Bid Evaluation

Bid evaluation determines which contractor receives the HVAC construction award through systematic analysis of submitted proposals against technical, financial, and qualifications criteria.

Bid Opening Process

Public bid openings establish transparency and documentation for the evaluation process.

Opening Procedures

The bid opening follows specific protocols:

• Public announcement of date, time, and location minimum 24 hours in advance
• All bids opened simultaneously at designated time
• Bid amounts read aloud in order received
• Alternates and allowances announced for each bidder
• Unit prices disclosed when applicable
• Completion time commitments recorded
• Formal bid tabulation sheet prepared immediately
• Late bids returned unopened with documentation of receipt time

Documentation Requirements

Record all bid opening information:

• Contractor name and contact information
• Base bid amount
• Alternate prices (adds and deducts)
• Allowances and unit prices
• Proposed completion time
• Bid security amount and form
• Addenda acknowledgment
• Names of major subcontractors
• Any qualifications or exceptions noted

Responsiveness Review

Responsiveness determines if bids comply with solicitation requirements before evaluating technical or price factors.

Mandatory Compliance Items

Bids must include all required elements:

Bid Security: Acceptable form (bid bond, certified check, cashier’s check) in correct amount (typically 5-10% of bid value), from approved surety company, properly executed with contractor as principal.

Executed Bid Form: All pages signed and dated, all blanks filled in, no unauthorized modifications, addenda acknowledged, prices in both words and figures matching.

Bonding Capacity: Letter from surety confirming ability to provide performance and payment bonds at stated percentages (typically 100% each), surety company appearing on Treasury Department Circular 570.

Insurance Certificates: Evidence of required coverage types and limits, including general liability ($1-2M per occurrence), workers compensation (statutory limits), automobile liability ($1M combined single limit), umbrella coverage ($5-10M for large projects).

Subcontractor List: Names and license numbers for major subcontractors, specific trades identified, substitutions policy stated.

Common Responsiveness Issues

Non-responsive bids are rejected without price consideration:

Mathematical Errors: Bid form calculations that don’t match totals, unit price extensions incorrect, alternate pricing missing or unclear.

Qualifications: Bids with conditions not permitted in instructions to bidders, proposed scope modifications, alternative materials not offered as addenda alternates, requests to negotiate terms.

Missing Documents: Required certifications absent, prevailing wage forms not submitted, references not provided, financial statements omitted when requested.

Time Issues: Completion time exceeding maximum stated in bid documents, start date modifications, phasing not matching specified schedule.

Qualification Verification

Contractor qualifications are verified against pre-qualification standards or evaluated post-bid.

Experience Assessment

Review contractor capabilities in relevant HVAC work:

Project History: Similar project types completed in last 3-5 years, project size comparable to current scope, complexity matching technical requirements, geographic location experience.

System Experience: Specific equipment types installed (chillers 500+ tons, boiler plants 10+ MMBTU/hr, VAV systems 50,000+ cfm, building automation systems), specialized systems (cleanrooms, laboratory exhaust, medical gas, mission-critical facilities), controls platforms and protocols.

Current Workload: Projects under construction and committed values, available bonding capacity, proposed project manager and superintendent assignments, ability to meet schedule without overextension.

Financial Stability

Evaluate contractor financial capacity:

Financial Statements: Audited statements for last 3 years, current ratio above 1.5:1, debt-to-equity ratio below 2:1, working capital sufficient for project size (minimum 10-15% of annual revenue).

Bonding Capacity: Aggregate bonding program limits, current bonded work in place, single project capacity, surety company AM Best rating (A- or better).

Payment History: Lien searches showing no unresolved mechanics liens, subcontractor payment practices verified through references, material supplier credit standing confirmed.

References

Contact provided references for performance verification:

Project Performance: Quality of installed work, adherence to specifications, punch list completion responsiveness, warranty service, post-completion support.

Schedule Management: On-time completion record, recovery from delays, coordination with other trades, critical path management.

Communication: Responsiveness to owner and design team, submittal quality and timeliness, RFI clarity, change order documentation, problem-solving approach.

Safety Record: OSHA recordable incident rate, Experience Modification Rate (EMR below 1.0 preferred), safety program documentation, site cleanliness and organization.

Technical Scope Review

Verify bidders understood and priced complete scope of HVAC work.

Bid Analysis Worksheet

Systematic scope verification identifies potential gaps:

Scope Clarification Process

When scope understanding is questioned:

Written Inquiries: Submit specific questions in writing referencing drawing details and specification sections, request written response with supporting calculations or assumptions, establish deadline for response (24-48 hours typical).

Scope Interviews: Meet with apparent low bidders to review scope interpretation, walk through major systems and quantities, discuss unusual conditions or access limitations, clarify temporary systems and phasing requirements.

Post-Bid Submittals: Request preliminary equipment submittals showing understanding of performance requirements, outline level control system architecture, provide preliminary coordination drawings for major equipment placement.

Bid Analysis Methods

Compare bids using multiple analytical approaches to identify outliers and evaluate reasonableness.

Unit Price Analysis

Break total bids into cost per unit metrics:

Cost per Ton: Chiller plant cost ÷ total tonnage (typical range $800-2,000/ton depending on efficiency, redundancy, distribution complexity).

Cost per CFM: Air handling equipment and distribution ÷ total system airflow (typical range $12-35/cfm for VAV systems including controls).

Cost per Square Foot: Total HVAC cost ÷ conditioned area (office buildings $25-50/sf, hospitals $75-150/sf, laboratories $150-300/sf).

Cost per Fixture: Plumbing fixtures and domestic water systems ÷ fixture count (complete installation including rough-in and trim).

Statistical Comparison

Analyze bid distribution:

Mean and Median: Calculate average and middle values, determine if low bid is significantly below median (>15% warrants scrutiny).

Standard Deviation: Measure bid spread, identify bids outside one standard deviation, investigate outliers for scope misunderstanding.

Percentage Spread: Calculate (high bid - low bid) ÷ low bid, spreads over 25% suggest varying scope interpretations, spreads under 10% indicate clear documents and competitive market.

Alternate Analysis

Evaluate pricing of alternates and options:

Add Alternates: Compare absolute dollar amounts between bidders, calculate percentage of base bid, verify pricing logic (equipment upgrade costs realistic, extended scope includes all associated work).

Deduct Alternates: Confirm deducts remove complete systems, verify deduct amounts reasonable (should recover direct costs plus overhead/profit allocation), check that base bid less deduct matches omitted scope.

Consistency Check: Compare relative pricing between bidders (if Bidder A’s alternate is 30% higher than base while Bidder B’s is 10%, investigate understanding difference).

Irregular Bids

Address bids with errors, omissions, or irregularities according to owner’s policies and applicable public procurement regulations.

Minor Irregularities

Waive immaterial deviations:

Informalities: Typographical errors that don’t affect price, missing signature on non-critical forms, incorrect date entries, stapled rather than bound submittals.

Clarifiable Items: Ambiguous wording that bidder can explain without price change, missing reference that can be provided, subcontractor spelling corrections.

Material Errors

Determine withdrawal rights and correction procedures:

Mathematical Mistakes: Allow correction when error is apparent on bid form face (extension errors, transposition of digits, decimal point errors), require documentation of estimating worksheets, verify error existed before bid opening, limit correction to computational fixes not judgment changes.

Omissions: Determine if omission is clear from bid form (missing alternate price, blank unit price), establish owner policy on allowing correction versus rejection, consider equity and competition impacts.

Withdrawal Requests

Handle post-opening withdrawal attempts:

Allowable Grounds: Clerical error resulting in substantial variance from intended bid (typically 10%+ of bid value), error is provable from estimating documents, bidder acted in good faith without negligence, withdrawal request made promptly after discovery.

Documentation Requirements: Original estimating worksheets showing intended price, explanation of error occurrence, affidavit regarding discovery circumstances, subcontractor quotes demonstrating mistake.

Public Project Constraints: Follow statutory requirements strictly, maintain competitive integrity, consider forfeiture of bid security, evaluate precedent setting impact.

Alternates Evaluation

Analyze alternate pricing to inform owner decisions on scope additions or deletions.

Ranking Methodology

Compare alternates across all bidders:

Budget Reconciliation

Determine affordable scope:

Available Funds: Establish total budget including all project costs (construction, professional fees, testing, owner equipment, contingencies, escalation).

Priority Ranking: Classify alternates as essential (building code compliance, owner program requirements), high priority (substantial operational benefits, critical performance features), desirable (enhanced amenities, future flexibility), optional (aesthetic upgrades, convenience features).

Combination Analysis: Evaluate alternate packages (base + essential alternates, base + high priority items, full scope with all alternates), calculate budget variance for each scenario, recommend award combination.

Contractor Selection

Establish recommendation through final evaluation consolidating all factors.

Selection Criteria Weighting

Typical evaluation framework for design-bid-build:

Price (50-70%): Base bid competitiveness, alternate pricing reasonableness, unit price balance, allowance allocations, life cycle cost implications when evaluatable.

Qualifications (20-30%): Experience on similar projects, current workload capacity, financial stability, bonding capability, key personnel resumes, safety record (EMR), references.

Technical Approach (10-20%): Understanding of project requirements, proposed schedule logic, quality control procedures, coordination methodology, warranty provisions.

Award Recommendation Report

Document selection rationale:

Executive Summary: Recommended contractor and contract amount, award basis (lowest responsive responsible bidder, best value determination), budget status (within budget, requires scope reduction, requires additional funding).

Bid Results: Tabulation of all bids received, responsiveness determinations, qualification summaries, bid analysis findings.

Evaluation Process: Criteria applied, scoring methodology, interviews conducted, reference checks completed, scope clarifications obtained.

Recommendation Justification: Why recommended contractor represents best value, specific strengths supporting selection, risk factors and mitigation measures, proposed contract terms and conditions.

Non-Price Factors

When considering factors beyond low bid (permitted in some private and design-build projects):

Value Engineering Capability: Demonstrated ability to offer cost-effective alternatives, track record of successful VE proposals, constructability review expertise, collaborative approach.

Schedule Performance: Ability to accelerate or recover schedule, approach to fast-track coordination, equipment procurement lead time management, efficiency in closeout procedures.

Specialized Expertise: Unique qualifications for complex systems (central plant operations, seismic restraint design, vibration isolation, mission-critical redundancy, clean environment protocols).

Bid Protest Procedures

Establish fair process for handling bidder objections to award recommendations.

Grounds for Protest

Valid protest bases typically include:

Procedural Errors: Improper evaluation of responsiveness, misapplication of selection criteria, mathematical errors in tabulation, failure to follow specified procedures.

Specification Issues: Restrictive specifications favoring particular contractor, ambiguous requirements creating unfair advantage, conflicts between documents affecting pricing.

Awardee Qualifications: Questions regarding responsibility of recommended contractor, bonding capacity verification, license status, references accuracy.

Protest Resolution

Handle protests systematically:

Filing Requirements: Protests submitted in writing within specified timeframe (3-5 business days typical), specific grounds stated with supporting documentation, requested remedy identified.

Review Process: Suspend award pending investigation when material issues raised, gather factual information from all parties, provide protestant opportunity to present case, issue written determination with reasoning.

Appeal Rights: Define appeal authority (owner representative, board, independent review), establish appeal timeline, determine finality of decisions.

Post-Award Activities

Complete administrative steps following contractor selection.

Contract Execution

Finalize binding agreement:

Notice of Award: Formal letter to successful bidder establishing contract formation, specifying contract amount and accepted alternates, requiring executed contract within specified period (10 days typical).

Performance and Payment Bonds: Submit bonds from surety company named in bid, verify proper execution with owner as obligee, confirm coverage amounts (100% of contract value typical), check surety authorization on Treasury Circular 570.

Insurance Certificates: Provide evidence of required coverage, name owner and design team as additional insureds, confirm coverage effective date matches contract, establish waiver of subrogation provisions.

Submittals Register: Review specified submittal requirements, establish submittal procedures and schedule, identify long-lead equipment requiring immediate submittals.

Unsuccessful Bidders

Notify and debrief non-selected contractors:

Rejection Letters: Notify all bidders of award decision promptly, identify successful contractor and contract amount, explain basis for selection when appropriate.

Bid Security Return: Return bid bonds or checks to unsuccessful bidders after contract execution, typically within 10 days of award, retain security of awarded contractor until performance bond received.

Debriefing Sessions: Offer optional debriefing for unsuccessful bidders, explain evaluation results and scoring, provide constructive feedback on bid weaknesses, maintain confidentiality of competitive information.

Quality Assurance

Verify evaluation process integrity and documentation completeness.

Evaluation Documentation

Maintain complete record:

• Bid opening attendance sheet and initial tabulation
• Responsiveness checklist for each bid
• Qualification verification worksheets
• Technical scope review notes
• Bid analysis calculations and comparisons
• Alternate evaluation matrices
• Interview notes and clarification correspondence
• Reference check summaries
• Selection criteria scoring sheets
• Award recommendation report
• Owner approval documentation

Process Compliance

Confirm adherence to requirements:

Procurement Regulations: Follow applicable federal, state, or local requirements (FAR for federal projects, state procurement codes, municipal regulations), document compliance with procedures, maintain audit trail.

Internal Policies: Apply owner’s standard evaluation criteria consistently, obtain required approvals at each stage, involve appropriate stakeholders, document deviations with justification.

Ethical Standards: Avoid conflicts of interest, maintain confidentiality of bid information until award, ensure fair and impartial evaluation, document all communications with bidders.

The bid evaluation process determines project success through selection of qualified contractors capable of delivering the HVAC systems on schedule, within budget, and according to specifications.

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