Unique Construction Solicitation Provisions
Solicitation Requirements and Where Requirement Is Found
| Magnitude of the Project | FAR 36.204 |
| Statutory Cost Limitations | FAR 36.205 |
| Davis-Bacon Wage Determination | FAR 22.404 |
| Equal Employment Opportunity | FAR 22.8 |
| Buy American Act | FAR 25.2 |
| Liquidated Damages | FAR 11.5 and 36.206 |
| Completion Date | Contract Specifications |
| Site Visit | FAR 36.523 |
| Bonding | FAR 28.201 |
| Socioeconomic Programs | FAR 19.201 |
Magnitude of the Project
In accordance with FAR 36.204, all advance notices and solicitations for construction projects shall state the magnitude of the construction requirement in terms of physical characteristics and estimated price range.
The estimated price should be described in terms of a range and the FAR has eight ranges beginning with "Less Than $25,000" to "More than $10,000,000".
Statutory Cost Limitations
In accordance with FAR 36.205, construction contracts shall not be awarded in excess of statutory cost limitations or exceed statutory authorization.
Solicitations containing one or more items subject to statutory cost limitations shall state the applicable limitation in a separate schedule. The solicitation will also state that an offer that does not contain separately priced schedules will not be considered and that the price on each schedule shall contain all estimated costs.
However, if in the Government's best interest, the Contracting Officer may include a provision in the construction solicitation that permits award of separate contracts for individual items whose prices are within or subject to applicable statutory limitations.
Davis-Bacon Wage Determination
The Davis-Bacon Act provides that contracts in excess of $2,000 shall contain the FAR Clause 52.222-6 that no laborer or mechanic employed directly on the site shall receive less than the prevailing wage rates as determined by the Secretary of Labor. In accordance with FAR 22.404-2, the Contracting Officer shall ensure that only the appropriate wage determinations are incorporated into solicitations.
Wage determinations are issued for different types of construction, such as, building, heavy, and highway and residential, which apply only to the types of construction designated in the determination.
Equal Employment Opportunity
FAR Clause 52.222-23, Notice of Requirement for Affirmative Action to Ensure Equal Employment Opportunity is required in all construction solicitations that include FAR Clause 52.222-26, Equal Opportunity, and the amount of the contract is expected to be in excess of $10,000.00.
If the agency does not have the pre-established percentages on file, refer to the listing published periodically in the Federal Register, or contact the Office of Federal Contract Compliance Programs (OFCCP). By identifying the area where the construction will take place, the predetermined goals are provided therein. The clause itself provides a blank space where the percentages are to be inserted in the solicitation. The minority goal may fluctuate from one geographic area to another, whereas the 6.9% pertaining to female employees has been established on a national level and has not changed since 1982.
Buy American Act
In accordance with FAR 25.2, the Buy American Act requires that only domestic construction materials be used in construction in the United States except when,
- The cost of domestic product exceeds the cost of foreign material by more than 6%
- Head of Contracting Activity determines material is sufficient
- Application of Buy American Act would be impracticable or
- Application of Buy American Act would be inconsistent with public interest
Generally, an exception will be granted only if the cost of domestic construction materials is at least 6 percent more than the cost of the foreign construction material.
Offerors should request determinations regarding the inapplicability of the Buy American Act in time to allow determination before submission of offers and in accordance with FAR Clause 52.225-9, Buy American Act - Balance of Payments Program - Construction Materials, paragraphs (c) and (d). If an exception is granted, the solicitation should be amended to include that item.
If the contractor requests a determination after award, the contractor must explain why the determination was not submitted before award and why the need for an exception was not reasonably foreseeable in accordance with FAR Clause 52.225-9, Buy American Act - Construction Materials, paragraphs (c) and (d). If an exception is granted, the contract should be modified to allow use of the item and adequate consideration shall be negotiated.
If, in either case, the contractor does not submit a satisfactory explanation, an exception will not be granted unless it is in the Government's best interest.
In accordance with FAR 25.402 and 25.403, the Trade Agreements Act requires agencies to evaluate offers of a designated country's (approximately 60) construction materials without regard to the restrictions of the Buy-American Act.
In accordance with FAR 25.402, the North American Free Trade Agreement (NAFTA) requires agencies to evaluate offers of a NAFTA country's (Canada or Mexico) construction materials without regard to the restrictions of the Buy-American Act.
Liquidated Damages
FAR 11.5, states that if a liquidated damages clause is used in a construction contract, the rate of the damages to be assessed against the contractor should be for each day of delay. The rate, as a minimum, should cover the estimated cost of inspection and superintendence for each day of delay in completion. Whenever the Government will suffer other specific losses due to the failure of the contractor to complete the work on time, the rate should also include an amount for these items.
Rates must be reasonable, and if later found to be a penalty rather than an amount for actual damages, could be unenforceable.
FAR Clause 52.211-12, Liquidated Damages - Construction, shall be included in solicitations for construction. If different completion dates are specified in the contract for separate parts or stages of work, the Contracting Officer shall use the clause with its Alternate I. Alternate I revises the clause to specify the amount of liquidated damages for delay of each separate part or stage or the work.
Completion Date
In fixed-price construction solicitations, insert FAR Clause 52.211-10, Commencement, Prosecution and Completion of Work. With construction, the completion date is usually specified in terms of the number of days, rather than a specific calendar date and can usually be found in guide specifications. If the construction requirement includes phasing of work, the clause could be adjusted to clearly state the completion date is for all phases or individually list the completion dates for each phase.
Site Visit
FAR 36.523 states the Contracting Officer shall insert FAR Clause 52.236-27, Site Visit (Construction), in solicitations that include the clauses FAR 52.236-2, Differing Site Conditions and 52.236-3, Site Investigations and Conditions Affecting the work. Alternate I may be used when an organized site visit will be conducted.
An organized site visit or a pre-bid/proposal conference may be used, generally in more complex acquisition, as a means of briefing prospective offerors and explaining complicated specifications and requirements as early as possible after the solicitation has been issued but before the bids/proposals are received.
The clause requires the insertion of a point of contact, address and telephone number. If Alternate I is utilized, it states the time and place of the organized site visit.
Bonding
In accordance with FAR 28.101, the Contracting Officer shall not require a bid guarantee unless a performance bond or a performance and payment bond is also required.
If a bid guarantee is required, FAR Clause 52.228-1, Bid Guarantees shall be inserted in the solicitation. The Contracting Officer shall determine the amount of the bid guarantee for insertion into the provision. The amount shall be adequate to protect the Government from loss should the successful offeror fail to execute further contractual documents and bonds as required.
The bid guarantee amount shall be at least 20% of the bid price but shall not exceed $3 million.
Furthermore, IAW FAR 28.102, Performance and payment bonds and alternative payment protections for construction contracts, the Miller Act (40U.S.C. 270a-270f) requires performance and payment bonds for any construction contract exceeding $100,000, except that this requirement may be waived.
The Contracting Officer shall insert FAR Clause 52.228-15, Performance and Payment Bonds - Construction, in solicitations if the contract is expected to exceed $100,000. For contracts over $25,000 but less than $100,000 insert FAR Clause 52.228-13 Alternative Payment Protections.
Unless the Contracting Officer determines that a lesser amount would be adequate for the protection of the Government:
- The penal amount of the performance bond shall be 100 percent of the original contract price.
- If the contract price increases, and additional amount equal to 100 percent of the increase.
For contracts exceeding $100,000 the contracting officer must make a written determination supported by specific findings that a payment bond in this amount is impractical.
Socioeconomic Programs
In accordance with FAR 19.201 it is the policy of the Government to provide maximum practicable opportunities in its acquisitions to small business, veteran owned small business, service disabled veteran owned small business, HUBZone small business, small disadvantaged business, and women-owned small business concerns. Such concerns shall also have the maximum practicable opportunity to participate as subcontractors in the contracts awarded.
Small Business Competitiveness Demonstration
The Small Business Competitiveness Demonstration Program (FAR 19.10), the program consists of two major components: 1) unrestricted competition in four designated industry groups and, 2) enhanced small business participation in 10 agency targeted industry categories. The Department of the Interior is a participating agency of this Program. Under this Program, agencies shall have a small business participation goal as a percent of the agency's total contract dollars awarded in the four designated industry groups, including construction. The solicitation package will need to be inclusive of all applicable clauses.