Commercial Steel Estimating. Kerri OlsenЧитать онлайн книгу.
project, leaving the trade professionals to identify the difference. Any item left unattended and unaddressed by the bid letter may result in the steel fabricator bearing the financial responsibility.
Understand that the bid letter may be viewed as a contractual and binding agreement set forth by the steel estimator at the time the project is quoted. The terms and conditions stated within the letter enable the fabricator to produce the best and final low number. From the time the project is awarded through the last payment from the customer, this letter (together with any cited contract documents) is the guide by which the work will be performed.
During project negotiations, the Bid Letter often provides the only clarification of the steel fabricator’s role. The letter specifies to the customer the steel fabricator’s responsibilities in performing the work.
It is best to send the bid letter and the pricing prior to bid day. The customer then has ample opportunity to review these points of qualifications, inclusions, and exclusions, ensuring a complete scope of work. Most potential customers appreciate the clarity and completeness of scope as well as the opportunity to prevent future possible ramifications.
Qualifications
This section lists and explains the specific points within the Qualifications portion of the bid letter:
1.This proposal is based on drawings (list all the drawings here that you reviewed by which you created your quote) dated (indicate latest revision date shown on the drawings) as prepared by (specifically write in the name of the architect and engineer, with the city and state they reside), together with Addendums (list addendum numbers, or indicate that there are no addendums incorporated).
List all of the drawings that were used in creating your estimate. It is very important that this list be complete, including the revision numbers and issue dates, to provide verification of the documents used to create the steel estimate.
Contract drawings issued for construction may have changes that were not noted by addendum or any other means. When a set of drawings is issued with the intent for producing shop detail drawings, it is essential that the drawing list is checked—drawing by drawing and detail by detail—to verify that the drawings are the same as what was used in creating the quote.
If you forego this opportunity to perform a diligent drawing review, it is very likely that any changes affecting the scope of work won’t be discovered until the project is in process. The window of opportunity to alert the customer of such changes and charge for that extra work will most likely be lost.
Document all changes, making certain that costs are covered with regard to any exposure to the steel fabrication. The differences in the drawings between the bid set and the construction issue set will come up eventually, and the steel estimate will be called to question. It is always that which is left undocumented or undone that will raise questions and create problems later.
2.All invoices are net 30 days with no retainage. 1.5% interest on all overdue invoices. Detailing to be billed as a separate line item. A 50% deposit is required upon receipt of order to guarantee mill rolled materials, generate and purchase engineering, and shop detail drawings.
Management makes the judgment call whether to accept or reject retention as part of the purchase order agreement. The reasoning behind retention being held on the billings is in case errors arise in the product or services being provided. If the steel fabricator is strictly a supplier, retention isn’t as necessary because the steel fabrication is usually completed and installed before the end of the billing cycle.
If a fabricated item doesn’t fit, then the “right to remedy” is executed and the steel is fixed or replaced right away. Once the fabricated steel has been delivered, and the steel fits, there is no reason to retain funds.
The 1.5% on overdue invoices is a given, a policy made by the company’s accounting department.
The detailing is billed as a separate line item on the schedule of values for the job. Billing prior to providing the fabricated steel will ensure that the steel detailer gets paid in a timely manner. The steel detailer is on a 30-day billing cycle, like all the other subcontractors or suppliers.
The deposit requirement provides cash flow for steel and other materials on the project. Requiring a deposit is a good business practice; it secures the material delivery and enables steel fabricators to better control their schedule when the material resources are secure.
Financial markets require a quick turn on cash; deposits will secure the materials before they are sold out. Material availability impacts delivery schedules. The time span of 30–60 days may occur between award of a project and the shop drawing approvals. Often, materials are not purchased until the steel shop drawings have been approved. Customers need to be made aware that deposits are necessary to the project’s success because every job has a quick turn schedule.
Most projects are quoted based on optimum project management conditions. Having ready cash flow for your suppliers is one of them. Financing costs to pay vendors, suppliers, and payroll cannot be bid into the project for you to be low bidder. The argument for deposits provides a good negotiating tool if you choose to use it. However, if this is not the case, just eliminate deposits from your list of qualifications.
3.This quotation is valid for 15 days and is based upon labor and material cost as of the date indicated on this quotation. Awards subsequent to the 15 day period may be subject to mill price increase and / or scrap surcharges at time of material ordered.
Validating the quotation is essential because the steel market is very volatile. If your customer waits too long to award a project, you may lose your low price on the steel detailing, the materials, and potentially all remaining buy out items.
Labor availability in the shop may change; you may need to allow for overtime costs once a job has been awarded to you. All of these factors change over the course of time from bid date to project award. Therefore, a validation time frame is important.
4.This quote, if accepted, will form the basis of any purchase order awarded and will be included as an attachment to said contract as pertaining to specific inclusions and exclusions.
It is very important that the bid letter tie into whatever contract or purchase order that your customer gives you. When you submit a bid on a project, it is contractually binding. Although the bid documents are the law for the project, your bid letter outlines the rules by which you will perform the work based on your pricing.
The contract specifications are usually generic in their presentation. Your work is specific to each job. Therefore, it has specific conditions by which it must be performed at the price you have submitted. For this reason, the bid letter must be included and must override any contract conditions that may conflict.
5.This quotation is based on availability of steel from the warehouse or mill at time of award.
Material availability changes all the time. The first step any estimator or project manager should take upon getting a new job is to check the steel availability. Steel mill rolling dates are undependable and materials move out of the warehouses on a daily basis. Materials need to be secured as soon as possible to insure availability for project fabrication.
Your estimate has a set budget for materials. It is very important that you maintain that budget. Unavailable materials or delayed deliveries due to the timing of mill rolling or shipments that come in from obscure locations may force you to acquire materials at a higher price, affecting both the budget and fabrication schedule.
Substitution requests can be made by petitioning the engineer for a different size material that is readily available in lieu of a size that is not. The paper-work involved in managing such a request may affect your schedule. Additional engineering costs may be incurred.
6.Detailing and fabrication in this quote is based on release for construction documents being per “AISC, Code of Standard Practice” latest edition. (Steel Fabrication is not performed by an AISC-Certified shop; all welders are WABO certified.)
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