A + B: The contractor bids both the standard pay items plus the time required to complete the project. This total bid is then used to determine the lowest bidder for award purposes.
A + B Bidding: An adjustment to the price proposal to reflect the worth of time ("B").The contractor bids both the standard pay items plus the time required to complete the project. This total bid is then used to determine the lowest bidder for award purposes.
Adjusted Bid: Price proposals are opened after the technical proposals are scored. When the price proposal is opened, the project price is adjusted in some manner by the technical score, typically through the division of price by a technical score between 0 -1. The adjusted bid is used only for project award. The offered will be paid according to the price stated in the price proposal. The offeror with the lowest adjusted bid will be awarded the project.
Adjusted Score: Price proposals are opened after the technical proposals are scored. The adjusted score is calculated by multiplying the technical score by the total estimated project price and then divided by the price proposal. The award made is to the offeror with the highest adjusted score.
Allowable Contract Time: (adjusted contract time) Original contract time plus any contract time granted for weather, extra work, and unforeseen conditions.
Alternative or Innovative Contracting: Various methods of contracting authorized by state statute that departs to some degree from the traditional design-bid-build low-bid process. These methods include but are not limited to Time-Plus-Money (A + B), Design/Build, Warranty, and Incentive/Disincentive.
Bid Averaging Method (BAM): The contractor with a bid closest to the average of all the bids is awarded the contract.
Best Value: The overall maximum value of the proposal to a sponsor after considering all of the evaluation factors described in the specifications for the project including but not limited to the time needed for performance of the contract, innovative design approaches, the scope and quality of the work, work management, aesthetics, project control, and total project cost of the formulas or other criteria for establishing the parameters for the Best Value are generally clearly defined with the goal of being objective.
Bid Proposal: A technical proposal and a separately sealed price proposal submitted by each Design-Build Firm.
Bonus: A monetary incentive placed on a specific milestone within a contract for the expressed purpose of completing that element within the prescribed time.
Building Project: A project that provides rest areas, weigh-in-motion facilities, maintenance depots, toll highway service plazas, welcome centers, and other buildings incidental to the highway system.
Change Order: A written order to the contractor detailing changes to the specified work quantities or modifications in the scope of the original contract.
Claim: A continued demand for payment by the contractor that has been previously denied under the contracting agency's change approval procedures.
Cost-Technical Tradeoff: This approach involves calculating the technical score and the price score increment and then examining the difference between the incremental advantages of each. The increment in the technical score is calculated by dividing the highest technical score by the next highest technical score less one multiplied by 100%. The increment in price score is calculated by dividing the highest price score by the next highest price score less one multiplied by 100%. The award is to the offeror with the lowest price, unless the higher priced offers can be justified through a higher technical value. This justification is made by determining if the added increment of price is offset by an added increment in technical score.
An alternative qualitative version of this approach is used by many federal agencies under the Federal Acquisitions Regulation. This version relies on the judgment of the selection official and not on the evaluation ratings and scores. The final decision consists of an evaluation, comparative analysis, and tradeoff process that often require subjectivity and judgment on the part of the selecting official.
Design-Bid-Build: The traditional method for building highways and making highway improvements where the state transportation department (STA) or a consulting engineer working for the STA designs the project, solicits bids, and awards the construction contract to the lowest responsive bidder (construction contractor) to build the project.
Design-Build: The process of entering into a single contract with a contractor in which the contractor agrees to design and build a highway, structure or facility, or any other items required in an RFP.
Design-Build Contractor (or Design-Build Firm): An individual, company, firm, partnership, corporation, association, joint venture or other legal entity that is permitted by law to provide the necessary design and construction services, including engineering, architecture, construction contracting, and contract administration. The entity may include a construction contractor as the primary party with a design professional as the secondary party or vice versa. The contractor or design professional cannot team with other partners to submit more than one bid per project. Likewise, the secondary part of the design-build team, either designer or contractor, cannot change after award. Design-Build Contractor means the same as Design-Builder.
Design-Build Package (also Design and Construction Criteria Package): Document published by the STA that contains the Public Advertisement (Notice to Bidders), the Request for Proposals, General Requirements, Design Scope of Work, Technical Specifications, Price Proposal Documents including the Bid Schedule, and any forms, drawings and other supporting documents necessary to guide the proposers in preparation and submittal of a proposal for a design-build project.
Disincentive: Monies subtracted from the contractor for completing the project later than time allowed for in the contract, or other performance-related penalty.
Fixed Price - Best Design: This approach uses a maximum price or a fixed price for the project. Offerors must submit a price proposal that is equal or less than the specified bid price. The award is based only on the technical proposal evaluation. The offeror selected will be the one whose technical score is the highest.
Incentive: Monies paid to the contractor for early completion of a project as provided for in the contract. Incentives may be paid for on A + B, Bonus, Incentive/Disincentive, Liquidated Savings, and Escalating Incentive/Disincentive contracts.
Incentive/Disincentive: Various methods of contracting authorized by state statutes which apply an incentive for early completion or a disincentive for late completion by the contractor. These methods include but are not limited to Incentive/Disincentive and Escalating Incentive/Disincentive arrangements.
Lane Rental: Method to reduce the impact to the traveling public by charging the contractor for blocking a lane during construction.
Letters of Interest (LOI): Refers to the process that establishes criteria for evaluating interested design-build contractors for the short-listing process. Criteria required for letters of interest is stated in the advertisement. In some states, firms desiring to submit bid proposals on design-build projects must submit a letter of interest setting forth the qualifications of the members of the firm and providing any other information required by the project announcement.
Liquidated Savings: The contractor is able to receive an incentive payment for early completion of a project. This incentive is tied to the amount of savings to the STA for this early completion.
Low Bid - Meets Technical Criteria: Final award decision is based on price. Technical proposals are scored before any cost proposals are reviewed. The price proposal is opened only if technical proposal is above the minimum technical score. If it is below the technical score, the proposal is deemed non-responsive and the price proposal is not considered. Award will be determined by the lowest prices, fully qualified offeror.
Lump Sum: The contractor is required to perform a take off on the contract plans in order to develop project quantities. The contractor then submits lump sum bid for the entire contract.
Non-Responsive: Refers to any letter of interest that does not meet the criteria identified in the short-listing process or any proposal that does not comply with the criteria defined in the Request for Proposal.
Price Proposal: Contains the proposer's price for performing the work contained in the technical proposal and specified in the design-build package. In general, the price proposal is sealed and completed only on forms included in the design-build package. The proposer for an A + B type of price proposal also quotes a specified project time.
Project: The project to be designed and constructed as described in the public announcement.
Project Manager: The STA's designee responsible for administering the design-build project.
Proposer: A design-build firm or joint venture submitting a technical proposal for a design-build project.
Request for Proposal (RFP): The package to be provided to the firms qualified to bid on a project. It may contain, but is not limited to a detailed scope of work, including design concepts, technical requirements and specifications, time allowed for design and construction, STA's estimated cost of the project, deadline for submitting a proposal, selection criteria and a copy of the contracts. FHWA approval of the RFP is required on FHWA oversight projects prior to authorization and the release of the RFP to short-listed Firms. The RFP must clearly define all functions and responsibilities required by the firm. This RFP should consist of the following:
Dates: Technical proposal due date; STA's selection schedule; delivery of services/products date; STA's submittal reviews (if required) time period; and payout schedule.
Design and Construction Criteria: The design and construction requirements clearly define the specifications essential to ensure that the project is designed and constructed to meet the needs determined by the STA.
Guidelines for preparation/presentation of technical proposals and the following:
Proposal evaluation criteria
Price proposal requirements
Identification of the design-build firm's project manager
Insurance requirements
Subcontract services
Minority/disadvantaged business participation requirements
Bonding requirements
Request for Qualifications (RFQ): A frequent part of the design-build selection process that contains the desired minimum qualifications of the firm, a scope of work statement, project requirements, amount of stipend or reimbursement (if any) that the STA has determined will be paid to prospective firms who qualify for the short list, but are not awarded a contract, selection criteria that STA will use in compiling the short list of prospective Firms to consider, and a copy of the contract.
Responsive: A proposal that substantially complies with the criteria identified in the short-listing process or a proposal that contains all the information and level of detail requested in the RFP and complies with the design and construction criteria defined in the RFP or design-build package.
Road User Cost: Cost/value established by the STA related to the estimated delay costs/impacts caused by construction.
Scope of Work: Information provided or furnishes in the design-build package and RFP that describes the project work and provides the firm with the essential requirements.
Standard Bid: The traditional cost associated with the materials and labor to construct the project.
STA: State transportation agency.
Statement of Qualifications (SOQ): Refers to the process that establishes criteria for evaluating interested Firms. Criteria required for the SOQ is stated in the advertisement. Often, firms desiring to submit bid proposals on design-build projects must submit an SOQ setting forth the qualifications of members of the firm and providing any other information required by the announcement of the project.
Stipend: The fee paid to unsuccessful firms for development of a responsive proposal.
Technical Proposal: The design-builder's response to the Request for Proposals. This document contains detailed descriptions and methodology of the design-builder's approach to designing, constructing, and managing the project in accordance with the design-build package. The design-builder's conceptual design is included as well as a proposed construction sequence and schedule. Technical proposals are expected to be in-depth, and could contain tables, charts, drawings, plots, and sketches.
Time Bid ('B' Portion): This is the cost directly related to the time bid by the contractor and dollars per day established by the STA.
Time-Plus-Money: Various methods of contracting including but not limited to Lane Rental, A + B Bidding, and Liquidated Savings. These methods consider both the construction costs and time of project. Reduction of contract time is a critical consideration for these methods.
Total Bid: The standard bid cost and the time bid cost added together for determining the low bidder.
Warranties: An insurance policy to warranty a specific element or elements within the contract from premature failure.
Weighted Criteria: The technical proposal and the price proposal are evaluated individually. A weight is assigned to the price and each of the technical evaluation factors. The sum of these values becomes the total score. The offeror with the highest total score is selected.
