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COMPREHENSIVE DRYWALL BIDDING Making Exclusions and Clarifications for Strategic Bidding

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Title: COMPREHENSIVE DRYWALL BIDDING Making Exclusions and Clarifications for Strategic Bidding


1
COMPREHENSIVE DRYWALL BIDDINGMaking Exclusions
and Clarifications for Strategic Bidding
  • Gerald H. Williams, Jr., Ph.D., P.E.
  • Construction Research, Inc., Portland, Oregon
  • Stephen L. Iriki, Esq.
  • Otis, Canli Iriki, LLP., San Francisco,
    California

2
Introductions
  • Gerry Williams
  • Estimator 1980s 90s Donald M. Drake Company,
    bid over 2.5 billion commercial buildings
  • Worked on more than 50 drywall claims
  • Steve Iriki
  • Construction Attorney
  • Negotiated several drywall contracts
  • Worked on more than two dozen drywall claims and
    more than 100 construction disputes

3
Overview
  • Structure of a Bid
  • Philosophy, Strategy, and Tactics
  • Style or Content?
  • Examples of Exclusions and Clarifications
  • Questions from the Audience

4
Why is this important?
  • The Economic Conditions/Climate require Strategic
    and Tactical Bidding.
  • Profitability of your project will be established
    by your bid and your contract.
  • There are a lot of common mistakes that bidders
    make.
  • Bid Clarifications and Exclusions can be tricky.
  • What the NWCB can do to help you

5
Structure of the Bid
  • Structure of the bid is determined by the
    customer
  • Government owner versus Private Owner
  • Contractor versus Owner
  • Government Owners
  • Responsive and Responsible Bidders Objective
    Criteria
  • Private Owners/General Contractors
  • Responsibility and Responsiveness is Subjective
  • Post Bid Negotiations and Modifications Possible
  • This is where bid clarifications become very
    important

6
Can You Modify the Bid?
  • Public, competitive bids? Generally NO
  • Private, bid or negotiated procurements?
    Generally Yes/Perhaps/Maybe
  • What do the bid documents say?
  • Hard bid versus negotiated versus hybrid
  • Subcontractor to General Contractor bids?
  • General Contractor makes the rules
  • Multiple GCs versus single GC (CM/GC)

7
Legal Considerations for Modifying the Bid
  • Anti-trust Issues
  • Broad Agreements and Price Fixing
  • Anti-bid-collusion Issues
  • You bid low on this one Ill be low on the next
  • Contract Law Issues
  • What does the Information for Bidders say?
  • Does it Exclude Modifications and Clarifications?
  • What is the impact of Modifications in light of
    such contractual requirements?
  • Ethical Considerations
  • Bid Shopping

8
Philosophy, Strategy, Tactics
  • What is your firms bidding philosophy
  • Why are you bidding the work?
  • Bidding Profit?
  • Bidding for Work?
  • Bidding Risk?
  • Risk is about minimizing uncertainty and the
    things you cant control.
  • Profit is about taking maximum advantage of
    uncertainty or lack of clarity
  • Work lowest acceptable price to the bidder

9
Basic Strategies of Bidding
  • Lowest Possible Bid
  • Most Accurate Bid
  • Most Profitable Bid
  • What tactics are associated with each strategy?

10
Tactics
  • Lowest Possible Price Strategy
  • Exclude and Omit (Active and Passive)
  • Obscure your bid the most
  • If its not shown on the plans you dont have
    it, but you may not wish to actively announce
    that you dont have it
  • The intent is to provide only pricing for what is
    clearly shown and argue about it later
  • Risks associated with these Tactics and this
    Strategy is you may lose

11
Tactics
  • Most Accurate Bid
  • Clarify, and actively Exclude work that is not
    clearly shown, and provide Alternate Pricing.
  • Provide the most definite and defined scope of
    work in the bid possible.
  • Let the GCs know something is not clear and
    raises the question whether or not other bidders
    have included it?
  • The intent is to leave little to question or
    fight about.
  • Risk is that your bid will be high and not used.

12
Tactics
  • Most Profitable Bid (uncommon)
  • Fundamental theory of competitive bidding
    competition drives price to cost lack of
    competition drives price to replacement.
  • Highest possible bid that the owner/GC will
    accept without balking
  • Cover all possible costs, no financial risk
    motivation
  • Provides a complete lack of transparency this
    is the bid.
  • Risks balking by the GC or Owner.

13
Types of Modifications
  • Scope Modifications
  • What are we going to do
  • Management Modifications
  • Under what conditions are we going to execute the
    work
  • Schedule
  • Administrative Modifications
  • Safety Programs
  • Dispute Resolution Provisions
  • Payment Terms

14
Evolution of Scope Clarifications
  • Plans and Specs Sections 5400 and 9250 complete
  • Fax and Internet
  • More opportunity
  • Risks Rejection
  • Timing

15
Language
  • What is the goal of a Modification?
  • Go back to the Strategy
  • Generally a Clarification should Clarify
    something, right?
  • Clear or not?
  • This quote is based on reasonable and productive
    stocking and clean-up access and egress.
  • What about contractor shall have no less than 4
    hours of unfettered access for stocking prior to
    scheduled commencement of work

16
Language
  • Modifications should deal with one single issue.
  • Reference to other documents and standards should
    be specific and identify with particularity
  • Simply ASTM is not good enough
  • Should be internally consistent
  • Exclusion or Clarification call it what it is

17
Examples
  • The General Contractor shall be responsible for
    providing access.
  • Why is this a good or not so good clarification?
  • Ambiguity and definiteness?

18
Examples
  • Which is better?
  • Bid is conditioned upon the work being performed
    in accordance with the schedule provided with the
    bidding documents.
  • Bid assumes all work is made available in
    accordance with typical industry scheduling
    practices.

19
Example
  • This bid is subject to mutually agreeable
    contract terms
  • Pros?
  • Cons?
  • This bid is subject to subcontractors standard
    terms and conditions
  • This is from an actual bid
  • So which is it?

20
Example
  • Subcontractor shall have 3 complete sets of the
    plans and specifications prior to starting the
    work
  • What are we asking for?
  • Who are we asking it from?
  • What medium are we asking it to be delivered in?
  • Is this really a clarification
  • Is it binding on anyone?

21
Example
  • This bid is based on only the documents as
    received from the General Contractor any other
    documents or agreements are not applicable.
  • Sounds good and clear what do you think?

22
Example
  • This bid is based on only the documents as
    received from the General Contractor any other
    documents or agreements are not applicable.
  • What I meant to say was Plans dated D/M/Y,
    Revision XYZ

23
Example
  • Floors are to be free of water that is not part
    of the fireproofing operation
  • Floors are to be scraped and swept broom clean,
    excluding grinding, sanding, covering, or mopping
    of floors.

24
Example
  • All products to be purchased and used by the
    manufacturer of the subcontractors choice.
  • What is bad about this?

25
What are the Bare Minimums?
  • Time limitation of the bid price
  • Subject to mutually agreeable terms and
    conditions
  • Subject to a mutually agreeable schedule
  • Cost escalation
  • Acceptable payment terms
  • Code requirements for the work are determined by
    the date of the bid for the jurisdiction
  • Environmental controls by others
  • Proportionate indemnity
  • Insurance limits defined
  • Design responsibilities clearly delineated

26
Conclusion
  • To Modify or not not always an option
  • Bidding of work is a strategic and tactical
    process know your firms goals and philosophy
  • Most bid Modifications should be uniform,
    unambiguous, and drafted with care
  • Some Modifications are optional, others are
    indispensable

27
Impacts to Labor Productivity in the Metal Stud
Framing, Drywall, Tape Finishing
TradesGerald H. Williams, Jr., Ph.D.,
PETimothy R. Anderson Ph.D.
28
Author Biographies
  • Gerald H. Williams, Jr., Ph.D., P.E.
  • Ph.D. Systems Science Engineering Management,
    Portland State University
  • Master of Engineering Management, Washington
    State University
  • B.S. Civil Engineering, Oregon State University
  • 28 years of Engineering, Government,
    Construction, and Consulting Experience
  • Registered Professional Civil Engineer, since
    1985 California, 1986 Oregon, 2004 Washington,
    and 2008 Idaho
  • Timothy R. Anderson, Ph.D.
  • Ph.D. Industrial Engineering, Georgia Institute
    of Technology
  • M.S. Industrial Engineering, Georgia Institute of
    Technology
  • B.S. Electrical Engineering, University of
    Minnesota
  • Engineering Faculty at Portland State University
    since 1995

29
Importance of the Construction Industry
  • 11 of US GDP is accounted for by the
    construction industry
  • Drywall work makes up about 10 of most
    commercial building projects
  • Generally drywall will be a critical path
    activity through the middle portion of the job
    life.
  • Excavation
  • Foundation
  • Structure
  • Framing Drywall
  • Finishes

Labor is approximately 75 of the cost of
drywalling
30
Principal Tasks in Drywalling
  • Wall framing
  • Putting up 2x4s or (more typically metal studs)
    to support the drywall
  • Hanging boards
  • Putting in place and securing the drywall panels
  • Taping finishing
  • Sealing the seams between drywall panels

31
Contractors are Selected
  • Lump sum bid competitive bid based on a
    predetermined set of plans and specifications
  • Variables
  • Estimate of labor productivity
  • Material pricing/financing
  • Bonding and insurance costs
  • Overhead and fee

32
Distribution of Wall Framing Rates
Mean35.5 LF/MD s16.6
Mean35.6 LF/MD s14.4
Measured in terms of linear feet per
man-day Average rate is 35.5 linear feet per
man-day but some jobs are much easier (over 80
LF/MD) or harder (under 20 LF/MD) How good are
estimators at predicting difficulty and
incorporating this into their bids?
33
Wall Framing Productivity Varies Widely
  • Production rates vary widely for wall framing
  • Estimators are able to account for less than half
    of the variation in actual production rates

What explains the rest of the variation?
34
Taping and Finishing is Similar
  • Taping and finishing tasks from one of the
    largest drywallers in the US

35
Research Project
  • Two projects
  • Pilot Project involving one firm
  • Final Study, presented here
  • Sponsors
  • Northwest Wall Ceiling Bureau
  • Northern California Drywall Contractors
    Association
  • NW Wall Ceiling Contractors Association
  • Associated Wall Ceiling Contractors
  • Western Wall Ceiling Contractors Association

36
What are the Factors that Negatively Affect
Productivity
  • Expert Panel was assembled from the members of
    the NWCB
  • Factors included
  • Trade Stacking
  • Labor and Material Congestion
  • Overtime and Added Shift Work
  • Out of Sequence Work, Go Backs and
    Ramp-Up/Ramp-Downs

37
37
38
38
39
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40
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41
Survey of Projects
  • A survey of projects was conducted
  • 255 responses received
  • Projects under 100K were excluded along with
    exterior work only
  • Projects reporting 200 or better productivity
    were examined and found to be subject to scope
    change thereby making them inappropriate
  • 218 valid responses were used for the analysis

42
Survey Instrument
  • 4 pages
  • First page asked for project characteristics
  • Next three pages asked about effects observed on
    the work site.
  • List of 38 potential effects developed by
    industry experts.

43
Survey Instrument Pages 2-4
    Factor None Low Moderate High Severe Comments
Owner/Arch/ Inspector Related Constr. Admin. Overzealous Inspection            
Owner/Arch/ Inspector Related Constr. Admin. Unreasonable safety requirements            
Owner/Arch/ Inspector Related Design Incomplete documents/changes to scope            
Owner/Arch/ Inspector Related Design Quality of Plans Specs/RFIs (add of RFI's in comment)            
Owner/Arch/ Inspector Related Design Change Orders (add of CO's in comment)            
Owner/Arch/ Inspector Related Design Constructability Issues            
External Factors External Factors Extreme Weather            
External Factors External Factors Work Stoppages (Acts of God, War Public Enemy)            
External Factors External Factors Wage Increases            
External Factors External Factors Problems with access to the Jobsite            
External Factors External Factors Other Problems? (comment)            
Subcontractor Controlled Subcontractor Controlled Bid Issues (missing scope? Overly optimistic productivities?)            
Subcontractor Controlled Subcontractor Controlled Problems with motivation/morale            
Subcontractor Controlled Subcontractor Controlled Other local workforce problems (lack of skilled workers?)            
Subcontractor Controlled Subcontractor Controlled Availability/Supply of tools and equipment            
Subcontractor Controlled Subcontractor Controlled Excessive rework/Punchlist (Quality control with workforce)            
Subcontractor Controlled Subcontractor Controlled Coordination/Layout errors of own work            
Subcontractor Controlled Subcontractor Controlled Problems with vendor deliveries            
Subcontractor Controlled Subcontractor Controlled Other Problems? (comment)            
General Contractor Controlled Admin/coordination Problems with access to specific work areas            
General Contractor Controlled Admin/coordination Building interior environment problems (heat, rainwater, etc)            
General Contractor Controlled Admin/coordination Mechanical/electrical/jplumbing interferences            
General Contractor Controlled Admin/coordination Delay/Availability of GC supplied materials (General OFCI)            
General Contractor Controlled Admin/coordination a) Door Frames            
General Contractor Controlled Admin/coordination b) Windows or exterior skin/curtain wall            
General Contractor Controlled Admin/coordination c) Unfinished substrait work by others            
General Contractor Controlled Admin/coordination Problems w/ response time to RFI's and Change Order Requests            
General Contractor Controlled Admin/coordination Problems w/ response time to submittals            
General Contractor Controlled Delay/Scheduling Trade stacking/Labor congestion due to other trades            
General Contractor Controlled Delay/Scheduling Crowding/Labor congestion of your crews            
General Contractor Controlled Delay/Scheduling Congestion due to materials and equipment            
General Contractor Controlled Delay/Scheduling Overtime            
General Contractor Controlled Delay/Scheduling Added shift work            
General Contractor Controlled Delay/Scheduling Out-of-sequence work            
General Contractor Controlled Delay/Scheduling Remobilizations/Go Backs            
General Contractor Controlled Delay/Scheduling Ramp-up/Ramp-down labor forces            
General Contractor Controlled Delay/Scheduling   Yes Yes   No No Comment on Frequency
General Contractor Controlled Delay/Scheduling Were Three-week/coordination schedules distributed?            
General Contractor Controlled Delay/Scheduling Was the overall project schedule distributed?            
General Contractor Controlled Delay/Scheduling Were overall schedule updates distributed?            
44
Core Idea Finding Sources for Productivity Loss
  • A framing production rate is generally measured
    as linear feet per worker-day. (i.e. higher
    values are better)
  • 50 means 50 linear feet per worker-day
  • Key variable Framing Relative Prodactest
  • This stands for framing productivity as measured
    by actual rate/estimated rate.
  • Therefore, framing productivity as measured by
    actual rate/estimated rate
  • gt 1 implies your team worked faster than
    estimated (expected)
  • lt 1 implies your team worked slower than
    estimated (expected)

45
Projects Represented
  • 2/3 of the projects were private

46
Types of Projects
  Frequency Percent
2 0.9
Clean Room 7 3.2
Higher Education 17 7.8
Hospital 23 10.6
Institutional 12 5.5
Multifamily 12 5.5
Office 31 14.2
Office TI 1 0.5
Office/Manufacturing/Testing 1 0.5
Office/Warehouse 1 0.5
Other - Medical Facilities 1 0.5
Other - 40 18.3
Other - Data/Hightech 1 0.5
Residential 2 0.9
Retail 16 7.3
Schools - K- 12 24 11.0
TI 26 11.9
Waste Water Treatment Plants 1 0.5
47
Project Size
48
Trade Stacking
  • Trade Stacking was experienced by contractors as
    shown to the left but does it affect
    productivity?

49
Labor Congestion
  • Too many cooks spoil the soup
  • Frequently there is labor congestion but does it
    affect productivity?

50
Congestion Due to Materials Equipment
  • Stuff getting in the way of getting work done

51
Overtime
  • Needing to have people work longer work weeks
  • Does it affect productivity?

52
Added Shift Work
  • Will a night shift be as productive as the day
    shift?

53
Out of Sequence Work
  • Say a project should naturally be done as
  • A?B?C
  • What is the impact of being forced to do
  • A?C?B

54
Go Backs
  • You cant finish in areas and need to go back so
  • A?B?C?rest of A

55
Ramp Up/Ramp Down
  • Hurry up and wait
  • You assemble a team starting work and then have
    to wait before going again

56
Analysis Structure
Simple Single Linear Regressions Determines which
causes and effects have the strongest
relationships with productivity
Calculate Fragmentation and Congestion Combines
impacts finds factor which can be used for
logistic regression
Correlation Matrix Confirms Relationships among
causes and effects but indicate that SSLR
results are not additive
Logistic Regression Analysis Determines levels of
impact correspondingto different productivity
impacts
57
SSLR Results
Simple SingleLinear Regressions
Calc Frag, Cong, Acc
Correlation Matrix
LogisticRegression
  • 35 separate regressions
  • Essentially, everything thought to negatively
    impact productivity did
  • High correlations prevent direct usage though

58
Correlation Matrix
Red numbers represent very strong correlations of
0.5 or higher. Black numbers represent strong
correlations of 0.3 to 0.5 Gray numbers represent
weak correlations of 0 to 0.3
59
Correlation Matrix
Simple SingleLinear Regressions
Calc Frag, Cong, Acc
Correlation Matrix
LogisticRegression
Group Correlation Averages(1s not included)
60
Types of Impacts
  • 38 Total Variables (3 were yes/no)
  • Causes, Effects, and Directs
  • Incomplete or Incompetent Plans Specifications,
    Poor Management
  • Out of Sequence Work, Go Backs, etc
  • Environmental Factors Weather
  • 2 Main Effects
  • Fragmentation Related
  • Congestion Related

61
Calculating Congestion
Simple SingleLinear Regressions
Calc Frag, Cong, Acc
Correlation Matrix
LogisticRegression
What was the impact of (Circle one value in each row) None Low Moderate High Severe
Trade stacking (Labor congestion due to other trades) 0 1 2 3 4
Labor congestion of your crews 0 1 2 3 4
Congestions due to materials and equipment 0 1 2 3 4
Sum of circled scores  
Congestion Sum/3  
62
Calculating Fragmentation
Simple SingleLinear Regressions
Calc Frag, Cong, Acc
Correlation Matrix
LogisticRegression
What was the impact of (Circle one value in each row) None Low Moderate High Severe
Out of sequence work 0 1 2 3 4
Remobilization and Go Backs 0 1 2 3 4
Ramp Ups and Ramp Downs of labor forces 0 1 2 3 4
Sum of circled scores  
Fragmentation Sum/3  
63
Logistic Regression Usage
Simple SingleLinear Regressions
Calc Frag, Cong, Acc
Correlation Matrix
LogisticRegression
  • Similar to regular linear regression but better
    suited to this problem where we are asking
    whether or not a loss occurred

64
Likelihood of Loss
65
Construction Claims
  • Step 1 Provide compelling evidence that a loss
    was incurred
  • Step 2 Using detailed project specific
    records, quantify the loss
  • This work is to be used for the first step to
    provide compelling evidence to get to a remedy
  • Legal Entitlement is a separate issue

66
Alternate Use Forward Pricing
  • Variations of this work can be used to predict
    the productivity loss due to an upcoming change
    and factor that into the engineering change
    order.

67
Observed Range of Impacts
Upper Range of typically observed productivity impacts on Upper Range of typically observed productivity impacts on Upper Range of typically observed productivity impacts on
Framing Hanging Taping
Congestion 44 40 47
Fragmentation 50 41 47
Acceleration 42 42 47
68
Legal Entitlement Issues
  • Contractual Issues
  • Generally derived from some kind of change in
    condition described in the contract.
  • Implied Warranties
  • Breach of some implied term required to implement
    an economic contract, such as acting in Good
    Faith, allowing access to the work, and documents
    free of material defects.
  • Statutory Entitlement
  • Laws that preempt contractual requirements, such
    as antiquities and environmental Acts.

69
What Wins Claims?
  • Facts, facts and more facts
  • 3 most important things about projects/claims
    Documentation, Documentation, Documentation.
  • Document the factors that impact productivity
  • Daily logs
  • Pictures/video
  • Emails
  • Change Orders
  • Written notice to GC

70
What Do You Have To Prove?
  • Impact claims
  • Must collect data to support claim
  • Document in writing the process
  • Create a paper trial of what happened and why

71
Factors That Harm
  • Inspections that delay
  • Quality of the plans/specs/RFIs
  • Weather
  • Crowding/Interference
  • Out of sequence
  • Remobilize

72
Solutions
  • Cover delay in subcontract
  • Make sure employees are trained
  • Involve your lawyer and consultant early rather
    than late
  • Use of Digital Diary

73
Next Steps in the Research About the Study
Booklet itselfQuestions?
74
Example of Use
  • The project was estimated to take 750 man-days
    and took instead 916 man-days.
  • The project went reasonably well with no major
    problems such as extreme weather but the labor
    reports showed that the workers could not reach
    the production rates that your experience
    estimators expected, in fact, it was only 83.

75
Calculating Fragmentation
  • Most of the work was available for the drywallers
    to work in the correct sequence.
  • There were some occasions where it was necessary
    to remobilize the workers to go back to areas
    that had already been worked upon but nothing
    that out of the ordinary
  • This project was unusual in having more hurry up
    and wait situations though where the contractor
    needed to keep adding workers for short time
    periods and then reducing the number of workers
    shortly thereafter due to schedule problems from
    the general contractor
  • The result is that you filled out the
    Fragmentation scoring sheet as follows.

What was the impact of (Circle one value in each row) None Low Moderate High Severe
Out of sequence work 0 1 2 3 4
Remobilization and Go Backs 0 1 2 3 4
Ramp Ups and Ramp Downs of labor forces 0 1 2 3 4
Sum of circled scores  
Fragmentation Sum/3  
76
Calculating Congestion
  • The general contractor was able to avoid having
    trade stacking occur on this project but the high
    intensity of the schedule and resulting staffing
    requirements meant that your own crews did not
    have enough space to work.
  • Also while the other trades did not get in your
    workers way, they were frequently having to work
    their way around the supplies and equipment on
    the job-site.
  • The congestion worksheet is then filled out to
    calculate an overall congestion score.

What was the impact of (Circle one value in each row) None Low Moderate High Severe
Trade stacking (Labor congestion due to other trades) 0 1 2 3 4
Labor congestion of your crews 0 1 2 3 4
Congestions due to materials and equipment 0 1 2 3 4
Sum of circled scores  
Congestion Sum/3  
76
77
Was it Likely that the Loss was the Result of
Congestion and Fragmentation?
  • Productivity loss occurred but can it be
    explained by the congestion and fragmentation?

78
Plot the Results
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