During an open discussion that took place at a preconstruction meeting, a contractor shared concerns about a plan error that would ultimately require a contract modification. Discussion regarding this change eventually moved toward anticipated cost, and the contractor did not agree with the presented conditions. This disagreement ultimately led to all bids being rejected.
The candid discussion that occurred prior to award ultimately cost the contractor the project.
Candid discussions are not uncommon during preconstruction meetings, however, contract negotiation is not permitted. According to the April 30, 1985, FHWA Memorandum regarding “Deviation from Competitive Bidding”, a state agency cannot negotiate with a bidder before an award to change the bid price of a construction project.
As you are aware, during preconstruction meetings there is candid discussion between the contractor and MDOT about how the project may need to be revised, along with anticipated deviations to the contract. Depending on the level of conversation, this dialog may be construed as negotiation prior to award and is not allowed, according to the above referenced FHWA memo.
MITA promptly brought this example to the attention of MDOT leadership. It was determined that the main purpose of the preconstruction meeting is to obtain a copy of the contractor’s progress schedule for approval. Given the advancements in e-signatures and e-contracting, the question arose as to whether there is a need to conduct preconstruction meetings prior to award.
As a result, MITA urged MDOT to consider moving the formal preconstruction meeting until after formal award of the contract. This way, candid discussion can take place regarding schedule and any anticipated changes, without the fear of negotiating contractual requirements prior to award. MDOT listened to MITA’s concerns and conducted a survey of what other DOTs were requiring relative to the timing of preconstruction meetings. From this survey MDOT determined that they were the only DOT requiring a detailed and in-depth preconstruction meeting prior to award.
As a result, MDOT recently published BOHIM 2014-01 “Preconstruction Meetings.” This BOHIM modifies the timing of the preconstruction meetings to occur after award of the construction contract.
This change in timing will allow preconstruction meetings to occur closer to the actual start date of the project, which provides for several benefits, including; additional preparation time, detailed discussions at the preconstruction meeting to resolve any issues or challenges and reduced duplicate documentation as agreements, partnerships and contractor submittals are finalized closer to the preconstruction meeting.
Click here for a copy of the recently released BOHIM 2014-01 “Preconstruction Meetings.”
If you have any questions or comments contact Glenn Bukoski at glennbukoski@mi-ita.com or Doug Needham at douglasneedham@mi-ita.com or call them at the MITA office at 517-347-8336.
