Bid Award Procedures

Bid award procedures establish the formal transition from competitive bidding to contract execution for HVAC construction projects. These procedures ensure legal compliance, financial security, and proper project initiation.

Award Notification

Notification Timeline

Award notification follows established protocols:

Public Projects:

• Formal board or commission approval required
• Public announcement of award decision
• Notification within 30-60 days of bid opening
• Posting of results on public platforms
• Written notification to all bidders

Private Projects:

• Owner determines notification timeline
• Typically 14-30 days after bid opening
• Direct communication to selected contractor
• Optional notification to unsuccessful bidders

Notification Content

Award letters contain specific information:

Required Elements:

• Project identification and location
• Contract amount and scope
• Required submittal deadlines
• Bond and insurance requirements
• Contract execution timeline
• Conditions of award

HVAC-Specific Items:

• Equipment submittal requirements
• Long-lead item procurement
• Coordination meeting schedules
• BIM/CAD file exchange protocols
• Factory witness test requirements

Protest Period

Time allowed for bid challenges:

Public Projects:

• 5-10 business day protest period
• Formal protest procedures required
• Written documentation of concerns
• Suspension of award during review
• Resolution before contract execution

Private Projects:

• Owner discretion on protest handling
• Typically no formal protest rights
• Business relationship considerations

Contract Execution

Contract Documents

Complete contract package assembly:

Core Documents:

• Agreement form (AIA A101, ConsensusDocs, or custom)
• General conditions (AIA A201 or equivalent)
• Supplementary conditions
• Drawings and specifications
• Addenda issued during bidding
• Contractor’s bid form

HVAC Supplements:

• Equipment schedules and data sheets
• Performance specifications
• Testing and balancing requirements
• Commissioning specifications
• Operations and maintenance manuals outline
• Training requirements

Signature Requirements

Proper execution authority:

Contractor Requirements:

• Corporate officer signature
• Secretary attestation
• Corporate seal (if applicable)
• Board resolution for large contracts
• Authorization documentation

Owner Requirements:

• Authorized signatory
• Appropriate approval level
• Board authorization (public/institutional)
• Legal review completion
• Budget appropriation verification

Contract Modifications

Pre-execution adjustments:

• Value engineering deductions
• Scope clarifications
• Schedule adjustments
• Alternate acceptance/rejection
• Unit price confirmation
• Allowance verification

Performance Bonds

Bond Requirements

Financial guarantee of contract completion:

Standard Coverage:

• 100% of contract value
• Extends 1 year beyond completion
• Covers labor and material defaults
• Includes correction period obligations

HVAC Considerations:

• Equipment warranty periods
• System performance guarantees
• Commissioning completion
• Seasonal testing requirements
• Multi-year maintenance periods

Surety Qualifications

Acceptable bonding companies:

Rating Requirements:

• A.M. Best rating of A- or better
• Treasury Department approved
• State-licensed surety company
• Single project limit verification
• Aggregate capacity confirmation

For Large HVAC Projects:

• Bonding capacity $10M minimum
• Mechanical trade experience
• Equipment manufacturer relationships
• Claims history review

Bond Forms

Standardized documentation:

• AIA Document A312 (standard)
• Federal Form 25 (government projects)
• Custom forms (owner-specific)
• Dual obligee arrangements
• Consent of surety requirements

Payment Bonds

Coverage Scope

Protection for subcontractors and suppliers:

Protected Parties:

• First-tier subcontractors
• Second-tier subcontractors (limited)
• Material suppliers
• Equipment manufacturers
• Rental companies
• Labor providers

HVAC-Specific Coverage:

• Chiller manufacturers
• Controls suppliers
• Ductwork fabricators
• Piping contractors
• Testing agencies
• Commissioning providers

Claim Procedures

Process for bond claims:

Notice Requirements:

• 90-day notice after last work
• Written claim to contractor and surety
• Documented work performed
• Proof of non-payment
• Contract relationship verification

HVAC Material Claims:

• Equipment delivery documentation
• Shop drawing approval evidence
• Installation verification
• Manufacturer warranties
• Final balancing reports

Bond Amount

Coverage levels:

• 100% of contract value (typical)
• 50% minimum (some jurisdictions)
• State-specific requirements
• Federal Miller Act compliance
• Little Miller Acts (state projects)

Insurance Requirements

Commercial General Liability

Primary liability coverage:

Minimum Limits:

• $1,000,000 per occurrence
• $2,000,000 aggregate
• Products/completed operations
• Contractual liability
• XCU coverage (explosion/collapse/underground)

HVAC Enhancements:

• Refrigerant release coverage
• Pollution liability for oil/glycol
• Vibration/settling damage
• Water damage from testing
• Equipment damage during installation

Workers Compensation

Statutory employee coverage:

• State-mandated limits
• Employer’s liability $1M minimum
• All states endorsement
• Waiver of subrogation
• Certificate for each subcontractor

Automobile Liability

Vehicle coverage requirements:

• $1,000,000 combined single limit
• Owned/hired/non-owned vehicles
• Out-of-state coverage
• Equipment transportation
• Delivery vehicle coverage

Builders Risk Insurance

Property coverage during construction:

Owner-Purchased (typical):

• All-risk coverage
• 100% completed value
• Includes materials on-site
• Transit coverage
• Testing coverage

HVAC Equipment Protection:

• Factory-to-site transit
• Storage at staging areas
• Rigging and installation
• Hydrostatic testing damage
• Temporary heating/cooling equipment

Professional Liability

Design responsibility coverage:

Design-Build Projects:

• $2,000,000 minimum coverage
• 3-year tail coverage
• Equipment selection liability
• System performance guarantees

HVAC Design Liability:

• Load calculation errors
• Equipment sizing deficiencies
• System performance shortfalls
• Energy code compliance
• Indoor air quality issues

Installation Floater

Equipment in transit coverage:

• Chiller transportation
• Rigging operations
• Crane operations
• Rooftop equipment placement
• Specialized HVAC equipment

Additional Insured

Owner protection requirements:

• Primary and non-contributory
• Blanket additional insured
• Products/completed operations
• Waiver of subrogation
• 30-day cancellation notice

Certificate Management

Insurance documentation:

• ACORD 25 certificate form
• Policy endorsements attached
• Expiration date tracking
• Renewal requirements
• Continuous coverage verification

Notice to Proceed

Issuance Conditions

Requirements before NTP:

Administrative Prerequisites:

• Fully executed contract
• Performance bond received
• Payment bond received
• Insurance certificates approved
• Building permit obtained (if required)

HVAC-Specific Prerequisites:

• Equipment submittals scheduled
• Long-lead items identified
• Fabrication shop qualified
• Coordination meeting scheduled
• BIM/CAD files exchanged

NTP Content

Formal authorization elements:

Required Information:

• Project name and number
• Contract commencement date
• Substantial completion deadline
• Final completion deadline
• Liquidated damages rate
• Mobilization requirements

HVAC Schedule Milestones:

• Equipment submittal deadlines
• Approval duration expectations
• Procurement timelines
• Delivery dates
• Installation sequences
• Testing and commissioning dates

Effective Date

Contract time commencement:

• Specified calendar date
• Date of NTP issuance
• Date of permit issuance
• Site access date
• Owner determination

Conditional NTP

Partial authorization scenarios:

Limited Scope Authorization:

• Submittal preparation only
• Shop drawing development
• Equipment procurement
• Material ordering
• Fabrication commencement

HVAC Applications:

• Long-lead chiller procurement
• Custom air handler fabrication
• Controls programming
• Ductwork shop drawings
• Factory witness testing

Delayed NTP

Managing procurement during delays:

• Submittal approval continuation
• Equipment ordering authorization
• Material purchase limits
• Storage arrangements
• Payment terms adjustment

Financial Arrangements

Retainage

Withheld payment provisions:

Standard Practices:

• 10% initial retainage (typical)
• 5% reduced retainage (at 50% completion)
• Release upon substantial completion
• Final release after punchlist

HVAC Retainage Issues:

• Equipment payment timing
• Stored materials retainage
• Commissioning completion
• Seasonal testing holdback
• Warranty activation timing

Payment Schedule

Application for payment procedures:

• Monthly progress payments
• Stored materials provisions
• Equipment delivery payments
• Substantial completion payment
• Final payment release

Mobilization Payment

Initial project funding:

• 5-10% of contract value
• One-time payment
• Shop drawing preparation
• Project management setup
• Quality control systems

Preconstruction Activities

Submittal Log

Required documentation tracking:

HVAC Submittal Categories:

• Equipment data sheets
• Shop drawings
• Product data
• Samples
• Test reports
• Certifications
• Operations manuals

Schedule Development

CPM schedule requirements:

• Activity duration estimates
• Equipment lead times
• Fabrication sequences
• Installation logic
• Testing milestones
• Commissioning activities

Subcontractor Agreements

Trade contractor execution:

• Insulation contractor
• Controls contractor
• Testing and balancing agency
• Commissioning provider
• Ductwork fabricator
• Piping contractor

Post-Award Meetings

Pre-Construction Conference

Initial project coordination:

Attendees:

• Owner representative
• Architect/engineer
• General contractor
• HVAC contractor
• Major subcontractors
• Commissioning authority

HVAC Discussion Topics:

• Equipment submittal priorities
• Long-lead item procurement
• Coordination requirements
• BIM/CAD protocols
• Access and laydown areas
• Temporary utilities

Coordination Meetings

Ongoing project communication:

• Weekly progress meetings
• Submittal review sessions
• RFI resolution meetings
• Schedule updates
• Safety coordination
• Quality control reviews

Award Documentation

Record Keeping

Required documentation retention:

• Executed contract
• Bonds and insurance
• Notice to proceed
• Baseline schedule
• Approved budget
• Submittal logs
• Meeting minutes

Distribution

Document circulation:

• Owner (original)
• Contractor (original)
• Architect/engineer (copy)
• Surety company (copy)
• Lender (if applicable)
• Attorney (if applicable)

Special Considerations

Design-Build Awards

Integrated delivery modifications:

• Performance specifications
• Design criteria compliance
• Professional liability insurance
• Design schedule requirements
• Approval milestones

CM-at-Risk Awards

Construction manager arrangements:

• Guaranteed maximum price
• Cost-plus components
• Shared savings provisions
• Phased construction
• Early procurement

Multiple Prime Contracts

Separate trade awards:

• HVAC as separate prime
• Coordination responsibilities
• Interface definitions
• Payment procedures
• Schedule integration

The bid award procedure establishes the legal and financial framework for HVAC construction projects. Proper execution of these procedures protects all parties, ensures adequate resources, and sets the foundation for successful project delivery. Attention to HVAC-specific requirements during the award phase prevents delays and disputes during construction.

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