GSA construction contracts in which private construction firms design and build on government contracts. The projects may include the construction of office buildings, educational buildings, sports facilities, medical buildings, transport infrastructure, and other facilities. As the government is the most trustable client, bidding on federal construction projects can be very beneficial. Most business companies work solely on government projects.
How To Bid for Federal Construction Contracts?
For any GSA contract, companies must have to follow these initial steps:
- Registering their business with SAM. They’ll get NAICS and DUNS numbers among everything.
- Finishing the required GSA training programs.
- Meeting all GSA contract requirements.
- Follow the schedule.
Special Requirements
In addition to basic federal contract requirements, bidding on construction projects has some other prerequisites. These include multiple types of bid bonds and some other requirements.
Bid bonds play a role when the winning bidder refuses to undertake, or the contractor fails to fulfill its obligations. As bid bonds save the government against such situations, these are compulsory for all government contracts above $100,000. Mostly, the cost of bid bonds is equal to or higher than the contract price.
These bid bonds are of two types:
- Performance Bonds: If the contractor fails to fulfill the government project requirements, the bond should cover the contractor’s requirements. In such situations, gov will hire another contractor to finish the project accordingly.
- Payment Bonds: The payment bonds ensure that the contractor pays the basic subcontracting costs, including materials and labor. If the contract fails to meet any criteria, the bond steps in.
Prevailing Wage Laws
The employees working on government projects receive average prevailing wages across the industry. The government construction projects ensure that no low-quality and low-paid workers are hired. To achieve this, contractors must submit certified payrolls having information on wages and job type.
Prompt Payment Requirement
The goal of the Federal Prompt Payment Act is to prevent the delay in construction projects due to lack of payment. to contractors and subcontractors. Contractors and subcontractors must include these obligations in every contract with the suppliers.
Who Wins GSA Construction Bids?
The bidder who qualifies to the specifications of the project and has basic skills and resources to fulfill the project wins. Likewise, a bidder having a good skill set and offering the lowest bid among all bidders is more likely to win. The qualities of the winner depend a lot upon what bidding method the government is using for each project.
Construction Bidding Types
Depending upon the nature and situation of a specific project, government buyers may use different bidding approaches. The most widely used government project bidding methods are project delivery and procurement methods. To be competitive in every situation, Contractors must understand these methods.
1. Project Delivery Methods
The government may perform the construction of federal projects in ways. Each method has its pros and cons, but all are fast, effective, and lower-budgeted.
i. Design-Bid-Build (DBB)
It is the most popular method and agencies widely use it. In the Design-Bid-Build approach, the government hires a designer first to build a design for the project. After finalizing the design, a bid for the construction project is published and the winner bid builds the project.
Pros:
- Maximum control of the government over the project
- Federal buyers get better protection against unfair construction bids
- Estimation of project costs is easy
- Buyers have an idea of specifications and only need to consider bid price
Cons:
- In case of any design discrepancies, the risk of unplanned expenses
- The agency shares project execution responsibility with the contractor
- More risks of compromised quality
ii. Design-Build (DB)
This approach requires contractors to fulfill both design and building duties. It is up to the contractor if they are a design-build firm and design by themselves or hire architects. Mostly, contracts outsource a part of the project to subcontractors.
Pros:
- The overall process streamline, and they can government hire new facilities faster
- Costs lower than DBB
- No conflicts, as a single contractor handling every step of the GSA project.
Cons:
- As the government doesn’t hire the architect, the project will be more in the contractor’s best interests than that of the government
- Complex project cost.
- Less control of the government over the construction project may result in potential quality problems.
iii. Construction Manager at Risk (CMR)
In the CMR method, the government hires a consultant to manage the design and construction process at a Guaranteed Maximum Price (GMP). This approach combines the features of both DBB and DB approaches. Like Design-Bid-Build, different firms will design and build. On the other hand, a single party will handle both stages, like in Design-Build.
Pros:
- Maximum control over costs and risks
- Faster project execution
- Enhanced quality, especially for large scale projects
- Construction managers work in the best government’s interests
Cons:
- Not suitable for smaller projects
- Limited Price competition
- The responsibility of each project will be on government
1. Procurement Methods
It includes:
i. Lowest Bid
This approach is usually used in coordination with the Design-Bid-Build delivery method. As the specifications are already defined, the decision is made only on price. The contractors that bid the lowest win.
ii. Best Value Source Selection
In this principle, the agency also evaluates factors other than the price. Complex consideration of multiple factors helps to achieve the best value for the price. The most important of these factors are past project evaluation.
iii. Qualification Based Selection (QBS)
Here, the cost does not matter at all. The professional qualifications and skills of the contractors are used to select them. The potential contractors are then shortlisted and then the government selects the best one with the lowest bid. The contractors and agencies can negotiate prices in the process.
iv. Negotiated Procurement
This is where the government directly negotiates the prices, terms, and requirements of the construction contract with the qualifying contractors. Such procurements are only allowed in specific situations, such as in case of risk to people’s life or property. Or they are allowable when two consecutive public bids have failed.
v. Sole-Source Procurement Method
This procurement method is used when one contractor meets the requirements of the construction projects. Such procurement methods are applicable for intricate or unique projects or in case of emergencies.
