Working with Contractors

Things to do Before Putting That Item or Job Out to Bid

Many people believe that all municipality purchases and contracts must go out to bid. There are only two instances when a municipality must put a purchase or contract out to bid:

1. When municipalities have local purchasing or bidding ordinances (these must be strictly followed),
2. If a public official is involved as one of the sellers or contractors (See RSA 95:1. There is not a state law requiring competitive bidding for town contracts and purchases).

If neither of these situations exists, then requests for bids is at the discretion of the municipal officials.

Requests for Bids vs. Request for Prices

When not required to request bids, municipal officials have two choices.

1. They can use a bid process, or
2. They can use a process known as a "request for prices."

The difference between a request for bids and a request for prices is a request bids includes specifications and a request prices does not.

Whether writing a bid request or a request for prices, you must consider the entire scope of the project. For example, the scope of work for resurfacing could include the shimming, sweeping, paving, traffic control, and even markings. It should be clear who will perform each task. This procedure allows all parties to know what you expect of them.

The Bid Process

Bid requests should be written clearly. Writers should specify the products they want used and the procedures they want followed. Help is available in the bid request writing process. For starters, the state of New Hampshire specification book is a valuable resource. Neighboring municipalities can often assist with bid request writing. Vendors are another source of help; consult more than one.

Write requests using unit costs. This ensures that if you need to purchase another ton of asphalt, you will know how much each unit will cost.

When notifying potential bidders, only a small ad in the newspaper is required. For maximum competition, notify all potential bidders by letter.

By law, the municipality must accept the "lowest responsible bidder" who has followed the terms of the bid. After issuing a set of specifications, the municipality cannot accept an alternative. If an alternate looks better, then you must reject all the bids. Write a new set of specifications and re-advertise the bid.

Creating a Fair Process

Whether you are using the bid process or putting out a request for prices, you should make certain the process is equitable.

1. Make many qualified contractors aware of the job. Maintain a list of qualified contractors and send your bid specifications or request to prices to all of them. The list should contain information about the quality of each contractor’s work and any past experiences with the contractor. The State of New Hampshire has a list of qualified contractors and neighboring municipalities might have a similar list.
2. Before accepting a request for prices, look at the contractor’s level of experience. How long has the contractor been in business? If they have been in business 5 years or longer, chances are they will be around to solve problems a year or so from now. Also, companies that fail do so within 2 years of starting. Check with other municipalities to see if they have any experiences with the contractors.
3. Make certain the contractor carries adequate liability coverage. A primary reason to contract work out is to avoid liability. Be sure you are protected; write liability coverage specifications into bids.
4. Will the contractor guarantee their work will last a number of years?

Working with the Contractor

Good relations are necessary for obtaining a high quality of product or service and for receiving the best prices for future bids or requests for prices. To achieve a solid relationship, the project manager and job inspectors must be consistent. Unqualified and inconsistent job inspectors can cost everyone money. They may approve a job that is not up to standards. They may cause delays at a job site or cause work to stop.

Stay on track with payment dates. Make payments for the job as stated in the contract.

Conclusion

Following these guidelines will attract qualified contractors and increase competition. The result will be better products at reasonable costs.

Over time a municipality gains a reputation among contractors. If a municipality has the reputation treating contractors fairly, then they can expect to be treated fairly in return.

Return to Summer 97.

Return to UNH T2 Center, 33 College Road, Durham NH 03824 603-862-2826 Fax 603-862-2364