As I’ve stated before, I’m something of a contracts fanatic. I think this stems from the many times as a project manager, some performance disagreement was put to rest with the GC manager admonishing “read your contract.” Having been stung so often has made me a disciple of the deal. I guess you could even say I’ve become a contracts nerd. I am truly fascinated by the whole concept that our system recognizes—even enforces—our right to enter into agreements to perform under mutual obligation. One particular dictum of contract law that I obsess over (one that escapes most exactimators’ attention) states that a counteroffer that contradicts the terms of the offer trumps the original offer. Now, when you consider that a subcontractor’s proposal is essentially a counteroffer to the GC’s invitation to bid, you begin to appreciate the critical role the proposal (aka scope letter, bid abstract, cover letter) plays in the whole preconstruction scheme. And this is why I periodically remind myself (and my readership) what a strong proposal consists of.
A well-crafted bid abstract is a multiple-purpose letter that clearly expresses a listing of values, qualifications, conditions and terms to the general contractor. Aside from assigning value to the work proposed, it establishes the sources of those values, clearly defines the scope of work intended, and it sets forth the terms and conditions under which the subcontractor proposes to perform the work. Plainly, it is a condensed version of a project-specific contract—one that is favorable from the sub’s perspective—and as such must be extremely precise and exceptionally thorough.
Sources stated at the outset. The opening paragraph will customarily cite the proper name of the project, the location, phase and architect. In addition, a thorough scope letter provides the opportunity to state the sources—the bid documents—upon which the bid values are based. Plans and specifications with dates included, plan sequence of issue (design drawings, 90 percent drawings, bid set, permit set, deltas, etc.), addenda noted, bid instructions and project schedule should all be duly acknowledged in a comprehensive bid abstract to avoid any potential misinterpretations regarding the basis of the proposal.
Values in bold. Next in the body of the letter come the dollars corresponding with the sections of work. Proper presentation is important here: boldface, large typeface, dollar signs and decimals perfectly placed. But under certain circumstances, even something as basic as the bottom line needs clarification. This is especially true if complementary sections of work to studs and drywall are involved, in which case it becomes necessary to break out the bid between the sections. However, breakouts without explanation can be taken out of context and mistakenly applied. For example, one may be proposing on EIFS in addition to framing and drywall. The astute bidmeister will break out the stationary scaffold number but must explain his reasoning in the qualifications below. That is, scaffold is included not only for EIFS areas, but for installing the sheathing at areas with other skins (metal panel, for instance) requiring a framing/sheathing substrate. An express qualification that breakouts are for comparative calculations only and that the proposal is to perform all scopes of work combined would go a long way toward eliminating confusion in such cases.
Qualifications as bullet points. A list of inclusions and exclusions is essential to a good scope letter.
The inclusions component of the qualifications section should list, in bullet points, a number of somewhat basic items just to assure the GC that you are familiar with the bid requirements—for example, “Level 5 finish provided at all exposed areas” and the like. Moreover, it should identify any complementary installations provided in the assemblies, such as acoustical insulation at demising walls and corridors. In addition, this portion of the proposal should name the job-specific particulars that are derived or inferred from the bid docs. For instance, it should be stated that acoustical caulk at all sound-rated walls is included, or that the bid includes providing tile-backer board at all restrooms.
The exclusions portion of the qualifications section should include those questionable scope items (again, in bullet points) that the bidmeister chooses to omit from the base bid but may be expected to provide. Here, an alternate price can be assigned. For example: “Engineered shop drawings excluded. Add $15K if required.” Another possibility: The project may include extensive demolition of drywall partitions, a significant item in a remodel project that is not included in the base bid. The astute exactimator will exclude this and any temporary partitions but give a unit add alternate price to provide the temp walls. Simply put, the exclusions portion of the qualifications section should dispel any erroneous assumptions that the GC might make, but like the list of inclusions, be tailored to the specifics of the project.
A clarifications subsection may be deemed a necessary addendum to a good scope letter; it all depends on the degree of ambiguity in the bid documents, constructability issues or external conditions. This component is reserved for scope issues that cannot otherwise be clearly expressed in the inclusion/exclusion subsections. Items such as material/labor escalations, site conditions, unit labor prices for added work or even onerous contract terms may be addressed in this final subsection.
Vince Bailey is an estimator/project manager working in the Phoenix area.
