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Office of Construction / Programs & Services / Alternative Contracting
Cost plus time bidding involves time, with an associated cost, in the low bid determination. This cost-plus-time method of bidding enables the contractor to determine a reasonable contact duration required for project completion; thus allowing the contractor to control the important element of time. In most cases, it is the contractor, who can best determine the most reasonable amount of time necessary to complete the project. This technique encourages a contractor to capitalize on a particular construction method or process which would speed construction.
a) The cost or “A” component is “the traditional bid” for the contract items and is the dollar amount of all work to be performed under the contract. The A+B bidding concept is designed to shorten the total contract time by allowing each Contractor to bid the number of days in which the work can be accomplished. The A portion of the bid consists of the total of all quantities multiplied by the associated unit price quoted by each contractor.
b) The time or “B” component is a “bid” of the total number of calendar days required to complete the project, as estimated by the bidder. This portion consists of a pre-established dollar value for each contract day multiplied by the number of contract days quoted by each contractor. The number of contract days is provided by the contractor as part of the bid.
Contracts are awarded based on the combination of the bid for the contract pay items (that is the “A” portion of the bid) and the associated cost of the time needed to complete the work (the “B” portion of the bid).
In the A+B bidding method, a dollar value for each contract day is established by FDOT prior to the project being advertised. The Contractor will receive an incentive for each day the work is completed ahead of his original contract time bid. If the Contractor completes the project late, a disincentive will be assessed as well as appropriate liquidated damages are applied as per the contract. For the purpose of the disincentive, the contract time will be adjusted for weather, unforeseen conditions, and extra work as approved. The number of days bid is multiplied by the daily road user cost established by Department to determine the value of the contractor’s time bid. Formula: A + B = Total Bid where A = Standard Bid (Cost) and B = Time Bid (days x road-user costs per day). The price portion of the bid does not become the only consideration in the award. The project is awarded to the contractor with the lowest sum of A + B.
To further reduce the time bid by the contractor, an incentive/disincentive clause, with the amount being equal to the daily time bid amount. The contractor will receive an incentive for each day that work is completed ahead of the contractor’s original contract time bid. Conversely, if the contractor completes the project late, the disincentive will be assessed as well as liquidated damages as per the contract. For purposes of the disincentive, the contract time is adjusted for weather, unforeseen conditions, and extra work.
The Daily Report of Construction (Form No. 700-010-13) as well as the Engineer Weekly Summary (Form No. 700-010-14) will serve as the support documentation for appropriate payment. Each will show the following statements: 1) “Today is the first day or the beginning milestone day of the A+B bidding phase of this contract”; 2) “Today is the last day of the A + B bidding phase of this contract.” (Same information required on a site-manager project)
Florida Department of Transportation
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