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Summing It All Up, Part 2

I’m just a soul whose intentions are good—oh Lord, please don’t let me be misunderstood!

—Bennie Benjamin (as sung by Eric Burdon)

In the previous installment, I believe we pretty well established the pivotal role that an effective proposal plays in the overall scheme of the estimate. Clearly, as the sole expression of an offer to the general contractor, a good bid abstract must effectively convey your intentions in several critical respects. It assigns values to the proposed project performance objectives, identifies the sources of those values, defines and clarifies the scope of work associated with those particular values, and proposes the terms and conditions you intend to abide by if your firm is selected to perform the work.

Remember, the devil is in the details, so one of the most crucial properties of an effective proposal is the inclusion of a scope clarification section. This component of the bid abstract defines scope by setting forth a collection of inclusions, a set of exclusions and an instructive subsection of relevant qualifications. A reader-friendly format might apply an outline form with bullet points under each of the three subheadings and separate sets of subheadings for multiple scopes (i.e., paint, plaster, acoustics).

The inclusions component of the scope section should list a number of somewhat generic items just to assure the prospective client that you are including a complete package, for example “5/8” Type X drywall at all assemblies,” et cetera. In addition, it should declare any complementary installations you may provide in your assemblies, such as acoustical insulation and/or caulking. Equally important, this itemization should state the job-specific particulars that are derived or inferred from the bid docs. For instance, you’ll want to assert that you are providing a Level 5 finish per specifications, if that is the case—or that you included tile-backer board at all restrooms per note such-and-such. Or perhaps the bid instructions directed you to include a certain allowance for patch and repair. This is the place to acknowledge those sorts of things to narrow the focus of your proposal and to reassure the GC that you understand the bid requirements.

The exclusions portion of the scope section should dispel any erroneous assumptions that the GC might be inclined to make, but like the list of inclusions, be tailored to the specifics of the project. Clearly you don’t want to clutter your proposal with a tedious laundry list of irrelevant eliminations that are bound to annoy the reader. Many estimators use previous scope letters as templates and inadvertently leave in exclusions that don’t always apply—a sloppy practice that defeats the original purpose of dispelling confusion. On the other hand, there are many boilerplate items, such as facilities (temporary power, water, Dumpster, etc.) that you will want to cite as someone else’s responsibility on virtually every job. Moreover, you don’t want the GC to assume you have included any work items that he might misconstrue as part of your scope by default, such as engineering or premium for overtime if they are not specifically required. Another common illustration: The overall project may include extensive demolition, a task that you have omitted from your takeoff because you infer that a demo contractor will cover your portion. Obviously, composing an effective exclusions subsection requires striking a delicate balance between competing considerations. A good rule of thumb here: Be thorough, but stay relevant.

A clarifications subsection may or may not be a necessary addition to a good scope section; it all depends on the amount of gray area in the documents, constructability issues and/or the amount of latitude you want to take in your interpretation of the intent. This component is reserved for scope issues that cannot otherwise be clearly expressed in the inclusion/exclusion subsections. Superior or cost-effective substitutions in poorly designed assemblies (i.e., metal strap backing in lieu of wood blocking) and clarification of ambiguous terms or parameters (i.e., “work extents limited to cross-hatched area only”) fall into this category, as do possible value engineering items.

No proposal is complete without a boilerplate statement of terms and conditions. The objective here is to submit a “Reader’s Digest” version of a sub-friendly contract in small print as a starting point for future negotiations. Payment terms, changes in work, schedule considerations, overtime, hourly labor rates and dispute resolution are just a few critical items to be included in a comprehensive terms section. Granted, few GCs will accept your terms carte blanche (I’ve encountered a few who actually did!), but I find that most are willing to at least strike the more egregious items from their own agreement form once they see how reasonable your proposal terms are.

Certainly you have surmised from these two columns what a crucial and sophisticated piece of correspondence an effective proposal must be. However, I am confident that if you follow the suggested format, strive to be thorough and tailor your scope letter to the specific project at hand, your proposal will steer you through the dire straits of bidding work, sparing you any unfortunate misunderstandings.

Vince Bailey is an estimator at E&K of Phoenix.

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