to a year.
Limits on Liability Insurance

Construction liability insurance has also its limitation. You must set limits per each occurrence
and limits for aggregated values. Limitations are also set for fire damage to property under
construction as well as medical expenses for injured workers on the jobsite that might not be
covered under workers compensation. Covered damages also include liability for personal and
advertising injury; that is litigation produced from claims that the contractor's promotional

advertising in someway caused the homeowner or other interested party to incur a financial or
personal loss. No matter how large or small the job, in the building trades, having adequate
insurance against liability is always the best policy.
2.What is Builders Risk Insurance?

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Information of coverage and exclusion of the Builder's Risk

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By Juan Rodriguez
Construction Expert
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Construction Categories

Construction Management

Information About Diffferent Construction Materials-

Information Related to New Construction Projects

Latest Technology Trends for Builders

Construction Inspection Tips and Regulations

Government Requirements for Contractors and Builders

Tips, How-To's and Hints on Remodeling

History and Planning Behind Great Construction Projects

Tools and Resources for Construction Professionals

Tips for Builder and Contractors

Construction Design

Glossary

Blog

Construction Management

Home Builders Information

Construction Industry: Tips and Hints

Updated Articles and Resources

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What is Builders Risk Insurance?

Builders Risk Insurance, people also refer to it as Course of Construction, is some kind of
property insurance. It's a form of insurance, which covers a building where the building is
presently being constructed. It can cover just the structure, or also the materials on site waiting
to be installed or transported to the job site.
The builder's risk insurance policy will pay for damages up to the coverage limit. The limit must
accurately reflect the total completed value of the structure (all materials and labor costs, but
not including land value). The construction budget is the best source for determining the
appropriate limit of insurance.
Builders Risk insurance policies can often be written in terms of three-months, six-months, or
12-months. If the project is not completed by the end of the initial policy term, it can often be
extended, but usually only one time.

What Does a Builder's Risk Covers?

The builders risk policy will provide coverage for damage done to the insured structure from a
wide variety of events. Damage from the following events will be covered by most policies:

Fire

Wind (may be limited in coastal areas)

Theft

Lightning

Hail

Explosion

Vandalism

Vehicles/Aircraft

You should read your course of builder's risk insurance policy to be familiar with its limitations
and exclusions. Limited coverage is provided for collapse. Standard exclusions include:

Earthquake

Employee theft

Water damage

Weather damage to property in the open

War

Government action

Contract penalty

Voluntary parting

Mechanical breakdown

An important exclusion which should be read in its entirety excludes coverage for damage
resulting from faulty: design, planning, workmanship and materials. Earthquake and flood
coverage may be purchased in some areas.

Extensions of coverage may be provided for certain situations. The coverage for these may be
limited.
Common builder's risk insurancecoverage extensions include:

Property in transit

A coverage extension to protect your property from loss while being transported to the
jobsite.

Scaffolding

Coverage is extended to apply to scaffolding, construction forms and temporary

structures, but only while they are at a location you have reported.

Property in temporary storage

Property that will be used or installed in the secured location and pertaining to the insured
company.

Fire department service charge

When the fire department is called to save or protect covered property from a covered
cause of loss.

Debris removal

The builder's risk insurance policy will pay your expenses to remove debris of covered
property. This debris must result from a loss that is covered under this form.

Sewer and Drain Backup

Water damage from the back-up of sewers and drains is usually covered.

Valuable papers (site plans, blueprints, etc)

Important Notes
Some additional information that you should know:

The insurance will not cover the property of others.

Sub-contractors are required to have their own insurance.

There is no coverage for tools or equipment.

No coverage for liability.

It does not cover accidents in the job site.

Usually coverage ends when the building is completed, or occupied.

The premium for the annual policy is fully earned.

3.Performance Bonds

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Performance Bonds guarantee for the satisfactory completion of a project. This will require
having a collateral property or investment to back up the requirements of the surety agency. A
performance bond is usually issued by a bank or an insurance company, both of which act as a
surety.
Performance Bonds: How They Work?

The Government requires performance bonds and payment bonds for projects to protect the tax
payers investment. The private sector also requires the issuance of performance bonds. Common
performance and payments bonds for government projects consist of building bridges and roads.
If the contractor does not completion the project specified in the contract the surety bonding

company will either pay for the completion of the project or hire a contracting firm to
complete the project.
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Construction Insurance

Construction Categories

Construction Management

Information About Diffferent Construction Materials-

Information Related to New Construction Projects

Latest Technology Trends for Builders

Construction Inspection Tips and Regulations

Government Requirements for Contractors and Builders

Tips, How-To's and Hints on Remodeling

History and Planning Behind Great Construction Projects

Tools and Resources for Construction Professionals

Tips for Builder and Contractors

Construction Design

Glossary

Blog

Construction Management

Home Builders Information

Construction Industry: Tips and Hints

Updated Articles and Resources

Free Email Newsletter

Let About.com send you
the latest from our
Construction Expert.
You can opt-out at any time.
Please refer to our privacy policy for contact information.

Lawrence Sawyer/E+/Getty Images

Performance Bonds guarantee for the satisfactory completion of a project. This will require
having a collateral property or investment to back up the requirements of the surety agency. A
performance bond is usually issued by a bank or an insurance company, both of which act as a
surety.
Performance Bonds: How They Work?

The Government requires performance bonds and payment bonds for projects to protect the tax
payers investment. The private sector also requires the issuance of performance bonds. Common
performance and payments bonds for government projects consist of building bridges and roads.
If the contractor does not completion the project specified in the contract the surety bonding
company will either pay for the completion of the project or hire a contracting firm to
complete the project.
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Performance Bond

Bail Bond Companies

Surity Bond

Payment Bond

License Bond

A performance bond will protect the owner against possible losses in a case a contractor fails to
perform, or is unable to deliver the project as per established and the contract provisions.
Sometimes the contractor defaults or declares himself in bankruptcy, and then in those situations
the surety is responsible to compensate the owner for the losses. Such compensation is defined
as the amount covered under the performance bond.
Payment from the performance bond is available only to the project/property owner. No one else
can make claims against it. In order for a performance bond to be effective, the contract must be
specific about the work to be done. A contractor cannot be held accountable for vague
descriptions that are open to interpretation.
Performance Bonds Benefits

Performance bonds ensure that:

The owner of a project is assured of the completion of the project.

The owner does not need to incur additional costs.

There are also some drawbacks with the Performance Bonds. The drawbacks of performance
bonds are:

Sometimes, the surety tries to establish that the owner did not comply with
the technical conditions of a bond to avoid paying the compensation.

Sometimes the surety will try to prove, that the owner may have to settle
for the least expensive remedy to the problem.

The owner needs to quantify the losses that might have been suffered
when a trader or contractor fails in their performance.

If the owner underestimates the losses and the future cost of the completion
of the project, the owner may not be able to recover the shortfall from
the surety.

Performance Bonds Requirements

Surety and financial institutions have different requirements depending on the capacity of the
contractor, the volume of the project being ensured and the projects challenges. Usually they ask
for the following:

At least two years of CPA prepared financial statements.

Copy of the contract that is being awarded.

Application of the surety.

If you own real estate, it will help you and will accelerate the process.

4.Hold Harmless Agreement

A hold harmless agreement is a contract clause typically found in construction
contracts . The Hold Harmless agreement is commonly provided by the
subcontractor to the contractor, builder, or others related professionals insuring
against all work being executed by the subcontractor. The provisions under a
Hold Harmless agreement will minimize the risk of being part of a
litigation or allow you to pursue a claim for indemnity if a subcontractor or any of
his employees sustain an injury.

A hold harmless agreement clause in a contract document should have a specific language to
protect the contractor or the intended parties. The agreement must include provisions to neglect
any kind of claims, damages, losses, expenses or any other cause of action to the contractor, if
any type of problem or dispute arises in the construction project.
The hold harmless agreement protection will vary depending on the jurisdiction that the
contract is being executed. In some cases, the hold harmless agreement will protect the
contractor from claims brought by corporations or companies not forming part to the agreement.
Three Basic Types of Hold Harmless Agreements

There are three basic types of Hold Harmless Agreements in the construction industry: Broad
Form, Limited Form and Intermediate Form.
1. Broad Form
The subcontractor being insured, assumes all related liability for accidents, its own
negligence, general contractor negligence and the combined negligence between
contractor and subcontractor. This is not the recommended form of agreement due to its
broad responsibility terms, and many jurisdictions prohibit this form of hold harmless
agreement. In some cases to validate this type of agreement, the subcontractor must
finance its own liability with an additional insurance policy.

2. Intermediate Form

Under this form of agreements the sub contractor assumes all liability for accidents and
negligence. The subcontractor is responsible for his related actions and will not be
held accountable for the general contractor's accidents or negligence. This is one of the
most common used types of hold harmless agreement. It is not dependent on whether it
was subcontractor's fault or not, it only depends on whom was executing the accident or
who was acting in a negligent way. In the case that both parties were negligent, the
subcontractor will be held responsible for his actions and will be liable for his actions
and omissions.
3. Limited-Form
In a hold harmless limited-form agreement, the subcontractor will be held accountable
only for the accident or negligence but on a limited form. The subcontractor will
assume liability only to the proportional part of what was his responsibility. This type of
agreement will limit the liability of the subcontractor only to his responsibility, and will
include other, under their respective hold harmless agreements for their corresponding
part of the accident or negligence.
5.What is a Bid Bond?
What is a Bid Bond?

A bid bond is important to show proof of guarantee to the project owner that you can comply
with the bid contract and also that you can accomplish the job as laid out in the contract. A bid
bond is a guarantee that you provide to the project owner stating that you have the capability to
take on and implement the project once you are selected during the bidding process. Normally,
project owners do not know if a contractor is financially stable or has the necessary resources to
take on a project. However, because of a bid bond, they will be more comfortable to award a
project to a contractor knowing that if the project fails, they can collect compensation from the
surety bond.
What Happens if the Construction Bond Obligation is Not Met?
If the bid bond obligations are not met, the principal-usually referring to the contractor- and the
surety are liable for the bond jointly and severally. There are penalties that apply for failure to
comply with bond obligations. The principal and surety are liable on the bond for any additional
costs the owner incurs in selecting and awarding another contractor. This usually is the difference
in dollar amount between the low bid and the second low bid. The penal sum of a bid bond
often is ten to twenty percent of the bid amount.

How Bid Bonds Work

Requesting a bid bond will keep contractors from submitting frivolous bids, because they would
be obligated to perform the job, or at least pay the bond premiums. Bond-issuing companies
perform comprehensive credit and financial reviews before agreeing to provide bonds for a
company. During bidding, various contractors estimate what the job will cost to complete. They
submit this price to the owner in the form of a bid. This usually means that the bonding company
will pay the owner the difference between the lowest and next lowest bid. Sometimes, the
bonding company may sue the contractor to recover these costs. The possibility of lawsuits
depends on the terms of the bond.
Bid Bond Requirements

Under the Miller Act, which is still the standard today, all bidders are required to submit bid
bonds on any federal project. Many private firms have copied this trend to protect themselves
from risk during the bid process. Getting surety bond is very important if you want your
company to become competitive in the construction industry. In some localities, a surety bond is
required so you can obtain licenses and permits. Most importantly, almost all project owners
and developers will require a bond from you before you can bid on their projects.
Federal surety bond requirements may be met in different ways:
Surety bonds issued by an approved corporate surety.
Surety bonds issued by an individual surety that pledges certain defined types of assets.
Individuals may act as sureties to satisfy bonding requirements on federal projects if they have
acceptable assets in the required amounts to support the bonds. To support bonds issued by
individual sureties, agencies may only accept:
Cash.
Marketable assets.
Letters of credit from a federally insured financial institution.
Acceptable assets include cash or certificates of deposit; U.S. agency securities;
stocks and bonds traded on the New York, American and other exchanges, among
others. There are also unacceptable assets. These assets are those that may be
difficult to liquidate, like a life estate in real property, jewelry, individuals surety
home, and several others.
Flood Insurance

Flood Insurances are typically covered by the National Flood Insurance Program. A flood can be
considered a general or temporary condition occurring on two or more acres of land, or affecting
two or more properties. Flood insurances typically have a queue of 30 days, before entering its

coverage period, to avoid insurance solicitations only when a flood event is expected. Floods can
occur in the following forms:

Tidal Water

Overflow of inland water

Unusual accumulation of runoff water

Mudflows

Water exceeding normal levels

Flood Insurance Mandatory Requirements

Flood insurances are required on high risk areas as determined by the NFIP, and strongly
recommended on moderate-to-low risk areas. However, flood insurance is limited on
basement and areas below the lowest elevated floor depending on the flood zone and date when
it was built. Limited coverage might also be suggested on crawl spaces, enclosed areas
beneath elevated buildings and other low-lying areas.
Flood Insurance Coverage

Flood Insurance claims average over the last ten-year period have been over $30,000. Flood
insurance policies are dependent on several factors but most of them will cover damage to your
property and personal belongings. For businesses, Flood Insurance will pay up to $500,000
for the building and $500,000 for the contents.
Building Property

The building and its foundation

Mechanical and electrical components

Home appliances

A/C units, heating equipment

Permanently installed wall divisions

Blinds

Debris Removal

Carpet floors

Flood Insurance Limitations

As any insurance, Flood Insurance coverage has also some limitations that you must know,
before starting a new insurance period.

Damage or moist that could have been avoided by the building owner.

Currency, money and stock certificates

Items located outside the covered structure

Temporary housing expenses

Economic loss caused by business interruption

Estimates and Bids

A good estimate might open contract opportunities for you and your company. Helpful bid tips,
estimating softwares, bidding tips and solution to common mistakes are covered under this
section.

Construction Bids

Avoid These Common Mistakes

Bid Bond

Bids on Government Projects

Estimating Software

Bid a Commercial Project

How to Protest a Bid

1.Bids: Looking for Construction Bids?

Bids: Looking for Construction Bids?

Bids and bidders are needed. The federal government is looking for all types of construction
companies to bid on their construction projects. Many of the projects required to have a small
business, local contractors, minority contractors, and tribal firms among others. But how do you
get into that kind of business?
We will present some of the most common resources used in the construction industry to get
bids, request for proposals and request for qualification for several of opportunities waiting for
you. The majority of the projects go out to bids starting on June through September, when the
fiscal year comes to an end.
Bids:Initial Requirements

As a contractor, you must prepare a business plan, containing the ideas on how you are going to
sell your services, complete list of offerings, financial data and support documents that will
complement your knowledge in the industry. Your local small business administration office, can
help you on the preparation of your business plan. Remember is not only your experience, you
also need some financial backup.
If you are starting a new company or havent done the IRS registration, you must enlist and get
an employee identification number (EIN, Federal ID Number), this is a requirement if you want
to bid on federal or government projects.
Apply for a Dunn & Bradstreet number (also called D&B or Dunns). This register is necessary if
you want to get listed in the Central Contractor Registration (CCR), to the government. You
control the accuracy of your business information and it will be accessible to all Federal agencies
with which you do business. You have access to update your information whenever necessary.
Annual renewal is required to remain active. Many agencies will use this system for payment and
contract formation purposes.
Furthermore, you might want to register with ORCA. ORCA is an e-Government initiative that
was designed by the Integrated Acquisition Environment (IAE) to replace the paper based
Representations and Certifications (Reps and Certs) process.
Finally you can also select your NAICS code. The North American Industry Classification
System (NAICS, pronounced Nakes) was developed as the standard for use by Federal statistical
agencies in classifying business establishments for the collection, analysis, and publication of
statistical data related to the business economy of the U.S.
Bid Sources

Once you got all your initial requirements ready and filled out, then you must start looking for
bidding opportunities and construction bids. Here is a list of common places where to find bids,
proposals, and solicitation information.

FBO- This is a free service. You have a good bit of flexibility in setting up your
firm's profile. They also have an automatic notification system that, given
your parameters, will send an email with projects that fit your requirements
and inform you of the bids and new construction going out.

PTA Centers- They provide a wealth of information and technical assistance.

They are a local resource available at no or nominal cost that can
provide assistance to business firms in marketing products and
services to the Federal, state and local governments.

Daily Journal of Commerce- The daily journal of commerce will list

the local opportunities available for you to bid. The DJC provides news
and public records for local business professionals in the industries of
construction, architecture, engineering, commercial real estate and law.

There are also other sites that will require you a subscription sometimes for a small amount of
money that will email you with the latest information depending on your requirements and
parameters, such as:

Gov Directions - It is inexpensive and accurate.

ONVIA- This website track, analyzes and reports the spending of more than
89,000 federal, state and local government agencies, giving companies a
single source for conducting open, intelligent and efficient business with
government.

Finally, one last source is the input from friends, colleagues and other
professionals to get bids and solicitation announcements.

Bids: Common Bidding Errors and Recommendations

Here are some common errors found when bidding construction projects. There are other
items that you must also consider on a bid like: overhead percentage, mobilization, warranties,
experience, fill-in every line on the bid form, contingencies and allowances. Remember the key
to a successful bid is a mix of experience, performance and remember to follow the instruction
to bidders.
1. Bid Error: Arithmetic

Common bidding errors on calculation and using the wrong scale will lead you to the most
common error when placing a bid. Recommendation: Use bidding software or an electronic
calculator with a recording tape. Remember always to double-check quantities and pricing.
2. Bid Error:Improperly Pricing
Verify the quantities and supplies needed; check if the bid requires a lump
sum or a unit price. Recommendation: Pay special attention when reading the
instruction to bidders.

3. Bid Error: Incorrect Allowances

Allowing too much or too little amount to perform a job might send a signal to the owner or the
manager that something on your bid is wrong. Recommendation: Prepare a detailed proposal
for the allowance and prepare a complete take-off for this job. Present the number as requested in
the proposal, fixed price, unit price, lump sum, or per instructed.
4. Bid Error: Incorrect Units
Check the schedule of values to verify if they are requiring the bid on a lineal feet,
yards or meter unit. Recommendation: Double Check and prepare a separate list
with the requested units
5. Bid Error: Labor Rates

Labor rates vary widely from jurisdiction to jurisdiction. Some projects require you to comply
with Davis-Bacon Act, local union salary rates, among others. Recommendations: Consult local
business, laws and other reliable resources to get the correct rates and how to incorporate them to
your bid. Special attention must be given to overtime rates.
6. Bid Error: Unfamiliarity With Project Site

Huge mistake! Some contractors present bid by merely completing a take-off from construction
drawings. Recommendation: Complete a Due Diligence assessment and verify that field
conditions are represented on construction drawings.
7. Bid Error: Transportation Costs

That huge piece of steel or that unique material must be transported by train, plane, of overnight.
Request a quotation for the delivery of the material and plan its delivery. Broker costs or special
taxes might add up to unexpected quantities. Recommendation: Prepare a logistic plan of when
and how the material will be transported. Remember to provide specific or realistic date and stick
to that quotation as long as you can.
8. Bid Error: Regulations

Every jurisdiction has a local or state code that must be followed. Sometimes these codes request
for special equipment or additional pieces that were not part of the initial bid. Recommendation:
Hire or consult a local expert that will help you on the assessment of the construction codes
9. Bid Error: Quality

Sometimes contractors tend to work in certain ways, but specific regulations might require to
bring specialized contractors, even licensed contractors, to perform a job. When bidding be sure
that every requirement is being met, and that the proposed workmanship is appropriate.
Recommendation: Look for high specialized items under the contract and request a quotation
from specialized contractors, this will guarantee that you will be in compliance with all requested
labor quality.

10. Bid Error: Minor Items

Minor items tend to present major costs. Sometimes a bid proposal will not require presenting a
bid number for waste disposal, or even scaffolding; but be aware that adding these little costs can
lead to a significant portion of your bid total. Recommendation: Analyze and list all necessary
equipment to perform a job, no matter how small that equipment can be or how short its usage
will be.
3.What is a Bid Bond?
What is a Bid Bond?

A bid bond is important to show proof of guarantee to the project owner that you can comply
with the bid contract and also that you can accomplish the job as laid out in the contract. A bid
bond is a guarantee that you provide to the project owner stating that you have the capability to
take on and implement the project once you are selected during the bidding process. Normally,
project owners do not know if a contractor is financially stable or has the necessary resources to
take on a project. However, because of a bid bond, they will be more comfortable to award a
project to a contractor knowing that if the project fails, they can collect compensation from the
surety bond.
What Happens if the Construction Bond Obligation is Not Met?
If the bid bond obligations are not met, the principal-usually referring to the contractor- and the
surety are liable for the bond jointly and severally. There are penalties that apply for failure to
comply with bond obligations. The principal and surety are liable on the bond for any additional
costs the owner incurs in selecting and awarding another contractor. This usually is the difference
in dollar amount between the low bid and the second low bid. The penal sum of a bid bond
often is ten to twenty percent of the bid amount.
How Bid Bonds Work

Requesting a bid bond will keep contractors from submitting frivolous bids, because they would
be obligated to perform the job, or at least pay the bond premiums. Bond-issuing companies
perform comprehensive credit and financial reviews before agreeing to provide bonds for a
company. During bidding, various contractors estimate what the job will cost to complete. They
submit this price to the owner in the form of a bid. This usually means that the bonding company
will pay the owner the difference between the lowest and next lowest bid. Sometimes, the
bonding company may sue the contractor to recover these costs. The possibility of lawsuits
depends on the terms of the bond.
Bid Bond Requirements

Under the Miller Act, which is still the standard today, all bidders are required to submit bid
bonds on any federal project. Many private firms have copied this trend to protect themselves
from risk during the bid process. Getting surety bond is very important if you want your

company to become competitive in the construction industry. In some localities, a surety bond is
required so you can obtain licenses and permits. Most importantly, almost all project owners
and developers will require a bond from you before you can bid on their projects.
Federal surety bond requirements may be met in different ways:
Surety bonds issued by an approved corporate surety.
Surety bonds issued by an individual surety that pledges certain defined types of assets.
Individuals may act as sureties to satisfy bonding requirements on federal projects if they have
acceptable assets in the required amounts to support the bonds. To support bonds issued by
individual sureties, agencies may only accept:
Cash.
Marketable assets.
Letters of credit from a federally insured financial institution.
Acceptable assets include cash or certificates of deposit; U.S. agency securities;
stocks and bonds traded on the New York, American and other exchanges, among
others. There are also unacceptable assets. These assets are those that may be
difficult to liquidate, like a life estate in real property, jewelry, individuals surety
home, and several others.
4.Bid Tips - Government Projects
Bid Tips on Government Projects

These bid tips will increase your opportunity to be contracted. If your bid proposal doesnt have
the correct ingredients or is poorly targeted, you will be eliminated from competition, without
being able to bid fairly with other contractors. Avoid these bid errors when making your
proposals for government projects.
1. Bid Language. Remember, being simple will allow you to get benefits, contract and bid doors
will be open for you. Keep it simple, avoid confusing language, and be straight to the point,
present facts not ideas. The wording that you use will be the key for someone to keep reading
your bid or to put it aside. Dont use long sentences and paragraphs, its distracting and probably
the reader will lose all connection with your idea.
2. Dont Risk Current Projects. Sometimes you will bid on something that, maybe you cant
complete or don't have the available personnel to do it. Make sure and convince your reader
using past projects or past experiences that you have the necessary skills to do it. You will
then re-focus on gather resources to the new project while your other projects will be left
unattended from you or your staff.

3. Credit Cards. Actually many government agencies makes transactions using credit cards, and
sometimes is a requirement on the bid proposal, for you to present evidence that you can be paid
using plastic.
4. Using Incorrect Bid Units. The most common mistake. Bid what they ask you in the units
they are requiring to do so. Sometimes they require you to submit a bid price for linear feet,
instead your past experience has allowed you to quote based on linear meter. Dont use meters if
they ask for feet. It may appear like a mistake, but it can cost you, and present the image that you
are not careful.
5. Clean bids. Imagine, if your bid is a mess, what can they expect from you in a project? Check
every piece of paper not only in the front but also in the back, your papers should be neat and
clean, and remember to number the pages and bind everything. Remember every piece of paper
is justified and has one specific purpose.
6. Agencies need. Don't discard any agency just because of their name. You will get surprised to
know all the requirements needed from some agencies, it might sound strange but dont close the
doors.
7. Bid your skill. Instead of presenting vague or general ideas of your business, nail the proposal
by answering specific requirement solicitations. Present specific ideas on how to solve the
problem, what would you do and how would you do it.
8. Bid Time. Time is essential. Every bid proposal has a deadline that you must meet. Failing
to do so will let you out of business immediately. Dont wait until the last moment to send your
bid proposal, sometimes the mail get stuck with lots of letters, specially during the holiday
season.
9. Out-Bid Your Competitors. How you would be highlighted from other competitors? What
can you complete or do different than the others? What benefits are we going to receive from
you?
Sometimes winning a bid government is not an easy job, but with these guides you
will be so close to get one, that it is worth a try.
5.Estimating Software
1. Bid4Build

Bid4Build is one of the most advanced, easy to use, construction estimating software systems
available on the market today for the price. Designed for all sizes of general and subcontractors,
Bid4Build construction software generates bids, cost estimates and reports, quickly and
accurately so you can win the work and build your customer base. Bid4Build is well suited for

all types of residential construction, insurance estimating, electrical estimating, home

remodeling, and many areas of commercial construction. The program comes with an extensive
item cost database that can be customized by adding, deleting or changing line item entries as
well as line item costs.
2. ProContractor MX

ProContractorMX is composed of four integrated applications; ProContractorMX Digital

Takeoff, ProContractorMX Estimator, ProContractorMX Earthwork and ProContractorMX
Earthwork Digital Takeoff. ProContractorMX Digital Takeoff to aid in creating accurate
estimates.ProContractorMX can compensate for possible inaccuracies in scale by simply
applying a known distance for reference.ProContractorMX Estimator has an Import/Export Tool
that can import files with a .txt or .csv extension (ASCII files)3D visual assemblies allow users
to actually see what a project will look like based on take-offs and estimate
information.ProContractorMX Earthwork lets you create estimates, purchase orders and
change orders for earthwork jobs that involve cut and fill work, excavation and other jobs. Three
dimensional views in Earthwork offer
3. Goldenseal Basic

Retailers, service businesses, professionals or smallscale manufacturers will benefit from

Goldenseals integrated package of estimating software and project management software
designed for both Macintosh and Windows computers. For unsurpassed features and flexibility,
Goldenseals complete version has extra money management features such as job costs, general
accounting, payroll, project billing, customer billing and inventory tracking.Goldenseal is
designed primarily for small to medium sized construction companies or subcontractors with an
emphasis on small construction jobs.
4. BID2WIN

BID2WIN offers an impressive construction estimating software package. The massive feature
set and advanced technologies come together in a streamlined and easy to use system.
BID2WIN estimating and bidding software is a comprehensive program engineered to help you
with the entire process, from effectively estimating to successfully bidding on construction
projects. The software is specifically designed for heavy highway construction, and like the
physical outcome, is large in scope but utilizes the necessary heavy-duty tools to get the job done
right.
5. Work In Progress 6

Work In Progress is a highly integrated, complete construction management system containing

nine primary screens: Invoice View, Draws & Deposits View, Checkbook View, Customer
Billing & Payments View, Purchase Orders & Budgets, Change Orders, Payroll, Quickest View
and Taskmaster View. The program has succeeded in integrating each of these areas of

management into one program quite well; its design is so simple that small construction
companies and subcontractors that have struggled to stay organized in these areas will sing its
praises
6.Bidding Commercial Construction Projects
How to Bid Commercial Projects

Many people interested in the construction industry asks , how to bid construction. There is no
set way on how to bid construction; but coming up with the most accurate cost estimate and
developing the lowest bid is a tried and true method.
The construction bid process is the process in which a general contractor (and, in
some cases, the architect), is selected to work on a construction project. In some
cases, the only thing that matters in the construction bid process is presenting the
lowest price to the owner; in other cases, the
contractor 's qualifications are as important, if not more important, than having the
lowest dollar amount.
How to Bid Construction Projects

Knowing how to bid construction jobs makes the difference between success and bankruptcy for
a construction contractor. If a contractor does not know how to bid construction jobs, they will
have no chance at ever turning a profit.
In today's marketplace, the best way on how to bid construction jobs is to allow a capable
estimator with years of experience work with a computer program to come up with the best (and
lowest) possible cost. Construction bid software can be purchased by a general contractor and
installed on their computers, or, increasingly, it can be web-based. Construction bid software can
be very general, covering the entire project, or it can be highly specific, depending on the
contractor's needs. There are programs aimed at certain segments of the construction industry,
from residential, general or heavy construction. There are programs for carpentry estimating;
conceptual estimating; concrete estimating and insurance claims estimating, as well as any
miscellaneous estimating work that needs to be done. To enhance the online construction bid,
there are software programs specializing in plumbing, piping and HVAC, as well as repair and
remodeling tasks.
The benefits of construction bid software are substantial. Using software programs that develop
budgets and establish cost baselines, general contractors are able to keep track of the financial
status on a daily or hourly basis as opposed to, far less frequently, when the work was being done
by an employee. All budgetary information is stored in one location and is easily accessed,
contrary to when it was manually placed in separate files. The likelihood of errors is also far less
than it would be if the computations were done by hand. Having people and machines that know
how to bid construction projects will be a major step in ensuring commercial success.

Construction Bid Proposal

A construction bid proposal is the basis on which many construction companies are hired to
serve as the primary contractor on a project. Without a construction bid proposal, there would be
no way to establish the overall cost of a project, which would throw the project and the
contractor-client relationship into chaos.
In the traditional method of selecting a contractor, an architectural firm is hired by the property
owner to develop a design for the building or project. Once that design is completed and
approved by the client, the architect then puts the design out for construction contract bids. While
the architect may want to know more information about a contractor than their price, the bottom
line is the primary reason for the selection of most contractors. In some cases, the bid is the only
thing that is presented and the lowest bid gets the project.
There are plenty of ways to judge a construction bid proposal, beyond the simple baseline price.
With the design-bid construction method, construction bid proposals cover more than just the
price to build. The design-build method combines the architect and contractor as a unified team,
where they present not only their price to build the project, but their architectural design as well.
A design-build construction bid proposal includes an all-inclusive price, including the cost of
design and construction. Design-build supporters believe this method is not only more efficient,
but leads to lower costs as well.
Construction Bid Template
Construction Bid Template

A construction bid template is the required document on which construction companies present
their formal bid in their effort to win a project. Without the construction bid template, the entire
process in selecting a general contractor to take on the construction process would be changed
and its legality questioned.
A construction bid template is required for any project, regardless of the building method used.
In the traditional method of selecting a contractor, an architectural firm is hired by the property
owner to develop a design for the building or project. Once that design is completed and
approved by the client, the architect then puts the design out for bids. While the architect may
want to know more information about a contractor than their price, the bottom line is the primary
reason for the selection of most primary contractors. In some cases, the bid is the only thing that
is presented and the lowest bid gets the project.
While construction bid templates carry the all-important bottom lines, there are other factors,
beyond the simple baseline price that can determine a project winner. With the design-bid
construction method, construction project bids cover more than just the price to complete a
building. The design-build method combines the architect and contractor as a unified team,
where they present not only their price to build the project, but their architectural design as well.

Design-build construction project bids include an all-inclusive price, including the cost of design
and construction.
There are a number of different ways to take part in the process in today's construction industry,
but each can be effective and meet the needs of the client. A construction bid template is needed
in all of them.
Construction Project Bids

Construction project bids are the basis on which many construction companies are hired to serve
as the primary contractor on a project. Without construction project bids, there would be no way
to establish the overall cost of a project, which would throw the project and the contractor-client
relationship into chaos.
In the traditional method of selecting a contractor, an architectural firm is hired by the property
owner to develop a design for the building or project. Once that design is completed and
approved by the client,the architect then puts the design out for construction contract bids. While
the architect may want to know more information about a contractor than their price, the bottom
line is the primary reason for the selection of most primary contractors. In some cases, the bid is
the only thing that is presented and the lowest bid gets the project.
There are other types of construction project bids, beyond the simple baseline price. With the
design-bid construction method, construction project bids cover more than just the price to build
a building. The design-build method combines the architect and contractor as a unified team,
where they present not only their price to build the project, but their architectural design as well.
Design-build construction project bids include an all-inclusive price, including the cost of design
and construction. Design-build supporters believe this method is not only more efficient, but
leads to lower costs as well.
The construction manager at-risk (CM at-risk) method is another way construction project bids
are submitted. Under the CM at-risk method, the contractor and architect operate separately, but
the contractor is involved in the process from the beginning and serves as liaison for the client
dealing with the architect. CM at-risk bids are not blind, and the client can select whichever
contractor he believes is best-suited to handle the project. The contractor's bid comes in the form
of the guaranteed maximum price, which states the cost of pre-construction services and the
construction process itself will not go over a certain total.
There are different ways to submit construction project bids in today's industry, but they must be
effective and must met the needs of the client.
Construction Bid Sheet

Construction Bid Sheet

A construction bid sheet is the required document on which construction companies present their
formal bid in their effort to win a project. Without the construction bid sheet, the entire process in
selecting a general contractor to take on the construction process would be changed and its
legality questioned.
A construction bid sheet is required for any project, regardless of the building method used. In
the traditional method of selecting a contractor, an architectural firm is hired by the property
owner to develop a design for the building or project. Once that design is completed and
approved by the client, the architect then puts the design out for bids. While the architect may
want to know more information about a contractor than their price, the bottom line is the primary
reason for the selection of most contractors. In some cases, the bid is the only thing that is
presented and the lowest bid gets the project.
While construction bid sheets carry the all-important data, there are other factors, beyond the
simple baseline price that can determine a project winner. With the design-bid construction
method, construction project bids cover more than just the price to build. The design-build
method combines the architect and contractor as a unified team, where they present not only their
price to build the project, but their architectural design as well. Design-build construction project
bids include an all-inclusive price, including the cost of design and construction.
There are a number of different ways to take part in the process in today's construction industry,
but each can be effective and meet the needs of the client. A construction bid sheet is needed in
all of them.
Software for Bidding Purposes

A good method of how to bid construction is to use construction bid software. Construction bid
software is used largely by general contractors as part of the cost estimation and budgeting
processes when developing a bid for a new project. It was introduced the industry two decades
ago, and it has made a major impact in a short period of time. What was once a major issue of
concern for all construction projects, can now be done quickly and efficiently.
The main benefit of estimating software is the way it automates job costing. The software
typically comes with a database of construction costs, updated monthly by subscription. Many
builders will prefer to keep their own database for job costing so that the software will more
accurately reflect local costs and price fluctuations in the market.
Simply having material and labor costs at hand makes the estimators job easier. Estimators can
also use the software to define a jobs materials and labor hours. The software takes this
definition and calculates the job cost from a database of labor and material costs. In this way, the
estimator only needs to choose a job he has defined in the database, and the software does the

rest. This minimizes the chance that some procedure or material will accidentally be left out of
the equation.
Another benefit of estimating software is that it allows the builder to look at the final job costs
and compare them with the initial bid. Bids can then be reviewed to see how they can be made
more accurate. The estimator may decide to alter the definition of a particular job within the
software database, calling for less of a material or fewer labor hours.
Construction bid software is not overly expensive, with most programs falling into a price range
between $60 and $250, depending on the capabilities of the software. Most construction bid
software is designed to work within Microsoft's Excel program, though some of them are standalone.
The benefits of construction bid software are substantial. Using software programs, general
contractors are able to keep track of the financial status on a daily or hourly basis contrary to, far
less frequently when the work was being done by an employee. All budgetary information is
stored in one location and is easily accessed, in contrast to it was manually placed in separate
files. The likelihood of errors is also far less than it would be if the computations were done by
hand.
Learning how to bid construction properly can help a project's bottom line, as it reduces the
number of employees needed to successfully see it through to completion.
Online Construction Bids Systems
Online Construction Bids Systems
The development of the Internet over the past two decades has significantly
changed many aspects of the construction industry. For more than a century, a
company bidding on a project had to send large amounts of paperwork to a
potential client for consideration; now, an online construction bid can be made,
finishing the bid process with the click of a mouse.

An online construction bid can be assembled and sent through the use of construction bid
software. Construction bid software is used largely by general contractors as part of the cost
estimation and budgeting processes when developing a bid for a new project. What was once a
major issue of concern for all construction projects can now be done quickly and efficiently.
There are multiple sites that allow you to view, download and print construction drawings in
order to complete a bid proposal, The company must register and complete all the requirements
to have access to this database. Then all information is shared among all contractors, and the
notification regarding due date and changes is sent through email systems. There are several
steps prior to complete an online bidding system.

The Procurement System for Construction provides support for:

1. Selection of appropriate procurement and contracting strategies, and
nomination of an appropriate Principal in the contracts.
2. Preparation of tender documents and contracts based on standard forms.
3. Selection of contractors and consultants with proven performance records.
4. Effective management of contracts, including clause commentaries, sample
letters and checklists.
5. Maintenance of an effective performance management system through
monitoring and reporting.
6. Resolution of contractual claims and disputes.

Making an online construction bid is quick and far easier than the hours or
days it would take to assemble and send a bid through traditional methods.

Working with Contractors

There are going to be situations when you dont have the time, inclination or skill to make a
particular home repair or do some of the work you need done. We all hire someone to fix
something in our house at some point, including me. Learn when to use and how to select and
manage a home repair or maintenance contractor.
Types of Contractors

Types of Contractors
This article is geared more toward selecting a person or company to make repairs or perform
maintenance on your home rather than selecting a General Contractor (GC) or Builder. A General
Contractor or Builder is a company that will construct a major renovation project or build a new
home. For these types of projects please see the Before You Remodel Your Home article by
About Architecture Guide Jackie Craven.
The Repair and Maintenance contractor you will need is usually different than a GC.
Typically youll be dealing with a type of tradesman called a subcontractor for home
repair instead of a General Contractor who hires and manages multiple subcontractors to build a
home or do a major renovation.
The GC is the overall coordinator of a larger project. Typically, he or she does not provide the
labor to build the house. That comes from the subcontractors or the "trades" (construction
trades). On a new home or larger renovation or expansion project, these may include the

excavator, concrete sub, rough framing carpentry crew, roofer, plumber, electrician, finish
carpenter, painter, flooring, etc. The GC hires these subcontractors directly and "holds" their
contracts. That means they work for him, they are under contract to him and he pays them. You
would have a contract with only the GC if you hired one.
The GC makes his money by marking up the subcontractors' costs as a % of the construction
amount (common) or as lump sum fee (not too common). For this fee he or she provides the
management and scheduling of subs, paying the subs, provides supervision of the construction,
provides dumpsters, port-a-john, insurance and other miscellaneous things you need to build a
house or construct an addition. The subcontractors make their money by charging for labor and
by marking up material.
The GC is the generalist and the subcontractors are the specialists. But when you need a
specific thing fixed in your home, you need a specialist. And that person is the specialty
subcontractor, for example, a plumber.
When it comes to hiring someone for maintenance tasks a lot of people who do this work may
not be a licensed subcontractor at all. They may just be a guy with a truck, for example a
gutter cleaner, or leaf-raker or sometimes a painter. Although using these types of people may
work out, you must be careful since workmanship concerns and liability issues still exist but you
wont have the legal protection you have when using a licensed contractor. So I recommend just
avoiding the temptation altogether and always use a licensed contractor.
Deciding When to Use a Contractor

Deciding When to Use a Contractor

Making the decision to use a contractor is one that is often personal. It will come down
evaluating:

Your comfort level with the task at hand;

Your time;

Your budget.

If youre venturing beyond a simple home repair project to new technically challenging
installations such as adding electrical circuits or adding a sink, you should first check to see if a
permit is required from your local building department. You dont need a permit for many home
repairs but you may need a permit for new work especially for electrical, heating, cooling and
plumbing. In some cases, the permit will require that a licensed contractor do the work to protect
the publics health, safety and welfare. In some cases it may be required that the local Building
Inspector review your work during construction and after its completion.

If you find that a licensed contractor is not required for the permit or that the work you want to
do can be covered under a Home Owners Permit then Id suggest you ask yourself three
questions:

Do I feel confident in making (or at least comfortable trying) this repair?

Are the consequences acceptable if it takes me longer to do the project than I anticipate?

Do I really want to try this project?

If you answer no to any of the above questions, you should probably hire a contractor for
the repair. If you answered yes to them all, you should give it a shot and do the repair
yourself. Thats the only way to gain experience and confidence.
Selecting a Contractor

How To Select a Good Contractor

This may seem daunting but selecting a good subcontractor is really pretty straightforward. A
good tip I can give you is try to select contractors you may need on an urgent basis before you
need them. Why? Because if you have an emergency repair and need to find someone quickly
(who is also good and fair) you dont have time to go through a lengthy selection process. And
the WORST thing you can ever do is picking someone from the Yellow Pages without
interviewing them first. Im not talking about getting a bid for work you dont need, but try to at
least get the names before you need them of some well recommended emergency contractors,
like a plumbing or heating contractor.
The easiest, and one of the best ways to select a possible contractor, is to get references from
friends, family or a Realtor you trust. Please, do not just use the Yellow pages and hire
someone.
Once you have some names, meet with them, look for chemistry or rapport between you and
them and observe their level of professionalism. Courtesy, respect, punctuality and the ability to
communicate are some of the most important attributes a contractor can have next to their basic
competency. Actually, no matter how good someone is, if they dont click with you on these
points, dont hire them. Period.
Im sorry to say that I have to suggest you should also be observant for signs of substance abuse
such as alcohol or marijuana. If you suspect anything here, do not hire the contractor.
Heres a checklist of things to consider when selecting your contractor.
Lets use ratings of Best, Good, OK, Fair and Reject to classify some of these items.
Getting Names of Possible Contractors:

You have had good personal prior experience working with contractor [BEST]

Reliable referral from direct experience of family or friends [GOOD]

You know of the contractor's reputation but have no direct experience [OK]

You found them from a trade association or general advertising [FAIR]

State Contractor Licensing (they must provide the number if licensed):

Licensed; has never had a complaint filed or had disciplinary action taken [BEST]

Licensed; has no prior complaints filed for at least 3 or more years [FAIR]

Licensed; current complaints or actions against them within the past 3 years [REJECT]

Contractor has no license [REJECT]

Insurance (ask to see their certificates):

Workman's Compensation and General Liability [BEST]

General Liability only (bodily injury and property damage) [GOOD]

Contractor has no insurance [REJECT]

Business Longevity:

In business more than 10 years with the same name [BEST]

In business 5 or more years with the same name [GOOD]

In business 1 to 5 years with the same name [OK]

New business under 1 year [FAIR]

Stability and Permanence:

Has a physical business office and address [BEST]

Has only a Home office or answering service [FAIR]

Cell phone contact only, no office [REJECT]

Reference Check (yes, you should check references)

Positive prior current references from at least 5 customers [BEST]

1 to 4 positive references from past customers [FAIR]

No real references or negative references provided [REJECT]

Selecting a Contractor

How To Select a Good Contractor

This may seem daunting but selecting a good subcontractor is really pretty straightforward. A
good tip I can give you is try to select contractors you may need on an urgent basis before you
need them. Why? Because if you have an emergency repair and need to find someone quickly
(who is also good and fair) you dont have time to go through a lengthy selection process. And
the WORST thing you can ever do is picking someone from the Yellow Pages without
interviewing them first. Im not talking about getting a bid for work you dont need, but try to at
least get the names before you need them of some well recommended emergency contractors,
like a plumbing or heating contractor.
The easiest, and one of the best ways to select a possible contractor, is to get references from
friends, family or a Realtor you trust. Please, do not just use the Yellow pages and hire
someone.
Once you have some names, meet with them, look for chemistry or rapport between you and
them and observe their level of professionalism. Courtesy, respect, punctuality and the ability to
communicate are some of the most important attributes a contractor can have next to their basic
competency. Actually, no matter how good someone is, if they dont click with you on these
points, dont hire them. Period.
Im sorry to say that I have to suggest you should also be observant for signs of substance abuse
such as alcohol or marijuana. If you suspect anything here, do not hire the contractor.
Heres a checklist of things to consider when selecting your contractor.
Lets use ratings of Best, Good, OK, Fair and Reject to classify some of these items.
Getting Names of Possible Contractors:

You have had good personal prior experience working with contractor [BEST]

Reliable referral from direct experience of family or friends [GOOD]

You know of the contractor's reputation but have no direct experience [OK]

You found them from a trade association or general advertising [FAIR]

State Contractor Licensing (they must provide the number if licensed):

Licensed; has never had a complaint filed or had disciplinary action taken
[BEST]

Licensed; has no prior complaints filed for at least 3 or more years [FAIR]

Licensed; current complaints or actions against them within the past 3 years
[REJECT]

Contractor has no license [REJECT]

Insurance (ask to see their certificates):

Workman's Compensation and General Liability [BEST]

General Liability only (bodily injury and property damage) [GOOD]

Contractor has no insurance [REJECT]

Business Longevity:

In business more than 10 years with the same name [BEST]

In business 5 or more years with the same name [GOOD]

In business 1 to 5 years with the same name [OK]

New business under 1 year [FAIR]

Stability and Permanence:

Has a physical business office and address [BEST]

Has only a Home office or answering service [FAIR]

Cell phone contact only, no office [REJECT]

Reference Check (yes, you should check references)

Positive prior current references from at least 5 customers [BEST]

1 to 4 positive references from past customers [FAIR]

No real references or negative references provided [REJECT]

Experience

Specializes in the work you want performed [BEST]

Can perform the work you want but also does other types of work [OK]

Little to no experience in the work you want performed [REJECT]

Scope and Price: (All Items are Required)

Detailed description of the scope of work

Assumptions (if any) are clear and accurate

Contractor DID NOT offer discount to sign up now

Contractor will Guarantee the work

All verbal Contractor representations are in writing

No more than 25% to 33% asked for up front

Final payment not required until work is complete

Government Contracts: Bid Protest Procedure

Government Contracts: Bid Protest Procedure

Unsuccessful bidders have become a nightmare in all construction contracting. Public and
utility procurers must be very careful when awarding public contracts to ensure full
compliance and implementing effective remedies to deal with this type of issues.

The increase in the number of challenges can be explained by:

unsuccessful bidders becoming increasingly aware of their rights;

procedural changes that have enabled unsuccessful bidders to obtain the

background material required for a challenge; and

the current financial climate, which has reduced the number of contracts
awarded, so unsuccessful bidders may be prepared to challenge the award
of a contract.

What is Bid Protest

A bid protest is a challenge to the award or proposed award of a contract for procurement of
goods and services or a challenge to the terms of a solicitation for such a contract. A bid might be
protested or cancelled by an interested party when it claims that the selection procedure was
based on improprieties in the award of the contract. An interested party could be a potential
bidder for the contract or an actual bidder that did not win the contract. Other factors, such as the
bidders standing in the competition and the nature of the issues raised may affect whether it
qualifies as an interested party.
One of the key requirements to prevail under a formal bid protest is a showing that the protester
has been prejudiced by improper agency activities. A protester who prevails is entitled to a
remedy, usually in the form of corrections in the bidding process or monetary damages.
When to Protest a Bid

Protesting a bid must be done following procurement instructions and must be filed before the
time for receipt of initial proposals. If the protest challenges the award of the contract, it must
usually be filed within 10 days of when the protester knows or should know of the basis of the
protest. Regulations and norms to timely file a protest depend on each particular circumstance
and those instructions should be strictly followed
What Happens after a Bid has Been Protested

When the bid has protested, the corresponding agency or procurement division must within a
reasonable time present a report with their findings. Shortly after, the protester must file
comments addressing the initial report after receiving it. Failure to file comments might result in
dismissal of the bid protest. The procurement office might decide to re-evaluate proposals,
choose a new bidder, amend a decision, or take other actions.
What Happens When the Bid Protest Is Valid

When the bid protest has been validated and found admissible by the procurement agency, the
agency should decide on one of these alternatives:

Refrain from exercising options under the contract;

Terminate the contract;

Recompete the contract;

Issue a new solicitation;

Award a contract consistent with statute and regulation; or

Such other recommendation(s) as the agency determines necessary to

promote compliance

How to Present a Bid Protest

A detailed statement to present a bid protest must include:

1. The facts upon which the protest is based.
2. Present each and every procedure that was violated and how it was violated.
3. Specify each reason that all other bidders that participated in the process
should not be considered to be awarded the contract.
4. Submit all relevant exhibits that will clarify any single concern that the
procurement agency should have.
5. The bid protest is a document that shall not be amended; the bid protest
should include all possible violations.