Commercial Construction Bids: Types and Considerations
Choosing the right pricing structure is crucial for the success of any construction project. As a building owner, it’s essential to understand the different bidding methods and their pros and cons to make the most informed decisions. This article explores the common types of bids: Hard Bid, Design-Build (DB), Design-Assist (DA), and Negotiated Bid.
Hard Bid
A Hard Bid involves contractors submitting fixed-price bids for a project. The lowest responsible bid is selected, making this method common for public works and straightforward projects.
Advantages:
- Clear cost estimate
- Minimal risk of cost overruns with detailed construction documents
Disadvantages:
- Limited collaboration among stakeholders
- No room for contractor input on cost savings
- Potential quality and scheduling issues due to change orders
Design-Build (DB)
Design-Build is a method where one contractor manages both design and construction. The contractor collaborates with an architectural firm and the owner from the beginning to project completion under a single contract.
Advantages:
- Streamlined process with one point of responsibility
- Early cost estimates
- Encourages collaboration
- Allows for value engineering and cost-saving suggestions
Disadvantages:
- Higher costs due to limited competition
- Potential lack of design expertise compared to specialized teams
Design-Assist (DA)
In Design-Assist, a contractor joins early to help develop the project’s plans. Competition is maintained by comparing contractors’ costs for various project components.
Advantages:
- Promotes collaboration
- Allows for cost-saving suggestions
- Provides early cost estimates
- Improves quality and efficiency with contractor input
Disadvantages:
- Potential lower expertise compared to dedicated design teams
Negotiated Bid
A negotiated bid involves direct negotiation between the owner and a contractor or design-build team to agree on the project scope, cost, and timeline. This method is suitable for complex, large projects.
Advantages:
- Better communication and understanding of project requirements
- Flexibility to adjust the project scope
- Cost savings through value engineering
Disadvantages:
- Reduced transparency, though mitigated by open-book subcontractor bids
Choosing a negotiated contract, design-build, or design-assist method is beneficial, especially with a proven contractor team like EPI Construction. These methods foster collaboration and efficiency, reducing risks and ensuring high-quality results.
EPI Construction, known for its integrity and trust, operates in California, Arizona, New Mexico, and South Carolina, offering comprehensive construction solutions with a skilled in-house labor force.
