Recently, I was on a webinar hosted by the American Institute of Architects. The discussion topic was about how to improve relationships between Architects and Contractors.
I expected a lively discussion about scope of work and maybe some dialogue about design-build versus design-bid-build.
The panelists included an Architect, a Developer, and a General Contractor. The wide range of perspectives was interesting and I expected a good discussion, but I never expected the candor I experienced.
Requests for Information
During the conversation someone asked if the panelists had any best practices for addressing Requests for Information (RFI).
RFI’s are formal questions typically directed at the Architect. These questions are used to confirm the Contractor’s interpretation of the Architect’s drawings. In some cases RFI’s are used to call out missing or improperly defined scope items.
A Form of Intellectual Property
The discussion continued as I expected with a polite explanation about how important it was to provide clear responses. Then, the panelist with the General Contracting background stated that he holds back from asking questions during the bid because he felt his interpretation of the drawings was a form of intellectual property. He said he felt it gave him a competitive advantage over other bidders.
He went further, admitting that not only did he hold back from asking clarifying questions, he also held back from informing the Owner of any scope gaps until after the contract was awarded. He further stated that he immediately proceeded to submit for change orders to address these gaps after mobilization.
I would not say this revelation was a huge surprise, but the candor was very surprising and I must say this was the most controversial comment I ever heard anyone share in a panel discussion.
While some may find it shocking to hear that such duplicity exists, this behavior is common.
I have been involved in many bids where little or no RFI questions were received. Back in the days when I was the Architect, I took this to mean that my design was well-documented and that I had done a good job. Over the years, I have come to realize how wrong I was.
This gamesmanship is particularly obvious when you see several bidders actively asking questions while one bidder remains suspiciously silent.
Above all else, I share this experience so you can be wary that such tactics are common. However, we should not simply throw our hands up and assume there is nothing we can do.
The way I combat such behavior is simply to call it out. During the pre-bid walk-through, I will specifically tell the bidders that our evaluation will factor in active participation and that the Contractor that demonstrates the highest degree of engagement will be looked upon more favorably.
In fact, I actually include a score for bidder participation which is factored in to my decision making criteria.
I also inform the bidders that ambiguity or a high number of assumptions, exclusions, or allowances will be viewed negatively.
Once again, scoring the impact of assumptions, exclusions, and allowances is a basic part of my scoring criteria.
No Silver Bullet
As with all things in construction, there is no single solution to guard against predatory behaviors.
By being aware and letting the suppliers know that you are looking for such behaviors, Contractors are more likely to put their best foot forward and deal with you fairly.
You should still take precautions such as investing time in creating a well-defined scope, soliciting change order rates, and crafting contract language that protects you from ambiguity.
When all else fails, Be leery of the low bid from the guy who asked little to no questions. Chances are that is the Company to avoid.
What about you? How do you guard against Contractors who actively seek change orders? Do you automatically disqualify inactive low bids? Tell me your stories.
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