Addenda issued after bid opening

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Author Message Sheldon Wolfe Senior Member Username: sheldon_wolfe Post Number: 211 Registered: 01-2003 Posted on Wednesday, November 01, 2006 - 05:08 pm:    AIA A701 has this definition: 1.3 Addenda are written or graphic instruments issued by the Architect prior to the execution of the Contract which modify or interpret the Bidding Documents by additions, deletions, clarifications or corrections. It also says 3.4.3 Addenda will be issued no later than four days prior to the date for receipt of Bids except an Addendum withdrawing the request for Bids or one which includes postponement of the date for receipt of bids. Absent any modification of these requirements, it appears the only addendum that could be issued after bid opening would be one that would either kill the project or set another bid date. The way this is written seems a bit odd, as the instructions and general conditions refer to addenda as being issued before award of contract, require all addenda to be listed on the bid form, and allow only two types of addenda just prior to bid opening. In contrast, EJCDC leaves no ambiguity, defining addenda as "Written or graphic instruments issued prior to the opening of Bids..." One public sector owner I worked for had a clever way of making changes after selection of a contractor. They would negotiate changes to the scope of work and resulting change in time or price before signing the agreement, then issue a change order immediately after signing to incorporate the changes. The effect was the same as issuing an addendum after bid opening, but it was accomplished in a different way. Do you know of any substantive addenda that have been issued after bids were opened? Lynn Javoroski CSI CCS LEED AP SCIP Affiliate Senior Member Username: lynn_javoroski Post Number: 449 Registered: 07-2002 Posted on Wednesday, November 01, 2006 - 05:14 pm:    We have gone around and around on the matter of what to call a change when there is no clear or definitive name. We've come up with "Supplemental Instruction"...it can be issued any time. The financial impact of the change, of course, can make a huge difference in the manner of issued changes. (Not sure if this answers the question, however) Ronald L. Geren, RA, CSI, CCS, CCCA, MAI Senior Member Username: specman Post Number: 356 Registered: 03-2003 Posted on Wednesday, November 01, 2006 - 05:27 pm:    I just went through one, and I did one about 6 years ago. Both were the result of the lowest bid exceeding the budget, but were within a reasonable amount to negotiate through "VE"--AKA cost cutting. The amount on this latest one was a $6 mil deduction on an approximate $60 mil project. It was agreed that the Addenda was the best means of documenting the modifications of the documents through the negotiation phase. Doing a charge order after the fact would not have worked in either of the two cases, since the owners (public entities) could not award a contract for the actual bid amounts. But, your reference to Section 3.4.3 is a good one, and should be modified. Ronald L. Geren, RA, CSI, CCS, CCCA, MAI Senior Member Username: specman Post Number: 357 Registered: 03-2003 Posted on Wednesday, November 01, 2006 - 05:52 pm:    I offer the following suggested language for Section 3.4.3 in A701 to address this issue, which could potentially create a problem (it has never come up before to my knowledge, but given time...): Add to the end of paragraph: "Prior to Contract execution, Addenda may be issued after opening of bids to modify the Bidding Documents as a result of negotiations between the Owner and apparent low bidder." Another option, for those uncomfortable with using addenda is this manner, is to utilize Section 8.1.7 of A101 to attach any other documents forming a part of the Agreement. A list of changes, similar to an Addendum, could be added here to reflect any negotiated changes after opening of bids and prior to Contract execution. If A101 is not used, I'm sure most agreement forms have a similar means of identifying all the documents forming a part of the Contract. Nathan Woods, CCCA, LEED AP Senior Member Username: nwoods Post Number: 135 Registered: 08-2005 Posted on Wednesday, November 01, 2006 - 05:58 pm:    I'm not sure what the uniqueness of this situation is. It seems to happen all the time, usually because the Bid set is the plan check resubmittal/permit set on faster paced projects. The first thing that occurs after the bid is a Bulletin, Change Order, whatever, is published with the IFC set "Issued for Construction" set, lovingly referred to Delta 1 :-) Wayne Yancey Senior Member Username: wyancey Post Number: 212 Registered: 05-2005 Posted on Wednesday, November 01, 2006 - 06:22 pm:    I have used "Post Bid Addendum" but at the end of the day it is the same as the method used by Sheldon's public sector owner. It is much the same as awarding the Contract based in the lowest responsible or preferred bidder and adjusting the contract price after selection of accepted alternates. Nobody should be in hot water if these terms of reference are clearly explained in Division 01 Section "Alternates". My standard language in Alternates section is: "Bids shall be evaluated in the "Base Bid" price. After determination of preferred bidder, consideration will be given to Alternates and Bid Price adjustments." It could also be called an Owner-Initiated Change Order or Proposal. Wayne Anne Whitacre, FCSI CCS Senior Member Username: awhitacre Post Number: 406 Registered: 07-2002 Posted on Wednesday, November 01, 2006 - 06:26 pm:    Sheldon: we used to call those "modifications" and there was a very clear progression of addenda (before the bids were taken); modifications (after the bids were taken but before contract signing) and then change orders (after signing). does no one use this anymore? John Bunzick, CCS, CCCA Senior Member Username: bunzick Post Number: 605 Registered: 03-2002 Posted on Wednesday, November 01, 2006 - 06:28 pm:    However, in some jurisdictions (for public work), there is NO possibility of doing any negotiating. It's strictly a take-it or leave-it proposition. In Massachusetts, that means a rebid if you're over budget. This is only permitted if the design documents are modified, presumably to get within the budget. You can't really just rebid and hope for better numbers. With private work, of course, this entire issue is much simpler as the owner can just negotiate a new price and sign the contract for that amount. Ralph Liebing, RA, CSI Senior Member Username: rliebing Post Number: 487 Registered: 02-2003 Posted on Thursday, November 02, 2006 - 08:36 am:    There is, of course, the prospect of other bidders yelling and screaming [taking legal action???] about negotiated changes made after the bidding. They would ask why such were not made known via an Addendum BEFORE the bidding. But damning the torpedos, I like the absolute purity and tradional aspect of the EJCDC definition, and would propose that changes after the bidding be called what they are,i.e., "Negotiated Changes to Project After Bidding", and make that document part of the contract. David J. Wyatt Senior Member Username: david_j_wyatt_csi_ccs_ccca Post Number: 39 Registered: 07-2005 Posted on Thursday, November 02, 2006 - 09:29 am:    PRM 5.12.2 defines the issues clearly. It adds this perspective: "The AIA Document A201 definition reflects the perspective of the private-sector owner who is not bound by public policy and can negotiate and issue addenda right up to the time of execution of the agreement. However, the primary purpose and use of an addendum is to make changes before opening of bids/proposals. The EJCDC C-700 definition reflects the view of the public works projects that may preclude modification of procurement documents between bid opening and execution of the agreement...." I have only encountered the so-called "post-bid addendum" in the context of large private sector projects, and then only at the request of the client who may have important information that should have been issued earlier but which was late in arrival. It is such a client who tends to warp the established protocol of professional practice. We go along in order to maintain the business relationship, but I don't recommend that the client's tendencies lead us to do it on our own. Mitch Miller, AIA ,CSI, CCS, MAI Senior Member Username: m2architek Post Number: 93 Registered: 02-2004 Posted on Thursday, November 02, 2006 - 09:57 am:    I totally agree with David. There are too many openings for others to point and blame the professionals if we do otherwise. The Addenda should be used for modifications prior to bid. That keeps it clean and simple. Bending to clients' whims can only get us in trouble. I believe that when we stand our ground professionally, the client respects us. When the client doesnt like that, and moves on, he has done us a favor, and given the trouble to someone else. Mark Gilligan SE, CSI Senior Member Username: markgilligan Post Number: 109 Registered: 05-2005 Posted on Thursday, November 02, 2006 - 10:57 am:    Why not notify the Client of the several options along with the issues. Tell him that there are legal implications and ask for direction. When you then follow his instructions you should essentially have no liability. Sheldon Wolfe Senior Member Username: sheldon_wolfe Post Number: 212 Registered: 01-2003 Posted on Thursday, November 02, 2006 - 11:39 am:    The PRM comments offer a possible explanation for allowing substantive addenda to be issued after bid opening; the problem is that, as the A701 is written, there is no provision for doing so. I wonder if the author of this part of the PRM was speculating, or if there exists some justification for what I consider an odd definition of addenda. It's possible that the text is a leftover from a previous version that did address the issue, or that it was intended to allow the use of only those addenda that changed the bid date or withdrew the request for bids. Even in private sector work one should expect a clear, consistent explanation of how bids will be treated. Post-bid, pre-award negotiation is not excluded by the A701, but if done it should use something other than an addendum, or the A701 should be modified to state that addenda may be issued after bids are opened. Robert E. Woodburn Senior Member Username: bwoodburn Post Number: 142 Registered: 01-2005 Posted on Thursday, November 02, 2006 - 12:13 pm:    Perhaps there isn't really a conflict between the two definitions. The Instructions to Bidders govern the bidding process. The PRM says, "Typically, an addendum is issued prior to the receipt of bids or proposals." Note, "Typically." Obviously, any addendum that affects the bids must be issued before the bid date, and 3.4.3 assures bidders that such addenda will not be issued so close to the bid date that they are excessively troublesome. After the bids are in, opened, read, considered, etc., the Instructions to Bidders no longer apply; their purpose has been fulfilled. At that point, the definition in 3.4.3 no longer applies, but the one in 1.3 still governs. 1.3 in effect puts the bidders on notice that addenda may be issued at any time prior to execution of the contract; i.e.; there may be a necessity to adjust a bid or negotiate the Contract Sum after the bids are in. Typically, the Owner reserves the right to waive informalities in bidding, and to accept or reject any bid that it deems to be in its own best interest, and such negotiation would likely be preferable to the Owner to rejection of all bids. Modifications (including but not limited to change orders) are changes to the contract, i.e., after execution of the contract. How can the Owner issue a change order (or any modification) if there's no contract to modify? Ralph Liebing, RA, CSI Senior Member Username: rliebing Post Number: 488 Registered: 02-2003 Posted on Thursday, November 02, 2006 - 01:11 pm:    Could it be that we are not talking about a document at all [and I'll amend my previous posting] Most contract forms refer to the drawings and specifications, etc., as the basis of the contract. So by merely listing, "....in accordance with............., and the following:...", one could list the changes directly in the contract [and could refer to attachments if there are some that describe or depict those changes]. To fool around, post bidding, really is risky in that other bidding will take umbrage for not being able to bid on the same basis. The timing of the "late changes" is crucial. It can appear to be a "set-up" wherein the bidder is preferred in the first place, and then other aspects of the work are negotiated in. And if it is private work, the owner can do as she/he please but need not be so widely open to what goes on. Susan McClendon Senior Member Username: susan_mcclendon Post Number: 55 Registered: 01-2005 Posted on Thursday, November 09, 2006 - 11:10 am:    Since the instructions to bidders (A701) are not contract documents, a "violation" of its provisions is not the same as a violation of contractual procedures. In the public agency cases, it is not the instructions to bidders that might have been violated but the law regarding public bidding. If the public bidding law allows the negotiations with the low bidder as described, it doesn't really matter how the addenda/modifications are incorporated into the contract documents, as long as that is acccomplished. Angry bidders aside, there is still the question of whether the Owner could have gotten even better bids if the original bidding documents had included the lesser requirements that the negotiation resulted in. Sheldon Wolfe Senior Member Username: sheldon_wolfe Post Number: 213 Registered: 01-2003 Posted on Thursday, November 09, 2006 - 11:41 am:    Public agencies regularly add much or all of the bidding requirements to the contract documents, so the convenient distinction is lost.