Alternates

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Author Message David Axt, AIA, CCS, CSI Senior Member Username: david_axt Post Number: 1176 Registered: 03-2002 Posted on Thursday, April 21, 2011 - 01:40 pm:    Can an Owner chose to delete a bid alternate in the middle of a building a project? I have a PM that wants me to write a bid alternate in the project but with the idea that the Owner may choose to not exercise that alternate. Wayne Yancey Senior Member Username: wayne_yancey Post Number: 447 Registered: 01-2008 Posted on Thursday, April 21, 2011 - 01:57 pm:    David, Please clarify because your first sentence says "...in the middle of a project?" while the second sentence says "....a bid alternate...." During bidding? During construction? Alernates do not have to be accepted after the bids close. Alternates complicate the preparation of the Bid. They also complicate Bid evaluation. For these reasons they should be avoided. However, they can be used providing they are clearly defined and are for the purpose of limiting the scope of work if the Owner’s budget is exceeded by the bid price. They should be mentioned both in the Bid Form (Additional Bid Information Form) and applicable sections of the Specifications. Ronald L. Geren, AIA, CSI, CCS, CCCA, SCIP Senior Member Username: specman Post Number: 944 Registered: 03-2003 Posted on Thursday, April 21, 2011 - 02:02 pm:    If the alternate was accepted and specifically included in the contract documents, then the only way to delete an accepted alternate (now a contract requirement) is by change order. Ron Geren, AIA, CSI, CCS, CCCA, SCIP www.specsandcodes.com David Axt, AIA, CCS, CSI Senior Member Username: david_axt Post Number: 1178 Registered: 03-2002 Posted on Thursday, April 21, 2011 - 02:04 pm:    I meant to ask, "Can an Owner decide not to exercise an alternate during construction?" Sheldon Wolfe Senior Member Username: sheldon_wolfe Post Number: 482 Registered: 01-2003 Posted on Thursday, April 21, 2011 - 02:06 pm:    We've done that a few times. It always seems odd, but it has worked. The instructions require that the price of alternate bids be held for some number of days after award of contract. Wayne Yancey Senior Member Username: wayne_yancey Post Number: 448 Registered: 01-2008 Posted on Thursday, April 21, 2011 - 02:07 pm:    Yes. As Ron says. Lynn Javoroski CSI CCS LEEDŽ AP SCIP Affiliate Senior Member Username: lynn_javoroski Post Number: 1237 Registered: 07-2002 Posted on Thursday, April 21, 2011 - 02:09 pm:    If at all possible, alternates should always be "Add Alternates" for better pricing. It's easier to figure how much extra something will cost than it is to figure how much less something will cost (at least according to the contractors I've talked with). Many public entities require all add alternates; the base bid must be within the estimate/funds available or the project cannot proceed. Many also require that alternates be "in order". That is, the Owner can only accept alternate B if they accept alternate A and C only if A & B, and so on. Alternates in those cases have to be carefully written. But usually, during the time between Bid opening and acceptance/signing the contract/notice to proceed, the owner can accept or reject alternates. Sheldon Wolfe Senior Member Username: sheldon_wolfe Post Number: 483 Registered: 01-2003 Posted on Thursday, April 21, 2011 - 02:19 pm:    Lynn, I've been told numerous times by estimators that add alternates generally work better for the owner, for the reasons you state, so that's my stated preference. They also say it's psychologically better, as, assuming the bids are low, the owner gets to add stuff, a much happier prospect than taking things away. Across the Mississippi from you, the agencies generally require deduct alternates, and will not be convinced to do otherwise. Most of them also require that they be taken in order, which leads to some interesting discussions. The interesting thing is that the statues they work from differ little, yet each agency finds amazingly different ways to interpret them. Private sector is much easier. One of CSI's original five goals was standardization of specifications for public works. Unfortunately for everyone in construction, it failed. If CSI wants to make a significant impact on construction, this would do it. Lynn Javoroski CSI CCS LEEDŽ AP SCIP Affiliate Senior Member Username: lynn_javoroski Post Number: 1238 Registered: 07-2002 Posted on Thursday, April 21, 2011 - 02:45 pm:    Wow...I've not done much public work west of here, and didn't know that, Sheldon. But Milwaukee County and a couple of federal agencies that I've written specs for did it the way I stated. OK, let's mobilize and get those public entities to toe the line. (Unregistered Guest) Unregistered guest Posted on Thursday, April 21, 2011 - 02:41 pm:    Adding or deleting an alternate after the project has started may affect the price. On a certain public works job many moons ago, this project was almost complete and the owner wanted to use up the rest on the contingency fund. One of the alternates was to pour some additional sidewalks. The sidewalks in the base bid were poured in October. The owner thought the contractor should do the alternate for the same price as the stated on the bid form even though the contractor would have to bring all of his equipment and forms back out to the jobsite in the middle of January. The owner came around and paid for winter protection and remobilization. Lynn Javoroski CSI CCS LEEDŽ AP SCIP Affiliate Senior Member Username: lynn_javoroski Post Number: 1239 Registered: 07-2002 Posted on Thursday, April 21, 2011 - 02:54 pm:    Unit pricing with the bids might have helped there if it was suspected that would happen. The contractor could have figured when things would be likely to happen based on the construction schedule. Of course, there are locations in the country where there's not necessarily a whole lot of difference between October weather and January weather...there just might be a couple of more feet of snow to clear. (LOL) J. Peter Jordan (Unregistered Guest) Unregistered guest Posted on Thursday, April 21, 2011 - 03:16 pm:    This question first came to me about 16 years ago when I was teaching the CDT class at the University of Hawaii. In my experience I had never heard of an alternate being selected after contract execution, but I did not see why it couldn't be done that way. Doesn't have anything to do with alternates, but does illustrate what can happen when purchase of individual products is deferred. I recently had a project where an item specified for a public project was no longer available when the Contractor decided to "buy" it. He submitted a change order for more than $3,000 (probably about what the original item cost). Architect and Owner have been resisting that request. Owners are often unaware of the cost of out of sequence work as illustrated by (Unregistered Guest). I think that I have seen language to the effect that the proposed cost for alternates remains in effect for 90 (or 45 or 60 or 120) days after contract execution. That would give some protection to the Contractor and alert the Owner to the realities of construction scheduling and coordination. (Unregistered Guest) Unregistered guest Posted on Thursday, April 21, 2011 - 03:44 pm:    Adding or deleting an alternate after the project has started may affect the price. On a certain public works job many moons ago, this project was almost complete and the owner wanted to use up the rest on the contingency fund. One of the alternates was to pour some additional sidewalks. The sidewalks in the base bid were poured in October. The owner thought the contractor should do the alternate for the same price as the stated on the bid form even though the contractor would have to bring all of his equipment and forms back out to the jobsite in the middle of January. The owner came around and paid for winter protection and remobilization. Robert W. Johnson Senior Member Username: robert_w_johnson Post Number: 146 Registered: 03-2009 Posted on Thursday, April 21, 2011 - 04:42 pm:    I don't understand the language being used in this discussion. You don't add or delete alternates unless you are adding or deleting an alternate requirement by addenda. After proposals/bids are recieved, you accept or reject alternates. The contract documents state how long alternate prices are good for - usually in the Division 01 Alternate section. This often is only until the execution of the agreement but may be for a stated number of days after the date of the receipt of proposal/bid, the notice to proceed, or contract execution. The stated time period might vary for different alternates. If the time period for acceptance of alternates is not stated in the contact documents, you are in trouble with an ambiguity. Wayne Yancey Senior Member Username: wayne_yancey Post Number: 449 Registered: 01-2008 Posted on Thursday, April 21, 2011 - 04:54 pm:    The add/deduct choice has to do with the $ value of the alternates that either adds $ to or deducts $ from the base price, for comparison. As Bob clearly states, if the price is fair and reasonable or unfair and unreasonable, after proposals/bids are recieved, you accept or reject alternates based on $. Once you accept an add alternate but subsequently decide to delete the add alternate, a change order is issued to adjust the contract price but under new terms of reference after the passage of time. Hardship may be experienced by the GC. (Unregistered Guest) Unregistered guest Posted on Friday, April 22, 2011 - 12:28 pm:    I offer this tidbit from MasterSpec evaluation sheet regarding labeling alternates. It has been my experience that labeling "add" or "deduct" is unnecessary, and can cause more problems for the Architect than simply allowing contractor to indicate: Project Scope: Alternates that change the scope of the Project are sometimes referred to as add or deduct alternates because they add something to or take something away from the base bid. The architect should consider carefully whether labeling alternates as such is advisable, as it is not always possibly [sic] to accurately determine whether a given alternate will result in an add or deduct from the base bid. Lynn Javoroski CSI CCS LEEDŽ AP SCIP Affiliate Senior Member Username: lynn_javoroski Post Number: 1241 Registered: 07-2002 Posted on Friday, April 22, 2011 - 02:23 pm:    My typical is "add or deduct" thus leaving it up to the contractor, because sometimes alternate products, or alternate work, can fool, as stated above. If, however, it is clear that the work is additional (base bid is to leave an area unfinished and the alternate is to finish it) it makes some sense to identify the work as being understood as additional. Ronald L. Geren, AIA, CSI, CCS, CCCA, SCIP Senior Member Username: specman Post Number: 945 Registered: 03-2003 Posted on Friday, April 22, 2011 - 02:32 pm:    Not to toot my own horn, but I wrote an article on just this subject about a year ago, which is available on my website at http://www.specsandcodes.com/Articles/Keynotes%20No.%202%20-%20Describing%20Alternates.pdf Ron Geren, AIA, CSI, CCS, CCCA, SCIP www.specsandcodes.com Sheldon Wolfe Senior Member Username: sheldon_wolfe Post Number: 484 Registered: 01-2003 Posted on Friday, April 22, 2011 - 02:38 pm:    In many cases, the description of the alternate will indicate if it will be an add or deduct; "Add fifth floor", "Omit foundation". If it's substitution of an item, it may be obvious, but not always. I recall an alternate that required use of a different type of doors. The manufacturer assured me it would be less expensive, and gave the same price to the bidders. Surprise! Some contractors bid it as an add, others as a deduct. I'm sure unfamiliarity had some part in their calculations. Rather than calling them add or deduct, I have a column with add/deduct for each item, with the instruction to circle one. No problems; no one has to decide if they should enter a negative number. Another issue related to alternates is separating them by discipline, e.g., A-1 for architectural and M-1 for mechanical. I believe it is better to list all alternates without designation. I have seen problems trying to tie one "architectural" alternate with a "mechanical" alternate, and often, what appears to be a purely mechanical or electrical alternate will affect other work. Anne Whitacre, FCSI CCS Senior Member Username: awhitacre Post Number: 1147 Registered: 07-2002 Posted on Monday, April 25, 2011 - 05:53 pm:    in answer to the original question. It is my view that the Owner can do any stupid thing he wants to do but with the following exceptions: 1) if they are a public agency and the statutes and regulations say they can't do it, then they can't do it. some owners will do this anyway, but that's what whistle-blower statutes are for. 2) if they are a private owner, doing or not doing will cost them money. they will never get money back -- any funds "saved" will immediately be taken up by restocking and/or overhead costs. 3) if they are a public owner, they need to recognize that taking or not taking an alternate will upset someone who has the capability of suing the owner. other than those things, yes, the owner can chose to "not exercise" that alternate.