Section 7.9 Procurement of Construction Services

Grant Administration: Section 7.9 Procurement of Construction Services

This section describes certain key steps that are required to help ensure grantees comply with federal and state procurement requirements when procuring construction services:

Step 1: Obtain the Appropriate Wage Decision
The DOL has issued a directive that the Davis-Bacon Wage Determination that is in effect on the day the bid opening is the wage decision that must be used for all construction on federally funded projects. In order to comply with that requirement, CDFA has assigned the responsibility of obtaining the appropriate wage decision(s) for a project to the Grantee or its designee. An initial wage decision should be obtained prior to issuing the IFB and provided to the Architect or Engineer to be included in the project bid specifications. The Grantee will need to access the DOL website in order to obtain the Davis-Bacon Wage Determination for the project. The printed copy of the effective wage decision will be required at monitoring. Department of Labor Online Wage Determinations

Step 2: Prepare Invitation for Bid (IFB)
The grantee must develop an IFB that clearly identifies the services required including: all technical specifications required, any other requirements that apply to the contract, and instructions for preparing and submitting a bid. Bid specifications may not identify a specific name brand or provider except if required to identify a piece of equipment necessary for completion of the project. In this instance, the name brand or provider must be followed with the terminology, ‘or approved equals.’ It is the responsibility of the Grantee to provide the bid specifications preparer with the required contract provisions, as specified in the Assistance Agreement, and the Davis Bacon or State Prevailing Wage Decision applicable to the project. The bid specifications must include a statement that the Wage Decision is subject to change and the one that is in effect on the date of the bid opening will be applicable to the total project if the contract is awarded within 90 days of bid opening. If not, the applicable Wage Decision becomes the one that is in effect on the date that contracts are signed.

Step 3: Publish Invitation for Bid (IFB)
The IFB must be advertised in the newspaper of general circulation in the jurisdiction at least one time not less than 14 days before the date set for the opening of bids. This 14-day minimum bidding period is accepted by CDFA but it is advised that communities give bidders more time. The IFB must state the date, time and location for submission of bids. The legal advertisement must provide information pertaining to where the project plans and specifications may be obtained or reviewed. In order to obtain the highest level of free and open competition, publishing the IFB in well-known trade journals and/or sending a copy of the IFB to the area’s local contractors may increase the number of responses received. An example of an IFB advertisement is provided as Attachment 7-12: Sample IFB Publication.

Step 4: Solicit MBE/WBE Responses
The CDBG program requires Grantees to include MBE/WBE contractors to the best of their ability. To that end, a copy of the IFB advertisement must be submitted to the Department of Transportation EEO Coordinator and construction trade publications. Department of Transportation Disadvantaged Business Program

Step 5: Confirm Wage Rates
Six (6) days before bid opening, the grantee must check DOL Online to determine if there have been any modifications or revisions to the Davis-Bacon wage rate decision. If it is determined during the “six day call” that there has been a modification, the grantee will then send it as an addendum to all contractors who received the original bid package.

Step 6: Issuing Addenda
If the bid document is amended during the advertisement period, addenda must be sent to all bidders who have received bid documents. However, addenda may be issued only up to 72 hours of bid opening. All bidders must be sent copies of each addendum and evidence of notification must be maintained in the bid files.

Step 7: Conduct Pre-Bid Meeting
CDFA recommends Grantees conduct a pre-bid meeting on all sealed bid procurements. The pre-bid meeting gives the Grantee an opportunity to explain all state and federal requirements of a CDBG funded project to prospective bidders. A sample Pre-Bid Guide is attached as Attachment 7-13: Sample Pre-Bid Guide.

Step 8: Receive Bids
As bid packets arrive, the time and date the bid was received from the vendor is written on the outside of the bid packet. Any bid received after the date and time due must be rejected and returned to submitter unopened.

Step 9: Open Bids
Bids must be opened and read aloud at a public meeting, at the date, time and location stated in the legal advertisement. The bidder’s name and amount of bid must be read and recorded in the minutes of the bid opening meeting. No action should be taken at the bid opening meeting except by order of the AO to take the bids under advisement. Bid opening meeting minutes and a sign in sheet of all attendees must be maintained for the project records and will be required prior to drawing down any CDBG funds for construction.

Step 10: Make Vendor Selection
The Competitive Sealed Bid method of procurement requires that the construction contract be awarded to the lowest bidder, provided that the lowest bidder is found to be a responsive and responsible bidder. If the bids received are within the project budget, the Architect or Engineer will review all bid packages to determine if each one is responsive and responsible and verify that the bonding and certification requirements outlined in the bid specifications have been included. Upon completion of these reviews, the Architect or Engineer will prepare a bid tabulation sheet, and a written statement to the Grantee or Subrecipient making a recommendation of the lowest responsive and responsible bidder. The bid tabulation must be certified (stamped) by the project Architect or Engineer. If the low bidder is found to be unresponsive or irresponsible and is not recommended by the project Architect or Engineer, the Grantee’s legal counsel must be consulted prior to making the determination to reject the lowest bid and consider the second lowest bidder. A written legal opinion must accompany all procurement documents where the low bidder was not selected in case of a formal bid protest or possible litigation.

Step 11: Award the Contract
After review of the bids, the grantee or subrecipient must award the contract to the lowest responsible and responsive bidder if his/her bid is within the budgeted amount, preferably within 30 days of the opening.

Caution: Contracts are to be awarded within a 90-day period. If contracts are not awarded within 90 days of bid opening, any wage rate modifications that occurred within that 90-day period will apply to the contract. If bids are held longer than 90 days, the grantee must make a “90- Day Call” to CDFA to determine if any modifications have occurred.

If the contract is awarded to a bidder other than the low bidder, the grantee must prepare a written statement explaining why each lower bidder was deemed non-responsible or non-responsive.

• To be responsive, the bidder must have submitted all required documentation. However, the responsiveness criteria must be uniformly applied to all bidders. If one bidder is rejected for failing to submit a particular document, for example, all bidders failing to submit that documentation must be rejected.
  – The grantee must check the contractor and all subcontractors’ names against the Federal Excluded Parties List System (available at https://www.sam.gov/portal/public/SAM/). The grantee will document that the contractors and subcontractors are not on this list.
  – The grantee must check the contractor and all subcontractors’ names against the HUD Limited Denial of Participation List (available at https://www5.hud.gov/Ecpcis/main/ECPCIS_List/main/ECPCIS_List.jsp). The grantee will document that the contractor and subcontractors are not on this list.
  – The grantee must check the contractor and all subcontractors’ names against the New Hampshire Debarred Parties List (available at https://das.nh.gov/purchasing/Docs/Info/Debarred-Parties-List.pdf). The grantee will document that the contractor and subcontractors are not on this list.
  – Documentation must be submitted in GMS prior to submission of construction claims.
• The bidder may also be determined non-responsible if, in the grantee’s judgment and the judgment of the consulting professional, the bid is so unreasonably low that the project cannot be constructed for the amount bid. This is often a problem with inexperienced contractors. The grantee should always contact its attorney and its CDFA Program Manager if the grantee must award to other than the low bidder.

Step 12: Execute the Contract
Once the bidder is accepted and the reasonability of cost is established, the grantee may execute the contract (provided they have received Release of Funds from CDFA) and schedule the mandatory Preconstruction Conference.

Following award of the contract, the contract documents and applicable bonding and insurance must be completed and executed. Contract documents include all the items contained in the bid package as well as the executed contract, bid proposal, contractor certifications, and bond and insurance forms. See Chapter 4: Grantee Requirements.