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78 GLOSSARY A + B Bidding: âCost-plus-time bidding, more commonly referred to as the A+B method, involves time, with an associated cost, in the low bid determination. Under the A+B method, each bid submitted consists of two compo- nents: (1) the âAâ component is the traditional bid for the contract items and is the dollar amount for all work to be performed under the contract; and (2) the âBâ component is a âbidâ of the total number of calendar days required to complete the project, as estimated by the bidder. Calendar days are used to avoid any potential for controversy that may arise if work days are used. The bid for award con- sideration is based on a combination of the bid for the contract items and the associated cost of the time, accord- ing to the formula: Bid Award Cost = A + (Bâ Road User Cost/Day)â (Primer on Contracting for the Twenty-first Century 2006). Advertise: âTo make a public announcement to purchase goods or services with the intention of increasing the response and enlarging the competition. The announce- ment must conform to the legal requirements imposed by established laws, rules, policies and procedures to inform the publicâ (Shields 1998). Alliancing: A project deliver method where the owner, designer, and contractor form a legal consortium (also called a relational contract). Similar to a public/private partnership. Alternative technical concepts (ATCs): A procedure where the designers and/or contractors are asked to furnish alternative design solutions for features of work desig- nated by the agency in its DB Request for Proposals (RFP) (Carpenter 2010). Award protest: A dispute to a selection of a consultant or contractor by an interested party. Best value: âA method of awarding a contract based on price and other factors, such as technical excellence, manage- ment capability, past performance, and personnel qualifi- cationsâ (Anderson and Russell 2001). Bid protest: The process by which an unsuccessful bidder may seek remedy for unjust contract awards (Schofield Construction Law 2012). Case study: An in-depth investigation within the research subject through interviews with key actors and literature reviews (Fellows and Liu 2008). Catastrophic failure: The sudden and complete failure of a major element or segment of the highway system that causes a disastrous impact on transportation services (FHWA 2012). Construction-manager-at-risk (CMR): âA project delivery method where the contractor is selected during design and furnishes preconstruction servicesâ (DBIA 2009). In CMR there is no requirement for the general contractor to self-perform any of the construction (McMinimee 2010). Construction manager/general contractor (CMGC): âA proj- ect delivery method where the contractor is selected dur- ing design and furnishes preconstruction services (DBIA 2009). In CMGC there is a minimum requirement for the general contractor to self-performance (McMinimee 2010). Contract: A mutually binding legal relationship obligating, the contractor for its services or supplies and the owner to pay for them (FHWA 2010). Contract modification: Any written change in the terms of a contract. Also referred to as a modification (FAR 43.101). Contractorâs general conditions: A set of guidelines that define many of the rights, responsibilities, and limitations of authority of the owner and contractor, and include the general procedures governing the performance of the work (Schofield Construction Law 2012). Conventional contracting procedures: An agencyâs standard procedure for advertising and awarding a design or con- struction contract. Cost growth: The change in contract amount in the period between award and final payment. Cost plus: A contract payment provisions where the contrac- tor is paid its actual costs plus an amount for its profit. There are a number of ways to determine that amount including a percentage of costs, a fixed fee, etc. (Schofield Construction Law 2012). Cost-plus-time: See A+B bidding. Design sequencing: A method variation of DBB contracting that allows an agency to award a contract when the design is partially complete, usually at least 30 percent (Caltrans 2006). Design-bid-build (DBB): âThe âtraditionalâ project delivery approach where the owner commissions a designer to prepare drawings and specifications under a design ser- vices contract, and separately contracts for construction, by engaging a contractor through competitive bidding or negotiationâ (DBIA 2009). Design-build (DB): âThe system of contracting under which one entity performs both architecture/engineering and construction under a single contract with the ownerâ (DBIA 2009).
79 Disaster: âAny natural catastrophe, including any: hurri- cane, tornado, storm, high water, wind-driven water, tidal wave, tsunami, earthquake, volcanic eruption, land- slide, mudslide, snowstorm, or drought or, regardless of cause, any fire, floodâ (FEMA 2012). Early contractor involvement (ECI): A project delivery method that involves bringing the constructor into the planning and permitting process. The contractor is typi- cally selected much earlier than in CMGC or CMR (Gransberg and Shane 2010). Emergency management plan: A comprehensive plan of action for emergency situations. Emergency project: A project initiated due to some unex- pected circumstance that affected the capacity/level of service of a given transportation facility (road, bridge, tunnel, etc.) to the point where the agency believes it to be great enough as to warrant special treatment in the pro- curement phase. Emergency: âA threat to public health, welfare, or safety that threatens the functioning of government, the protection of property or the health or safety of peopleâ (State of Minnesota 2011). Flexible notice to proceed: A document that authorizes the contractor to mobilize and begin construction when it is suitable to do so. Force account: A payment provision that is used if the con- tractor and the owner have not agreed on a unit price or lump sum amount. Force account payments cover labor, materials, and equipment (MnDOT 2011). Full and open competition: âAll responsible sources are per- mitted to compete for a contract actionâ (FAR 6.003). Incentives/disincentives: A contract provision that compen- sates the contractor for a specified amount of money for each day work that is completed ahead of schedule and a deduction for each day that the contractor overruns the specified schedule (FHWA 2012). Indefinite delivery: âA contract that may be used to acquire supplies and/or services when the exact times and/or exact quantities of future deliveries are not known at the time of contract award. There are three types: definite quantity; requirements; and indefinite quantityâ [FAR 16.501-2(a)]. Indefinite quantity: An indefinite-delivery contract that pro- vides for an indefinite quantity, within stated limits (min- imum and maximum), of supplies or services to be furnished during a fixed period, with deliveries or perfor- mance to be scheduled by placing orders with the con- tractor [FAR 16.504(a)]. In-house support: Assistance acquired from internal organi- zational assets as opposed to outsourcing (SAIC 2003). Interim completion dates: A portion of the contract that is accomplished within a set duration or by a specified date earlier than the contract completion date. The portion requiring an interim completion may also include a pre- scribed start date (WSDOT 2012). Invitation for bids (IFB): âA solicitation for offers under sealed biddingâ (Shields 1998). Invitation to propose (ITP): A solicitation for proposals where factors other than price will be evaluated to select the winning proposal (Heitpas 2008). Lane rental: A contract payment provision where the contrac- tor must rent a lane in order to close it. This creates a mon- etary incentive for the contractor to be innovative and minimize the duration of lane closures (WSDOT 2012). Letter contract: A written preliminary contractual instru- ment that authorizes the contractor to begin immediately manufacturing supplies or performing services (FAR 16.603-1). Limited competition bidding: The owner has chosen to or is forced to use a reduced number of applicants to compete for work (Caltrans 2010). Liquidated savings: An incentive that contractors can receive for early completion. Typically, there is no cap on the maximum amount of liquidated savings a contractor can receive (MnDOT 2012). Lowest responsible bidder: The bidder with the lowest price whose past performance, reputation and financial capa- bility is deemed acceptable (State of Minnesota 2011). Lump sum: A single fixed price offered for furnishing a given scope of services or quantity of materials (USLegal 2012). Modification: See contract modification. Multiparameter bidding: A contract award method that extends the A+B bidding concept to include an additional cost parameter (C) that may include a quality or warranty parameter. The total bid value is used only to evaluate the low bidder. The contract amount is based on the bid price (A), not the total bid value (A+B+C). The âCâ component can increase or decrease the bid value. For example, if âCâ is a bid warranty period, a higher âCâ value should result in a lower bid value to reflect the added benefit to the agency (Trauner 2006). No-excuse incentives: A contract provision which compensates the contractor for a specified amount of money. The contrac- tor must meet all of the requirements specified in the con- tract, with no partial acknowledgment (FHWA 2012). Outsource: Assistance acquired from outside a given organi- zation, as opposed to in-house (SAIC 2003). Overhead: Indirect costs other than those related to general and administrative expense and selling expenses or gen-
80 eral terms often used to identify any indirect cost (State of Minnesota 2012). Permitting: The act or process of obtaining consent or per- mission from a third party stakeholder such as a resource agency or utility company. Typically refers to environ- mental or planning obligations. Pre-event logistics contract: A contract that is established before a predictable natural or man-made event that could create an emergency occurs for supply materials and/or services. Preliminary scope of work: Initial effort to quantify the magnitude of the design and construction effort needed to resolve an emergency situation. Usually includes an inventory of work and repairs and preliminary design assumptions necessary to generate quantities of work. Procurement constraints: Regulatory or statutory limita- tions or restrictions on the process of acquiring supplies or services. Procurement: The combined functions of purchasing, inven- tory control, traffic and transportation, receiving, inspec- tion, store keeping, and salvage and disposal operations (State of Minnesota 2011). âAll stages involved in the pro- cess of acquiring supplies or services, beginning with the determination of a need for supplies of services and ending with contract completion or closeoutâ (Shields 1998). Profit: âThe difference between total cost and revenueâ (Shields 1998). Project delivery method (or system): A contractual arrange- ment of the parties involved in a construction project (i.e., CMGC, CMR, DB, DBB, etc.) (Touran et al. 2009). Qualifications based selection (QBS): A procurement method where the consultant or contractor is selected on a basis of qualification alone with no price factors. Price is negoti- ated with the best qualified competitor [Touran et al. 2009; 23 USC 112(b)(2)(A) and 23 CFR 172.5(a)(1)]. Quality: â(1). The degree of excellence of a product or ser- vice; (2) the degree to which a product or service satisfies the needs of a specific customer; or (3) the degree to which a product or service conforms with a given require- mentâ (Molenaar et al. 2011). Request for bid (RFB): A solicitation in which the terms, conditions, and specifications are described and responses are not subject to negotiation (State of Minnesota 2012). Request for qualifications (RFQ): solicitation documents requiring contractors to submit specific information on qualifications, which does not include any cost or pricing information (Gransberg and Shane 2010). Sole source: A procurement method where the agency is authorized to award directly to the consultant/contractor of its choice without competition (Shields 1998). Solicitation: âThe process used to communicate procure- ment requirements and to request responses from inter- ested vendors. A solicitation may be, but is not limited to a request for bid and request for proposalâ (State of Minnesota 2011). â(1) A document sent to prospective contractors by a Government agency requesting sub- mission of an offer, quote, or information. (2) The pro- cess of issuing a document requesting submission of an offer, quote, or information and obtaining responsesâ (Shields 1998). Special interest group: A stakeholder group with particular interest or demands that influence the decisions involv- ing them. State-of-the-practice: The current practices and procedures used by federal and state agencies. Triangulation: The use of two or more research techniques together to study the topic; can be a powerful means to gain insights and results, and to assist in making infer- ences and in drawing conclusions (Fellows and Liu 2008). Typical project: A project delivered using procedures con- sidered by the respondent to be normal. Unit price: The price of a selected unit of a good or service (e.g., pound, labor hours) (State of Minnesota 2012). User costs: The cost associated with the traveling public an indirect cost. Value for money: The most economical purchase of goods and services.