substitution requests prior to bid

Log Out | Topics | Search Moderators | Register | Edit Profile

Author Message (Unregistered Guest) Unregistered guest Posted on Thursday, May 26, 2011 - 01:43 pm:    Do any of you ask for substitution requests to be submitted prior to bid? If so, why? I have done this often because I was taught to do it, but I’ve never really understood the advantage to it. Nathan Woods, CCCA, LEED AP Senior Member Username: nwoods Post Number: 388 Registered: 08-2005 Posted on Thursday, May 26, 2011 - 10:53 pm:    I think its to level the playing field. If you spec mfr A and a bidder wants to use mfr B that is cheaper, by accepting it prior to bid, all other bidders have the option of going with mfr B as well. It feels like something that probably oriented from a well meaning but misguided governmental policy :-) Sheldon Wolfe Senior Member Username: sheldon_wolfe Post Number: 493 Registered: 01-2003 Posted on Friday, May 27, 2011 - 12:13 am:    Misguided? I don't think so. It's not so much leveling the playing field as making sure the owner gets the best price. Scott Mize Senior Member Username: scott_mize_ccs_csi Post Number: 47 Registered: 02-2009 Posted on Sunday, May 29, 2011 - 01:18 pm:    Requesting subsitutions prior to bid has a number of advantages for both Owner and Design Professional: 1) By telling the Contractor to submit subsitutions prior to bid and telling him you won't accept unsolicited requests for substitution after the bid is final, you'll still get RFSs after the bid, but telling him up front not to do it cuts way down on the number of requests. 2) It also cuts down on those requests for subsitution that come the day or week before the product/system is due to be installed and the 'I have to have an answer tomorrow or I won't be able to get the product/system on time' and the 'you *have* to approve this substitution because the product I bid is out of stock/price went up/can't get it on time, etc.'. I'm sure that there are times when the Contractor is faced with anavoidable delays/unavailability/price hikes, but I'm also jaded and cynical about the use of these tactics for no other reason than to save the Contractor money or make his life easier by burning up my CA budget. Jim Sliff Senior Member Username: jim_sliff Post Number: 62 Registered: 08-2010 Posted on Tuesday, May 31, 2011 - 01:48 pm:    Post-bid substitution requests are usually triggered by subcontractors: 1. A rep for a competitive product finding out about the project late in the game and offering a significant discount to the sub. 2. Force of habit - the sub bids the way he always does (only vaguely paying attention to the specs) and if he's awarded the job he wants to use what he always does (this is VERY common with commodity items where availability and lead times aren't issues). 3. The sub's charge account is "on hold" with the specified supplier and he'd have to pay cash to get material (also very common). 4. The sub screwed up - in the paint business when a painting contractor is told he's been awarded a job the first thing he does is panic, go back to the plans and start counting doors to find out how many he missed! 5. "Value engineering" - the sub wants to increase his profit and will solicit bids from suppliers AFTER award; that's because a supplier's first question when a buyer asks for "special pricing" is "Do you have a contract yet?". If so, manufacturers will be far more aggressive and pare pricing to the bone. OTOH, if it's for a pre-bid quote manufacturers are far less likely to cut prices - or if they do, they'll cut them to EVERYONE if they're not specified. Unless there's a verifiable lack of availability (due to raw material shortages, natural disasters, regulatory changes in the time between bid and award - it's happened - or a product being discontinued) there is NO upside to post-award substitutions UNLESS a new, improved and cost-effective product has been developed and tested after the project wet out to bid. If there is what appears to be a valid post-award value-engineering presentation it *might* be to the owner's advantage to accept it...but unless the product is new as noted my red flag goes up wondering why it wasn't presented *PRE* bid. I have been on both sides of this table, and knowing what I do about how subs and GCs operate I require that all requests for substitution be pre-bid. I try not to make them impossible (e.g. "provide certified test reports dated within the last 120 days proving the proposed product meets requirements A,B,L and Z or whatever - when those tests take 6 months to perform) but I close the loopholes as much as I can. Those loopholes and post-award substitution acceptance were what made me money on the contracting side. Also, FWIW, many contractors (especially subs) and material suppliers use the terms "substitution request" and "submittal" interchangeably. I suggest checking all specifiers run a quick check of the use of those terms to ensure there's no confusion or crossover - because there almost always is. Sheldon Wolfe Senior Member Username: sheldon_wolfe Post Number: 495 Registered: 01-2003 Posted on Tuesday, May 31, 2011 - 03:55 pm:    There is a potential upside. Example: Frammis manufacturers A, B, and C are listed as acceptable, and, presumably, their products comply with the specifications. After award of contract, the contractor submits a substitution request, and it turns out products of Frammis manufacturer D comply with specifications, and are available at lower cost. The contractor may pass on to the owner only part of the savings, but the owner still saves money. Why would the owner be prevented from the benefit of a lower-cost product simply because it had not been submitted for prior approval? Ellis C. Whitby, PE, CSI, AIA, LEED® AP Senior Member Username: ecwhitby Post Number: 107 Registered: 03-2003 Posted on Tuesday, May 31, 2011 - 05:47 pm:    OK, the Owner has a potential benefit. But the AE still has to spend time and effort reviewing the substitution to determine if it is truly “equal”. Obviously the effort for this can vary widely. Why should the AEs CCA budget be used for this? Additionally, there is liability if the product fails later. Personally, I am very reluctant to use products that do not have a proven track record, decades preferably. As much as possible, we try to design buildings that have 50 year plus life spans. Let others experiment with the “next great thing”. If an contractor convinces an Owner that the substitution must be made, then the Owner should take all the risk. During design we have months to research products. During substitution review we have weeks at best. J. Peter Jordan (Unregistered Guest) Unregistered guest Posted on Tuesday, May 31, 2011 - 05:44 pm:    I would argue that if Frammis manufacturers A, B, and C are not exclusively specified through the language of "or equal" or "or comparable product", the specification is not "closed" and Frammis manufacturer D may not be technically considered a substitution. Unfortunately, this poses considerable problems for the specifier. Contractors who are not knowledgable or just plain lazy do not really want truely nonproprietary specifications. They want to see what the architect wants or a list of "frammis" manufacturers that the architect is willing to consider. Some owners want to see 3 products or manufacturers; some don't want to see any more than 3 (even if there are 20 manufacturers of equivalent products avaialble). Even if I use very unrestrictive language with my 3 manufacturers, almost everyone associated with pricing or supplying frammises will use the substitution process to qualify their product. Locally, one municiple client takes the positions that the A/E designed it and so everyone has to bid on what has been designed (drawn and specified). After a contract is executed, the contractor has a limited time to submit substitution requests which are considered only when there is considerable savings in time or cost and when the contractor is willing to assume any redesign cost. Substitution requests that do not "show me the money" (or time) are not considered. This is value engineering by its true name. I kinda like that approach. J. Peter Jordan (Unregistered Guest) Unregistered guest Posted on Tuesday, May 31, 2011 - 05:53 pm:    There is a thread elsewhere on the web that goes something like "why don't architects just tell us what they want?" I suspect that it is from someone on the construction side that wants a clearer direction on what to buy and where to buy it. There are very good reasons to be very specific about certain products, and very good reasons to be as generic as possible about others. Sand, for example, should not be specified with a proprietary specification (in almost every case that I can think of). Clear float glass (which is only manufactured by 4 companies in the US should only be specified by refering to the proper ASTM. Any architect who insists on clear float glass from Guardian or PPG, and only from Guardian or PPG, deserves what he gets IMHO. Of course, I do see specs from time to time that specify that the glass has to be LOF, but that really is a different issue. One can avoid some of the hassles of substitutions by more intelligent specifying, saving the proprietary specifications for the items that really matter. Of course, there will always be the contractor that wants to know which manufacturer do you want for ASTM C 90 standard concrete masonry units. Wayne Yancey Senior Member Username: wayne_yancey Post Number: 467 Registered: 01-2008 Posted on Tuesday, May 31, 2011 - 06:10 pm:    Twenty years ago I adopted Maynard Blumer's PRIOR APPROVAL process for substitutions during bidding and after award of contract. Maynard assigned drop dead time and dates for both occurences. Maynard's methods have served me well in Canada and WA. For a copy of his article please e-mail wayne.yancey@callison.com Ronald L. Geren, AIA, CSI, CCS, CCCA, SCIP Senior Member Username: specman Post Number: 950 Registered: 03-2003 Posted on Tuesday, May 31, 2011 - 06:10 pm:    Architects should read closely their agreements with the Owner. Using standard AIA documents, evaluating substitution requests during the construction phase is considered additional services. So, if AIA Owner-Architect agreements are used, without alteration of that provision, architects should be invoicing owners for evaluation of substitutions (See Section 4.3.2.5, AIA Document B101-2007). Ron Geren, AIA, CSI, CCS, CCCA, SCIP www.specsandcodes.com Nathan Woods, CCCA, LEED AP Senior Member Username: nwoods Post Number: 389 Registered: 08-2005 Posted on Tuesday, May 31, 2011 - 06:15 pm:    It is VERY difficult to get paid appropriately to review (and incorprate the additional risk of) substitutions. One reason as that "there are always substitutions, your fee should factor that in." And then, "sure, your additional service will come as a backcharge to the contractor.......eventually?" Ugh. What we do which is similar to what the PRM reccommends is have the Owner accept the subsitutation in concept, and approve the A/E to perform the actual techical review prior. This then sets up the deck for it to be treated as an Add Service. Still VERY difficult to get paid for this. Ronald L. Geren, AIA, CSI, CCS, CCCA, SCIP Senior Member Username: specman Post Number: 951 Registered: 03-2003 Posted on Tuesday, May 31, 2011 - 06:33 pm:    In essence, that is what the AIA document states. Here's the actual text: "To avoid delay in the Construction Phase, the Architect shall provide the following Additional Services, notify the Owner with reasonable promptness, and explain the facts and circumstances giving rise to the need. If the Owner subsequently determines that all or parts of those services are not required, the Owner shall give prompt written notice to the Architect, and the Owner shall have no further obligation to compensate the Architect for those services" Thus, the architect is to inform the owner about the substitution request and get approval to proceed before evaluating the request. Ron Geren, AIA, CSI, CCS, CCCA, SCIP www.specsandcodes.com Jim Sliff Senior Member Username: jim_sliff Post Number: 63 Registered: 08-2010 Posted on Wednesday, June 01, 2011 - 01:04 am:    Sheldon, I agree with you about the potential upside. But in my previous lives 1) working for a manufacturer in sales management and 2) in estimating/project management for a contractor I've never seen a manufacturer or contractor propose a less expensive, performance-equal Frammis (wow - I swear that was a word the late Ed Brannen and I made up for the same use 25 years ago!) AFTER the job's been awarded. Putting my contractor cap on - why in the world would I want to go to the trouble of preparing a substitution request that will *reduce* the value of my contract? I might have manufacturers beating on my door yelling "me too!" and waving performance data and cheaper prices - but if I present that possible change somebody is going to want some money back - and that money lost would otherwise be mine. In a hypothetical situation a manufacturer may offer FREE product to get it introduced - but in my estimating process I built in 5-15% gross profit on the materials to cover related administrative costs. Am I going to reduce my contract amount by the cost of materials, taxes and the "cushion" amount? Not on your life! I'd have absolutely no incentive to pass on ANY savings to anybody - all I'd do is lose money. Value engineering during the bid process can get the (sub) contractor the job by reducing costs without compromising performance. Value engineering performed after award that includes a "give back" by the (sub) contractor sounds nice - but I'm afraid it's just not based in reality. In all my years in this business I have seen it happen that way exactly zero times. I *have* seen it proposed - and by the time everyone knocked all their red flags out of the way it was either a scam or something proposed by a product rep, going completely around the (sub) contractor to try to make a sale. It didn't work. Anne Whitacre, FCSI CCS Senior Member Username: awhitacre Post Number: 1159 Registered: 07-2002 Posted on Friday, June 03, 2011 - 01:35 pm:    I would agree also that I've not had a substitution request in many many years that actually provided real value to the Owner. There may be new products and there may be wonderful products but the newest of them probably provide too many liability issues for most owners, and the more wonderful products have typically been seen, and rejected due to cost or inability of anyone to actually install them. The only substitution requests I've seen that provide value to the owner typically have to do with procedures or methods -- not products. And, those procedures are contractor specific and require more discussion before approval. (and I've had some "free" products -- to get introduced -- fail spectacularly - so they aren't usually considered unless the owner really likes to take a risk. Steve Taylor Senior Member Username: steveatwi Post Number: 38 Registered: 07-2008 Posted on Friday, June 03, 2011 - 07:57 pm:    All this assumes that the specifications are excellent. I know that this is a highly competent group, but I also see the specs you guys don't write. And the specs you wrote 20 years ago that someone has been re-using ever since. Last week I saw a spec that named a subcontractor I know for a fact has been dead for 20 years; he was a friend of my father. When I used to work we generally got the plans and specifications way too late to submit any substitution requests. When discontinued products were listed all we could do was to choose a reasonable substitute and hope it would work out later. I love the idea of iron clad construction documents, and I do see some good ones. The average, however, is not so hot.