How Our Construction Bidding System Works Against High Quality Construction

Recent observations of the deconstruction of parts of several buildings have convinced me that our bidding system actually works against our interest in high quality construction. That’s something to remember when thinking about the need for construction quality that goes along with green and sustainable building practices. Sustainable building practices demand careful attention to detail (air sealing, for example), but our system of awarding contracts to the lowest bidder actually rewards inattention. Consider the following:

The lowest general bid for a building project is typically the sum of all the lowest subcontractor bids for sub-trade work, the lowest material bids, and the lowest bid for work that will be done by the general contractor and not subbed out. In many cases, the general bid will also include “plugs”, amounts that the general bidder carries in advance of actually getting commitments from subcontractors, and those parts of the work are then “shopped” after the contract is awarded. In the case of bid shopping, the “plug” amount is likely to govern the quality of the resulting work.

Overall, this low bidding system as we know it can result in a tug of war throughout the life of a project: the owner and architect struggle to realize the intended scope and level of quality, while the general contractor, subcontractors, and suppliers struggle to complete the project for the amounts bid without losing money. Lines, words, and numbers on drawings and in construction specifications can become central factors in arguments about whether something is or is not required as part of the contracted work.

On projects where the architect has a role that is limited in terms of the type or extent of drawings and specifications and the extent of construction observation and administration, there can be a greater divergence between the design intent (either drawn or not drawn) and the actual construction. On developer led projects or contractor led design-build projects where the architect is expected to provide only limited drawings and is excused from regular construction observation and where the developer or design-builder are also realizing cost savings in project management, coordination, and job site supervision, subcontractors and others involved in the work may take shortcuts and cover up work that is incomplete in order to make money or minimize their own costs on the project. On such projects, those doing the hands-on work may never see drawings or may be expected to know what to do without drawings or close supervision. Deconstruction in response to post-construction building problems like leaks and rot may reveal missing layers of necessary material and improper installation of building components. In some cases, the results are attributable to a lack of coordination among sub-trades due to incomplete subcontracts (in one case bolts were excluded from framing subcontracts and were to be provided by others, but no one provided them). In other cases, the line that separates one sub-trade from another may be precisely a line where one stops and another starts but where good construction practice requires a coordinated under-lapping and over-lapping instead of a distinct break that provides no protection for the underlying structure. Because time is money (“of the essence”), the shortest path to project completion may include unflagged substitutions that save time and builder cost but also reduce quality and building performance.

Green and sustainable building requires a better approach to bidding and construction quality control and should include incentives that are tied to building performance. Although there are many conscientious builders who are interested in making green buildings, our bidding system that inadvertently rewards short cuts and omissions may continue to limit our access to greener construction and better building performance.

Posted in Project Administration, Project Management

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