Division 0 is the first and most logical division to review. Items of importance that can be found in this division are procurement and contracting requirements. Here's an example. Instructions for procurement are sometimes referred to as instructions for bid, instructions for proposal, or invitation to bid. In competitive bidding, all competing firms must prepare and submit their bid under the same conditions.
Therefore, Procedures are normally outlined in the bidding documents to ensure that all qualified firms have an equal opportunity to submit the successful bid, and that no construction firm can gain an actual or perceived advantage during the process over its competitors. Click the button to review bidder qualifications examples that must be met when submitting a bid. Bidder qualifications refers to documentation that may be required prior to a bid being accepted. This applies to sales representatives only.
The bidder qualifications are the minimum requirements that should be met by the bidder to determine if they are qualified to perform the work of the bid category for which the bid is submitted. Failure of the bidder to meet these qualifications may be grounds for rejection of their bid. Keep in mind, these are examples and other provisions may need to be met. Is Division 0 part of the specifications for HVAC systems?
Thanks for pointing this out, Vicki. It's not, but even though Division 0 is not part of the technical specifications for HVAC systems, the information provided in this division is extremely important to the HVAC contractor. Division 0 provides information about the project scope, scheduled pre-bid meetings, procedures for requesting a variance from the contract requirements during the bidding stage, information available to bidders, required bid information and forms, the project agreement, and other important information. This section is particularly important for sales to review, since Division 0 is not part of the technical specifications that the HVAC contractor will be bidding on. This division may be omitted from the HVAC contractor's package of drawings and specifications provided by the general contractor or construction manager.
It's critical that the HVAC contractor obtain a copy of Division 0 because the terms and conditions of this division can have a significant impact on the HVAC contractor's work and bid, even if the project manual does not include a Division 0. The HVAC contractor should use Division 0 as a checklist to make sure that they have obtained and reviewed all the necessary information about the project. I understand why Division 0 is so critical. What sections of this division should be closely monitored by the HVAC contractor?
We'll review the following in detail, but keep in mind that the entire division should be reviewed, since it contains critical information for a job. The preliminary project schedule is a critical component. The owner or the general contractor may require the HVAC contractor to submit an as-planned construction schedule and updated schedules in a format using a scheduling software package. From my understanding, any project schedule that is included with the bid documents to be incorporated in the HVAC schedule is a critical component.
into the construction agreement may restrict the HVAC contractor's operations and increase the cost of performing the work, including being liable for paying liquidated damages. In this example, $1,000 daily. That's correct.
Therefore, any project schedule included in the bid documents needs to be closely scrutinized and reviewed by the HVAC contractor. The HVAC contractor is responsible for obtaining first-hand knowledge of existing conditions information, which are conditions relating to the site, such as parking, placement of trailers, etc. Additionally, reading or reviewing the Quality Assurance Codes and Standards verbiage is critical. Siemens will be held responsible for adhering to all codes and standards listed in the specification. What happens if the site is not examined?
If the site is not examined and problems arise, the general contractor can use this verbiage as a way to not pay for additional work. Another area is the hazardous materials conditions on the site. Hazardous materials found in older buildings can include asbestos, lead, and polychlorinated biphenyl, PCB, as well as naturally occurring hazards, such as mold.
The HVAC contractor needs to understand the existing site conditions. If asbestos or PCB exists on the site, the trade may be responsible for the removal of this material prior to the contractor beginning work. Otherwise, a full disclosure and agreed consent will be required.
The potential for encountering hazardous materials during a building renovation or expansion project needs to be assessed because removing hazardous materials can significantly impact the cost of the HVAC contractor's work. That's correct. Hazardous material information and reports concerning the project site should be provided or referenced in this section. One item I wanted to point out is that this is a great example of how specifications are used from job to job.
Sometimes, certain parts of the specification do not apply. This job is a new development. Therefore, the asbestos reference would not apply since asbestos is no longer used in new construction.
Oh, great catch, Vicki. This is something important to note when reviewing specifications. The HVAC contract will adhere to bid and proposal form requirements, which provide information regarding the format of the bid submittal. In this example, the bid is for a combination bid for two sites. Sometimes contracts are written for two jobs, using the same set of plans and specifications.
This is very critical to note in order to provide accurate bids for both projects. That's correct, Vicki. If sales does not notice that the project is for two sites, two sites and only provides a bid for one.
Siemens may be responsible for both jobs once the bid is accepted and the contract is signed. This can lead to significant negative slip on the project. Wage rate lists the living wage and prevailing wage that is paid to the workers depending on the state.
The Siemens wage rate may already be the prevailing wage rate. If not, sales needs to change the wage in the estimating tool when submitting the bid, if that is a requirement in the specification. Keep in mind, wage rates typically change from one year to the next. If a job that the sales representative is preparing a bid for extends over a new year, then they must ensure that they include the rise in wages expected for the new year.
Agreement forms that make up the agreement between the owner and the prime contractor are included in this section. Vicki, what can you tell me about your knowledge of the agreement form? I know that the agreement is the contract form that will serve as the relationship between the owner and primary contractor throughout the construction project. Exactly.
Plus, the importance of the construction agreement to the HVAC contractor is not in the form itself. but in the other documents that have the agreement references. By referencing other documents, such as the contract conditions, as well as the plans and specifications, these other documents become part of the construction agreement just as if they were reproduced as part of the agreement.
This section provides information on construction bonds. Vicki, I know you have first-hand knowledge about construction bonds. Tell us about the different types of bonds. Glad to.
There are three types of bonds. Performance and Payment, Bid, and Lean. Click each bond type to learn more. The Payment Bond protects certain laborers, material suppliers, and subcontractors against non-payment. A Performance Bond is issued to one party of a contract.
as a guarantee against the failure of the other party to meet obligations specified in the contract. It is also referred to as a contract bond. Performance bonds are essentially letters of guarantee issued by a bank on the request of the contractor, by which that bank undertakes to make a payment to the employer upon the employer's demand.
The performance bond secures the contractor's promise to perform the contract in accordance with its terms and conditions. At the agreed-upon price, and within the time allowed. A bid bond is a type of construction bond that protects the owner or developer in a construction bidding process.
It is a guarantee that you, as the bidder, provide to the project owner, ensuring that if you fail to honor the terms of the bid, the owner will be compensated. A mechanics lien bond is a surety bond that replaces the value of the property that has previously held the lien. The bond is designed to protect the bondholder from accusations of failure to pay. In terms of a prime contractor filing a bond claim against a property owner, the bond would benefit the property owner. In this example, the job has a no-lean provision.
The Clarification and Modification section provides the requirements and process to be used when questions arise. This requirement is very straightforward. As you can see in this example, any questions must be submitted in writing to the architect, according to the timeline specified. The Change Orders section provides the requirements for submitting change orders.
Change orders are initiated via a change request. Vicki, you recently dealt with change orders. Can you explain what these are?
Change orders are formal changes to the construction contract that are agreed to by both parties, and once agreed to and executed, become an amendment to the construction contract and or subcontract. They are initiated by a change request. In addition, it's important to note that change orders can be initiated by the owner, the designer through the owner, the general contractor, or a subcontractor through the general contractor.
Submittal requirements can fall under Division 0 and Division 1. This section provides the requirements for submitting and processing submittals during construction. We will discuss the HVAC contractor responsibilities a little later in the course. Payment procedures covered in this section address the process of how Siemens will get paid and what needs to be provided to get paid. Additionally, sales...
should use the American Institute of Architects form to modify any information as needed. I see that in this example, sales did exactly that. They highlighted areas that need to be focused on.
That's right. Payment procedures are not standard, and sales needs to review and modify them as shown. An addendum is an attachment to a contract that modifies the terms and conditions of the original contract.
The addendum section is important because contract conditions, plans, and specifications are never perfect. During the bid period, questions and issues surface as a result of the owner review, designer checking, or HVAC contractor analysis. When problems are discovered, a solution is devised by the owner or designer, and the HVAC contractor is notified of the change through an addendum.
From my experience, addenda can significantly add, delete, or change the character of the work. That's right. That's why the HVAC contractor preparing a bid must keep up to date with all addenda issued during the bid period to ensure that the project cost estimate is accurate.
Most standard bid forms require that the HVAC contractor list all addenda received during the bid period and incorporate them into the bid. All the documents that comprise the construction contract are intended to be complementary. However, if there is a conflict in requirements between contract documents, such as the plans and specifications, there needs to be a way to resolve this conflict. This is done in many construction contracts by establishing an order of precedence between the various contract documents. This contractual order of precedence establishes the hierarchy among contract documents.
documents that can be very helpful when interpreting and applying the contract. Is there a precedence between specifications and other documents? Yes. Typically, the project specifications take precedent over the drawings in construction contracts that specify a contract document order of precedence.
Is this always the case, or are there exceptions? There are exceptions. The HVAC contractor needs to review the construction contract to see if there is an order of precedent specified, and if there is, needs to understand which contract documents take precedent over others in interpreting the contract requirements. The information on insurance requirements and coverage provided in this section is general in nature. and not intended to provide advice regarding insurance requirements, products, or coverage for a specific project.
What if the specification calls for owner insurance? Oh, glad you brought this up, Vicki. Owner insurance means the owner is going to cover the insurance policy, and Siemens will pay the premium every month. This will require more project management time, since the project manager will need to fill out forms to cover the labor that will be on site at any given time. Sales needs to account for this time when bidding on the project.
Vicki, we've discussed all the areas of Division 0 that the HVAC contractor should closely monitor. Let's move on to our next topic. James, as you said, all divisions should be reviewed.
However, are there any divisions that are not reviewed? any other divisions that sales and engineering should pay closer attention to? Glad you asked, Vicki.
As I stated, Division 0 is the most logical beginning point, but another division to review is Division 1. As I stated, all of Division 1 needs to be reviewed. However, the temporary heating and cooling and ventilation section is particularly important to point out, since it will require extra costs. HVAC contractors are often asked to perform early startup of HVAC systems to provide temporary heating, cooling, dehumidification, and ventilation during the construction process to accommodate material installation requirements or early occupancy by the owner.
Early startup of HVAC systems can result in additional work and expense for the HVAC contractor because the system will typically need to be cleaned and filters replaced as part of the startup process. In addition, early startup of the permanently installed HVA system will impact equipment warranties and service. The following sections should be closely reviewed by the sales representative before the bid and once they've been awarded the bid by the engineer. This is really good information to have. I can see how this section can greatly affect the cost of the project.
As mentioned earlier in this module, the Submittal Procedures section is important because it provides the requirements for submitting and processing submittals during construction. The HVAC contractor needs to be aware of these submittal requirements, such as Certificate of Completion, Acceptance Certificate, and Warranty, because many of these requirements are typically required for HVAC equipment and systems. I know that these requirements involve time and money. Yes, that's why the contractor must be aware of the requirements. For instance, it's not unusual for the HVAC contractor to provide operation and maintenance O&M manuals on all equipment, as well as spare parts, such as filters, as part of the contract.
Vicki, we've discussed Division 0 and Division 1. Before we move on to the next lesson, let's review what we've learned.