Request for Proposal (RFP)

ECHO Journal: Ask the Expert January 27, 2012

“What is a “request for proposal”? The association I belong to needs to have some roofing and siding work done, and I’ve been told that the best way to get contractors to bid the job is to provide them with a proposal request. What type of information needs to be in the document?

A “request for proposal” (commonly referred to as RFP) is a document drafted by a building owner or association that formally requests bid solicitation for material, services, construction, or repair of a building, system, or component. Commonly used when soliciting bids on larger projects, RFPs are increasingly being used by associations on smaller jobs as a tool to clarify and detail the work being desired. An RFP usually contains specific information about the services being requested, and the information necessary for a bid proposal to be considered by the association. Along with a scope of work, a RFP can ensure that contractors bidding on the job are bidding to perform the work in the same manner with the same material.

Repairs to buildings and components of a Common Interest Development are often very specific and must be done on a periodic basis with minimal impact on the residents. Although repairs to a complex may be major (siding or roof replacement) or minor (replacing light fixtures, signage), specifying the needs of the association with how the work is done and what is expected of the contractor will always lead to a better overall project.

Associations are charged with the responsibility to maintain and repair the complex and ensure that the repairs to a complex are performed by qualified contractors and properly done in an efficient manner. Creating an RFP can be a valuable tool when requesting any repairs or reconstruction. A RFP can be a simple one page document or it can be more detailed depending upon the size of the work being requested and the needs of the association. It can be drafted by the association, a construction consultant, or a project manager.

As a basic template, a RFP should have two main parts. The first part would contain a summary of the work to be performed, the general expectations of the association during the course of the project, an estimated time frame for the work to be done, a scope of work listing methods of installation and materials to be used, and any special requirements the association may have with regards to access to the units, where material may be stored, and parking of company vehicles.

The second part of the RFP should detail the submission requirements for contractors presenting proposals. Determine what information you will need from each bidding contractor to ensure that the firm is qualified and capable to do the work. Ask the contractor to describe how the work will be performed and how the contractor will address any special issues associated with the job. This section should also require contractors to state they are properly licensed and equipped to perform the work, the contact information of the company and foreman on the job, certificates of insurance for general liability, professional liability, and workers compensation.

The RFP should clearly state the date proposals are to be submitted, and the date a decision will be made to award the contract. Be sure to request a list of at least three previous jobs that closely reflect the work being anticipated Prior to selecting a bid proposal, someone from the association must inspect the properties listed as a reference to determine if the quality of the work performed meets with their satisfaction.
Sending out an RFP will inevitably trigger phone calls and questions from bidding contractors and requests for site visits to review the project. Associations should appoint one individual to handle all of the information requests and site visits to ensure each contractor sees and receives the same information. This person could be a committee member, a construction consultant, or project manager, and should be familiar with the project and the association’s needs.

It is important to remember that bidding a job takes time and manpower that a contractor normally does not charge for. Reputable contractors will not bid jobs that are poorly defined, and they are hesitant to work with associations that do not appear to be organized, do not have a single point of contact, or cannot make timely decisions. Even in these tough economic times, good contractors will be selective in who they will work for, and under what conditions. If a request for bids is not clearly stated, it will be harder for an association to determine if the bidding contractors are truly qualified and whether they are actually bidding on the same work

As a final note, when you do ask contractors to submit proposals for work, it is professional courtesy to notify each of the firms submitting proposals the outcome of the bid review. Whether a contractor is awarded a proposal or not, they have invested a lot of time in preparing the bid and they deserve to be told what the board decided. A proper notice should include the statement that the association has chosen not to accept the contractor’s proposal, and that they appreciated the time and effort the contractor spent in preparing their bid. This can be done via a letter, an email, or a simple phone call.

John R Schneider is a licensed General Building Contractor, and certified Code Specialist. Since 1985, he has been president of All About Homes, Inc., an East Bay consulting company that specializes in the investigation of construction related deficiencies, the management of projects, and the facilitation of disputes between owners, associations, and vendors. Mr. Schneider is a member of the ECHO Maintenance Panel. Questions or comments can be directed to Mr. Schneider at jrschneider@allabouthomes.com.

Understanding Construction Terms

Scope of Work:  Every job or task has a number of processes through which it must go to reach completion.  A scope of work defines each step necessary to complete the job in a safe, compliant, and successful manner.  A scope of work is usually created in conjunction with plans and specifications..  It is the baseline document along with the terms of the contract that establishes the parameters of a job and how the work is to be performed.  A thorough scope of work will result in competitive and comparative bid proposals.

Contractor and Sub-Contractor Procurement/Bidding:  When a project is designed and a scope of work is defined, costs to perform the work must be obtained.  This is referred to a “putting a job out to bid”, and is usually done through a formal Request for Proposal (RFP).   The RFP would outline and define the general nature of the work to be performed, the license and insurance requirements of the bidding contractors, and include the scope of work.  Without an RFP and a detailed scope of work, contractors bidding a job will not necessarily be qualified and will not be bidding on the same items or amount of work.  This is the main reason bid proposals result widely varying costs.

Project Scheduling:  Once a scope of work has been established,  a schedule must be created to reflect the time it takes to complete each task to complete the project, and how each task will integrate into the flow of the job.  The project scheduling is usually devised by the contractor awarded the contract.  It will detail the start of the job, each phase of work, material delivery, inspections, and a date for completion.

Phased Construction Inspections:  Once work is started, it is advisable to have someone, preferably a third party, perform inspections at the different phases of construction to verify that work is being performed according the plans and specifications.  This becomes more important when various trades are involved, and can be valuable when determining whether a progress payment should be made.

Phased Contractor Payments:  One of the most important tenets of construction is to only pay for materials or services delivered.  Often times, contractors receive more payments than services delivered and this is when problems occur.   A payment schedule should be prepared that clearly defines when a contractor should receive a payment, and how much the payment will be.  Payments should be associated with “phases’ of the project.  For example, on a small addition, payments could be scheduled once demolition and site preparation have been completed, once the foundation is poured, once the addition has been framed, and once it has been finished.  It is always wise to withhold 10% from the final payment until a final walkthrough of the project is performed to verify it’s completion.

Permit and City Management:  Almost all work performed in the demolition, construction, or modification of a structure requires permits and approvals from the local municipality.  This requirement can be found in the state building code and local ordinances.  The reasoning is simple; there must be a means to ensure work is performed in a safe and workmanlike manner.  All licensed contractors are required to obtain permits and approvals for work requiring permits.  There are few exceptions to the need to get permits, with painting and cosmetic work being excepted.  Always consult with the local building department to verify if permits are needed when performing any type of repairs or construction.

Owner Punch List:  Owners are best served by inspecting each aspect of work, or by hiring an independent construction specialist to evaluate that the work has been done according to the plans and specifications, and in a workmanlike manner.  This should be done at each phase of work and prior to making a progress or final payment.  It’s common to find items which need to be addressed, and these items are compiled into a (punch) list.  This list is then given to the builder/contractor to fix.  Once the punch list is completed, and verified, final payment can be made.

 Final Payment Inspections:  The final payment represents not only the completion of the job and the work performed, it represents the owner’s acceptance of the work.  Once final payment is made, it can be difficult to get the contractor back to complete unfinished items or work not reflecting acceptable standards of workmanship.  At least 10% of the final payment should be withheld until it can ascertained the work is truly complete.   It is always advisable to have an independent construction professional or the designer/engineer associated with the project review the work and verify it complies with the plans, specifications, and contractual requirements.

Rebuilding Decks Q&A

QUESTION

“The house we just bought has an old, partially rotted wood deck at the rear yard that we want to remove and replace with a new one. Although the deck is redwood, it is only 12 years old, and many of the deck boards are twisted and bowed. Are there any other materials that we can use instead of redwood? Someone suggested that we use pressure treated lumber or go with a hardwood like mahogany. Any suggestions?” – B. L., Richmond

ANSWER

Redwood is by far the most common decking material on the west coast because of its natural decay resistance, beauty and affordability. However, if it is not properly installed and maintained, it will deteriorate. Your letter did not go into detail about the installation of the deck, but if many of the deck boards are twisted and bowed, it was probably not installed or fastened correctly.

To answer your question about other types of materials for decks, there are actually several options for the home owner and contractor. Besides pressure treated lumber and select hardwoods, there is also plastic, vinyl and wood-plastic composites.

Pressure treated lumber is most commonly used for deck supports, girders and joists. The advantage of this material is its excellent ability to resist rot; it is even designed to have direct contact with the earth. One of the disadvantages of this wood is that it tends to crack and split, leaving splinters and a rough surface. Sometimes these boards also tend to twist and bow, which can affect the aesthetics of the deck surface. Painting and staining can prevent some of the cracking and splitting, but it must be done on a routine basis to keep the deck looking good.

Besides using pressure treated wood or redwood, you could also consider the use of tropical hardwoods. Tropical hardwoods (commonly a type of mahogany or teak) have rich colors, are naturally decay resistive, and have a high density. They are also more expensive than either redwood or pressure treated wood, and require more care and skill in the installation. For example, if nailing the boards by hand, they usually have to be predrilled. These decks also require more maintenance than other decks because the surface of the boards must be coated regularly with a water repellant to prevent the boards from splitting and turning grey.

A new alternative to wood decking is synthetic decking, decking material made from recycled plastics and wood fibers. These materials look and feel like real wood, and are a little more expensive than redwood. However, they have several advantages. These boards are impervious to moisture and will not split, crack, warp or rot. They can be worked with standard tools, and do not require staining or sealing

One of the best known manufacturers of wood-plastic composite is Trex, with their “Easy Care Decking”. This material is slip resistant and splinter free and can be nailed or screwed down. It comes with a limited ten year warranty. For more information call 1-800-289-8739.

Another type of composite material called TimberTech, a material manufactured by A Crane Plastics Company (1-800-307-7780). This material is produced in hollow tongue-and-groove extrusions that are dimensionally stable, lightweight, and fit together by hand. Because of its design, most fasteners are hidden. The material comes in a light brown color, which fades to a light grey over time.

Finally, there are several all vinyl and aluminum decking systems that are designed to interlock or snap together. These products have an integral and sometimes concealed fastening system. This can speed installation and make it easier for the do-it-yourself market. Basically, a type of track or base is screwed or fastened to the framing members of the deck, and the vinyl or aluminum material is snapped or slid into place. These materials should basically last forever, and require less maintenance than a wood deck.

There are two things to remember when choosing these alternative decking materials, cost and availability. Most of the composite and vinyl products are made back East and are not widely available on the West Coast. You should contact your local lumber supplier and see if they carry any of these materials or if they can order them. The majority of these materials are sold as “systems” with their own fasteners, clips and end caps. You should make sure that you have all material on hand before you begin to lay out or build your deck.

Remodeling a Kitchen or Bathroom Q&A

QUESTION

“We plan on moving in about six months and want to fix up our house for sale. My husband wants to re-do the kitchen and the bathroom and wants to do the work himself. Does he need to get permits? My brother who works for a contractor will be helping him.” – E. Anderson

ANSWER

Remodeling a kitchen or bathroom usually does require a permit particularly if you change any of the plumbing or electrical, or make a structural modification. However, your question raises two concerns that I think you might not be aware of.

The first concern is that when you sell your house you are required to provide extensive disclosure information regarding any modifications to the property. There are two specific questions on the Seller’s Transfer Disclosure Form that ask whether modifications done to the house have been done with a permit, and whether the work was done to code. Both of these questions have to be answered truthfully and you must sign this document to verify it’s accuracy.

If un-permitted, or non code complying work was done to the property, and not disclosed, the seller may be liable for damages. So from this point of view, I would encourage everyone to obtain a permit whenever it is necessary, and to do the work in a code complying manner.

The second concern is that there is a little known law in California’s Business and Professions Code that states that a home owner cannot obtain a permit for work done to prepare a house for sale. This can include any work that is done within the twelve months prior to the sale.

I spoke with Steve Pierce, a broker associate at Contemp. Realty in Fremont, and a licensed California attorney. He said, “Sellers can perform some repairs themselves, but if a permit is required, only a licensed contractor can do the work”. The reason for this is to provide protection for the buyer.

Under the Contractor’s License Law, municipalities that require permits for the construction, alteration or repair of a building, must also require that the permit be only given to licensed contractors. There is however, an exception to this. Home owners can obtain a permit if they perform the work themselves or with their employees, and do not intend to sell the house within 12 months. When home owners do apply for a permit, they must sign a statement stating that this is so.

There is an important reason for restricting sellers from doing their own work. Contractors, by law, have to obtain permits for basically any work that they do. When contractors do perform work, they have to guarantee it for at least one year. These rules do not apply to home owners. So if a home owner does some work on his house and then sells it within a year, the buyer has no specific recourse if the work turns out to be faulty.

This was a real problem in the late 1970’s when the real estate market was booming. Investors were buying up houses, fixing them up and then selling them. Often there was little regard to doing the work in a safe and code complying manner. All they had to do was to make the house look good enough to re-sell. This left many buyers stuck with problems that they then had to correct. In turn, this led to an increase in litigation between buyers and sellers.

Today, most homes that are for sale, have inspections that are ordered by the buyer. Home inspectors routinely find problems with unpermitted work that has been done on homes. And because these problems were not previously disclosed, the buyer is often in a position to legally have the seller make the necessary corrections.

This puts the seller at a tremendous disadvantage. Once in contract, the seller usually does not have the options of correcting the condition that he or she would have had otherwise. Usually there is a very short time frame within which all repairs have to be preformed, and often the repairs can cost more than the original job.

I would strongly recommend that you consider using licensed contractors for the work and insist that they obtain permits for all work that is being done. Also make sure that your contractor calls for the rough and final inspections from the city to ensure that the work is done in a code complying manner. Believe me, it is easier to do this at your convenience rather than under the pressure of contractual agreements. Good luck on your job.