Brad Wyant (00:00)
good morning and welcome to Management Under Construction. I'm Brad Wyant.
Dee Davis (00:04)
And I'm Dee Davis. And today we are going to talk about the benefits of a well-written RFP or request for pricing. But before we get started, today is Mother's Day. We are recording on Mother's Day. So I just want to send a big shout out to all of our listeners who are moms or even supporting moms out there. All the dads that are supporting moms, give her something special today.
Make her feel a little good, do something great. I hope you get to enjoy your Mother's Day wherever you're listening from. It's Mother's Day in America, by the way. Mexico has a whole different Mother's Day. found out a couple of years ago. They have a specific day. believe it's May 10th. That's no matter when May 10th happens, that's Mother's Day. And I bet you there's some other countries that probably have something similar. I know we do have some listeners in Mexico. So May 10th was yesterday.
So yesterday would have been Mother's Day for them. We're recording on May 11th in the U.S.
Brad Wyant (01:00)
Yes, we are, and happy Mother's Day to my mom if she's listening.
Dee Davis (01:02)
happiest of mother stays here mom. Brad's a great, great son. He's always making sure his mom's got something special. by the way, ladies, I just kind of have said this a couple of times. He's single. saying.
Brad Wyant (01:12)
You
Dee Davis (01:13)
He's gonna be a great husband someday.
Brad Wyant (01:15)
I appreciate that day. is too kind.
Dee Davis (01:17)
See, I had to give a look. Now I'm making his shirt match his face. Poor Brad. He had no idea I was going to do that.
Brad Wyant (01:23)
I am rudder than a beat. That is great. That's great. Yeah
Dee Davis (01:27)
Yeah, that was unscripted. Sorry, Brad.
Brad Wyant (01:30)
No worries. It's entertainment as much as information on the podcast today.
Dee Davis (01:33)
So what is an RFP? An RFP stands for request for pricing, not to be confused with an RFQ, which is request for qualifications. So real briefly, let's talk about the difference between those two because you'll hear both of those terms a lot in the industry. An RFP is dollar signs, right? It's scope.
plus dollar signs. it's really the first step in getting a firm budget set. this will go straight into a contract typically for a project. An RFQ is something that sometimes happens before, but not always. And what it does is it narrows down the bidding field. So let's say you had
10 potential contractors that might be suitable for this project or that you wanted to talk to about this project. You might make an RFQ, which is a request for qualifications and say, okay, here's all the qualifications that we want you to have. Things like that are like safety record, how many previous projects you've had, your staffing, that kind of stuff goes into No dollar signs really. And
That will help narrow down the 10 bidders down to maybe three to no more than five typically. So that's the difference between an RFP and an RFQ. what experience do you have with RFPs? Good, bad, or indifferent Brad?
Brad Wyant (02:54)
don't have as much as you do, Dee, but I have a little bit of experience. My deepest experience with RFQs and RFPs has been with being on the bid team during the interview phase, talking to a potential new customer about what we can offer, about my experience. And I always like that kind of opportunity, to speak on behalf of what we plan to do in terms of servicing the client. That's a great chance to set yourself apart from a bunch of
vague, similar-looking marketing information and numbers on a spreadsheet. The hardest thing I've experienced about RFPs is weeding through the different customer-specific details they require for how to work with them. But that's also the most rewarding part because I've found that whenever I'm having a conversation with an owner in that circumstance, if you demonstrate that you read what they wrote, it goes a long way.
Dee Davis (03:46)
You bring up a really good point there. There's nothing worse than sitting on the owner's side of the table and having a contractor who is presenting to you or interviewing for you, and they've clearly not read the documents. Or they respond in a way, if it's a written response, in a way that you can tell that they have not read the documents. it's the equivalent of showing up for an interview unprepared.
It shows that you just don't care that much. Maybe you're a little too busy. Maybe you're not going to give them the level of service they're the customer They want a response that's going to show them that you really want the job that you are taking the time that is necessary up front to prepare.
It's good manners and it's good business to show up prepared and show in your RFP and in your interview if there is interviews that you are ready to do that job.
my experience with RFPs has been multifaceted. I've done it from the installing contractor side. the GC side and I've done it from the owner side. I've written lots and lots of scope documents and RFPs. I've read lots of them. I've had to respond to lots of them. And. It can be tedious but it's crazy the wide range.
of information that you will get. Some of it feels like you're reading a boilerplate contract and contracts are part of it, but sometimes you're given tons of information, sometimes you're given very little information, sometimes you're given conflicting information. So it's very important to read it, to pay attention to it, and to respond accordingly. And if there's conflicts, there's usually a process to get
questions answered. Some are a little squishier and allow you to pick up a phone and call somebody. Mostly the process allows for similar to what we do in construction, which is to kind of write an RFI and say, hey, the document over here says that we can do this, but over here it says we can't. So which one is it? Because it may matter for the pricing and how you're going to do something in the project.
Method in which you respond is generally in writing. The method in which you ask questions is generally in writing. And I know as an owners rep, I've had to be very, very strict with contractors in saying you must put all your questions in writing. You must give them to me by this day. And then what we do on the owner side is we write out all the answers. We look at them all. We write out all the answers.
and everybody gets a copy of the question and the answer. So if there's five bidders, five people, if only one person asked the question, five person get the question, five people get the same answer. So that you're trying to level that playing field. And that's really what this is all about, is leveling that playing field. You should end up with five people bidding the exact same thing. That's the goal.
Brad Wyant (06:36)
I can't fathom how many times I've been told apples to apples. Everybody wants everything to be as comparable as possible. And even though it's one of those things that when you're young in your career, it's almost like annoying. Yeah, I get people are giving it to you wrote. It's such a crucial concept. There's a maybe a tendency when we're younger in our careers to think, well, if I could just have this person sharpen their pencil, they're really the right bidder But that's
not fair. can't have that work into the process if you give one person advice on what to do and don't give it to the rest of the bidders, then you're putting your thumb on the scale and you need to either find a way to, if you have a feeling about what's true, measure that out through the numbers that are there, qualitatively assess qualifications, which are very important. Even if somebody's a low bid, doesn't mean that they are a low eligible bidder.
even if you're working on federal or other state funded.
that tendency to want to your thumb on the scale to get your person, your company, the one you want awarded.
Dee Davis (07:32)
Yeah, it can be really tricky. even a whiff of impropriety can taint you, your company, your reputation, the process. And like I said, some that I've been involved in have been a little squishier and some have been more firm. I tend to take the more firm side of it just because I would never want
somebody to think that I was providing somebody else an unfair advantage. You also have to think about what you would want it if you were in the other seat, right? Would you want one of your competitors picking up the phone and getting information and exchanging information with the person in charge or the owner or the person that has the information and you're not able to do it, but then they go do it. Would you want that happening? I once had
This is terrible. I once had a contractor in the middle of a bid, the bids were in and we were in the middle of evaluating them on a it was probably a $300 million project. And they called me one day and invited me to go.
to their ski resort for the weekend. They were putting together a thing with some different people and invited me to go along. And I said, I can't do that. I can't. thank you for asking. But the timing, even if you didn't mean it that way, I don't know that there was any mal intent there, but just the timing of it.
could be interpreted as trying to influence my vote on my evaluation of their bid. And when that much money is on the line and things are that important, as a consultant, or even employee of any entity, you really can't afford to be playing those kinds of games.
Not saying that they were trying to make it like that, but it could feel like that. Somebody else looking out from the inside could look at that and go, hmm, that's interesting. And you don't want to be put in that position.
Brad Wyant (09:25)
Very, very well put. think that's definitely navigated because on the one hand, it's an invitation. It's somebody offering their kindness and their hospitality. So you have to concede that kindly, but you don't want people at that firm go in another firm or people talk. Reputation is everything. You can only live on your name.
Dee Davis (09:41)
Yeah, absolutely. And I did explain to them why I was declining. said, listen, I appreciate the offer and maybe another time, but I can't right now because, we're in the middle of this and I just wouldn't want anybody to get the wrong idea. They were like, yeah, I understand. sometimes you don't get to go have fun. it would have been a great day, I'm sure.
Okay, so let's talk about what goes into a good RFP. An RFP takes effort, folks. I'm not even gonna lie. A good RFP takes energy and effort because you're gonna have things that are typical and you're gonna have things that you need to customize for every single bid that goes out because every single job site is different, every single owner is different,
The site conditions are different from one project to the next, so you're always going to have to customize these things. So I kind of tried to put this together in different elements of a good RFP. First is a brief description of who the owner is, the project type, size, and location. So here's a quick example. Owner is XYZ Pharmaceutical, and we specialize in delivering cell therapies for patients with ABC type diseases. This project
is a 10,000 square foot expansion of an existing CGMP manufacturing facility and lab space in Raleigh, North Carolina. a quick high level, this is what we're doing here. This is going to put everybody's mind in the right place. Okay, now I know where I am. I know what kind of facility I'm in. I know roughly how many square feet we're dealing with. I know that it's an existing facility.
These are all really important elements for any contractor that's bidding. Whether the facility is new or existing is massively important. What type of facility it is is massively important to productivity levels.
Brad Wyant (11:25)
And D, how easy is it to write something that gives you a bunch of information and a very short amount of writing? And why is that important for what could be a very busy group of estimators out in the market proposing on your project?
Dee Davis (11:41)
Well, writing skills are essential here. I know that a lot of the folks listening and you and I, we have engineer brain. we're very left brain people. A lot of engineers I know can barely write a sentence or spell because they're so engineering focused. There's some of us who are a little bit better at it. I've been given the gift of being able to write, which means I'm not as good of an engineer to be honest with you.
It's hard to be really good at both things. being able to be succinct is important because we all know what attention spans are, especially these days. Nobody wants to read a hundred page document. No one wants to read that.
And the more you write and the more blah, blah you have, the more likely you're going to have a conflict somewhere in the blah, blah, blah. So you want to be succinct. I wrote this in a matter of seconds, just made it up out of thin air. when you know the information, it's even easier to write it up because you know the name of the company, you know what they're making, hopefully.
You know how many square feet it is. You know what kind of manufacturing or lab facility or whatever, I'm telling the contractor a whole bunch of critical information in two sentences.
Brad Wyant (12:50)
And I think an important note to keep in mind here is not just to write for your audience, write for that busy person, but when you go to market as an owner with a RFP, you're going to market in a competitive space. Even though you're the one who's going to write the check eventually, if a group of general contractors receive a hundred different RFPs in a week, they are going to make a choice about which one is going to be easiest to bid.
which one they understand fastest, which one they can make a case to their leadership to bid for or not. And if you make it hard for them to read, if you make it difficult for them to suss out whether this is the right choice for them or not, that's gonna be frustrating for them. They're gonna get turned off by that. They're gonna go take more effort and put more of their time into the job that they have more of clarity with.
Dee Davis (13:35)
As always, a great point, I don't know that people who have never worked for a contractor understand how many RFPs come in every year. I worked for a company at one point where estimating put together their metrics for us one year. this is a specialty contractor you look at all the bids that they do all year long,
and how many business days there are in a year. One and a half estimates per business day.
Mind blowing, absolutely mind blowing. I knew a lot of it stuff was going through there, but I had no idea that it was that much. And that's not going to be true for every company. There's companies that kind of bid everything that comes to them. And there's companies that are quite picky about what they will bid. And then there's companies that are somewhere in between because politics plays into this too. If you're an owner that
is big in the area, maybe you're one of the biggest employers in the area, maybe your projects are especially attractive for contractors, then you might be a little higher on the list because if they opt not to bid your work, somebody's going to pick up the phone and say, why aren't you bidding my work? Owners get upset when contractors decide to no bid. They do.
every owner thinks that they are the most important and that the project is the most important. And to them, it absolutely is. so contractors sometimes have to make tough decisions, like you're saying. And they're going to make those tough decisions based on lots of different factors. So you having a good, solid, clear, consistent RFP is going to be one of those factors.
The next thing you want to include
a blurb on what type of contract you intend to write. What is this? Is it going to be plan and spec, design assist, design build? Is it going to be a GMP? Is it going to be a T&M There's all kinds of different contracting choices that we have out there. What are you planning on doing for this project? Because how this is priced does matter.
And then give a sample of your contract. I have seen RFPs come across with no sample contract, and that is not good. And the reason that's not good is you do not want to wait until you have decided which contractor you think you want to go with, then give them a sample of the contract, and then have their legal start picking through it There's lots of boilerplate terms and conditions. There's all kinds of things in there.
that they need to look at there could be something in your contract that's a deal killer for them and it would actually cause them to no bid the job. It happens.
Have you had any experience with that, Brad?
Brad Wyant (16:05)
haven't had any direct experience with being in the room to decide whether to not bid or to bid, but I have been in the room for a lot of go decisions. And one thing that comes to mind for me is the simple of a Hollywood movie weekend opening. Let's say that Mission Impossible and some other spy movie open on the same weekend. If Mission Impossible is competing with that unknown
unnamed non-franchised spy movie people who want to see spy movies are going to go see Mission Impossible not the one they don't know because they want to know they're going to have a good time for their price of the ticket. So if you as a owner are putting out to bid a CGMP facility at the same time as another owner is putting out to bid a CGMP facility and your deadlines are pretty close to each other the contractors that do that kind of work.
are going have a hard time pricing both at the same time. And that may be part of the conversation that happens in that room when they have that go, no go, are we going to propose on this or not conversation? Just, just let them think about, think about the market in which you play and whether you're competing or
Dee Davis (17:10)
that actually happened a couple of years ago. We had two major CGMP facilities in the same town, that were going to bid at the exact same time. that's another conversation that happens around these tables that I'm not sure people are aware of, is now we're all going out to the same electricians, the same mechanicals, the same GCs, the same
whatever, carpenters, all the things, we all need the same services. So if you've got two major that are going out at the same time, or even the project schedules are gonna be going at the same time, are these contractors big enough to bid them both, to execute them both? I had a major electrical contractor say, I'm choosing this one, not that one. They had to pick because there's no way.
that they had so much other work going on because it's not just you and it's not just your job. There's tons of ongoing projects. They already have backlog booked. So they have to choose sometimes and sometimes you win on that choice and sometimes you lose.
Brad Wyant (18:09)
Well, speaking of winning and losing, tell me about the penalties and incentives that you might want to write into an RFP and how best to phrase those. What does that signal to your bidders when you're including penalties and incentives in your contract?
Dee Davis (18:22)
if you're not going to do any of that, you can remain silent on it. But if you're going to have a penalty or you're going to have an incentive, you need to put that in there, especially the penalty. there's going to be liquidated damages or any other kinds of penalty clauses in there.
It's incredibly important for the contractors to know that going in because again, you don't want to get all the way to the end and then then throw that on them because they could withdraw. They could just say, I'm out. If I would have known that I would have never bid the project. you don't want to wait until the last minute to do this, put it all out there in the front. let's say you're going to have a liquidated damages clause of $10,000 a day for not meeting schedule date X that could
narrow the field for you quite a bit because depending on what that date is and how reasonable that date is and how much control you're giving the contractors over their ability to meet that date. It could knock a few out of the of the pool for you. Incentives is another one. if you're even considering doing an incentive clause
even if you haven't decided, or if it's going to be negotiable, put it in there and just say, we would consider an incentive clause. I have more contractors ask about that than probably anything else. even if we're silent on it, they will come and they'll say, would you consider an incentive? And what an incentive might look like is something like for every day you finish early.
you get an extra X number of dollars. can be written a number of ways. It can also be a shared savings incentive. So if you have a specific budget that you're really trying to hit, you could say,
we have a shared bucket of money and however much you save, if we save 50 % of that, you get a percentage of it. If we save a hundred thousand dollars, we save a million dollars, you get a percentage of that as an incentive to the contractor to manage the budget very closely.
Have you participated in any projects like that with penalties or incentives?
Brad Wyant (20:30)
No, I've only ever participated in projects that have disincentives that have penalties. And those really scare the heck out of people, especially in the bidding room, because with what's going on in the global supply chain these days, with the risks inherent to construction, people really shy away from them. If I were in that owner's seat, knowing what I know now, I would definitely want to be in the position of being able to offer both an incentive and a penalty.
But that's a tough spot to be in because let's say you're Amazon and you offer an incentive and a penalty on getting a distribution center built by a certain amount of time. If all of a sudden, unexpectedly, you get that distribution center 10 days earlier than you thought you would and you were expecting to hire people on and start fitting it out with your own people and you just can't make use of that time, then all of sudden you're having to pay
that contractor for doing something that didn't end up helping you at all. So it's a tough road to walk to define when an incentive is and is not meaningful and how much to ascribe to daily incentives for completing on time. Budget may be a little bit better. I think you like you alluded to with the shared pool. There's a better route.
Incentive you can create there that doesn't depend so much on time and being able to make use of it But the time thing is usually what costs people the most money anyway
Dee Davis (21:50)
Yeah, I've probably been involved in more projects that have penalties and incentives too. And it's usually in the form of liquidated damages. And as we talked about in a previous cast, liquidated damages is very tough to enforce. it's something that unless you're very serious about it, I wouldn't even bother.
It's tough to enforce and what you're doing on the front end by putting it in there is scaring some people and automatically putting them on the defensive, which is probably not how you want to start your contracting relationship
Brad Wyant (22:21)
When you're talking about those kinds of questions, should you go to your own legal team who does all the rest of the RFPs for your company or should you go to a different lawyer to ask that kind of question about liquidated damages do you think?
Dee Davis (22:34)
Well, it very much depends on how your company's organized. I worked for general contractors and specialty contractors that we had lawyers on staff they were specialized in contracts and all that stuff so that we could run things by them and talk to them about, and they would review contracts. So during these RFP processes, they would get contracts and we would send it to them to review.
as estimating was doing their thing, they were reviewing the contract and they would mark it up and they would give us a list of things that they would recommend that we push back on or change language or whatever. So if you have those internal resources, I would absolutely use those.
I would say that if you're especially concerned you really, really want this job, but there's these liquidated damages and they're kind of scary, You might need to have an outside counsel give you some feedback and have your legal department do this, but give you some feedback on whether or not is that really very enforceable?
are the odds that something like that's actually going to be enforced? Are you going to end up in court or in arbitration? Nobody wants to end up there because as we have said over and over again, nobody wins when those things happen.
So the next essential element of a good RFP is the project schedule. here's something to think about. I am in the position of making a project schedule often on the owner's side before we go out for bids. it depends on the owner. Some owners, I write the RFP. Some owners, they have their own people that write the RFP. But usually as the owner's rep and working with the design team and all that, I'm creating the initial schedule.
So the person's skill set on creating that initial schedule is pretty important here. You do not want to back into a schedule, especially at this stage. You want to make sure that you've built yourself some fluff, you've built yourself some what-ifs, you've built yourself some reasonable time here. they're going to take a schedule an owner's rep or somebody like me has made.
And we're putting it out to the GC. This is the first time the GC is going to see this. they're going to look at your schedule and they're either going to laugh and go, ha ha ha. That's pretty funny. There's no way we're going to make that. And there's, there's two kinds of GCs. There's the kind of GC that'll laugh and smile and shake their head and just go, sure, whatever. Yeah, we'll do that. Uh-huh. And then there's the kind of GC that will come back and say, listen, Mr. Owner, you're never.
going to make this schedule. Here's a schedule that is doable, and this is the schedule that we want to propose. I personally like the GCs that come back with a reality check. Because if there's something you're not seeing, or maybe the person that made your schedule is under a lot of pressure to be overly optimistic, or is being told to back into a date, there's lots of stuff that goes on before the GCs ever get involved.
You need to tell your owners what the real date is. I think it's our obligation as contractors to do that.
Brad Wyant (25:31)
I so agree with that point. It's almost like a degrees of freedom engineering problem, which I'll try to state a different way. The degrees of freedom engineering problem is where if you constrain too many factors, physical reality doesn't allow you to succeed. In this instance, if you say you have to be under this budget and do it in this time, but you can't make that schedule without having the budget to do overtime, then you're over constraining the problem for the contractor. You don't want to put yourself
into a box where you're saying, I need the contractor to tell me what I want to hear to win the job. You want to put them into a less constrained environment where they can say, this is what's really important to me as the owner. Here's where you have to tell me what it is, what makes it possible to do that. If you over constrain the problem, you're going to get what Dee said people telling you what you want to hear and nodding their head until they prove that what you wanted was never possible.
or you're going to get people laughing you out of the business and not wanting to work with you. It's better to give people room to meet you in the middle as opposed to saying exactly what you want in every single area and then being disappointed later on when you don't get what you want.
Dee Davis (26:43)
everything in life seems to go back to the good, fast, cheap model. You can have any two, but never all three. can you have it for that budget and that schedule? Well, maybe, but you're not going to end up with a very good product. And that's, that's not what any owner wants. These capital projects, somebody's spending what is a lot of money for them, regardless the size of the project.
They're spending what is a lot of money for them and somebody on the other end of that, the reputation's on the line. So they want a good product. They also want it good and they, you they want it fast and they want it cheap. So owners, we have to remember that when we, when we tie people's hands and we tie people's feet and we ask them to run a marathon, something's going to give, and you are going to be the one who ends up losing because your project will not come in on budget. It will not come in on time.
So giving a good reasonable schedule upfront, asking those contractors to be honest with you about feedback on your schedule is important if you're sitting in the owner's seat. we want to make sure that we have a high level project schedule. It doesn't have to include all the nitty-gritty details. It includes dates like when are you planning on awarding the contract? What is the design duration? Because there's still design left at this stage. What is the?
Mobilization plan. When do you plan for them to land on the project with mobilization of, people, trailers, whatever you're doing. And by the way, trying to mobilize over the holidays, like Christmas, New Year's, I've never seen it happen. Not saying that it can't happen, but every time we put that on a schedule, it fails because nobody's doing that over the holidays.
especially if you're asking people to relocate, if it's really a big job and people are coming from everywhere to man this project, they're not going to start that over the holidays. The construction duration. Big important thing to get right is the duration of construction because this feeds directly into the GCs, the general conditions of your project. So whether that is nine months or 12 months matters. So you got to make sure you get that right.
And then what is your completion and turnover dates? And I just want to pause to give some comment here on turnover. Some of these complex projects, especially the ones that are very large, sometimes it can even be smaller ones that are in an existing building. If you as the owner plan on taking any part of the building, the systems, the areas over before construction is complete or
not vacating them and continuing to work in those spaces, that needs to be reflected in your schedule and in your RFP somewhere. You need to say those words and put forth your expectations, even if you don't know exactly how that's going to come across. Maybe you just show a phase turnover of phase one, phase two, phase three, and now you can talk about it. Giving the contractors the foreknowledge that that is going to be a thing.
is incredibly important to your budget and your schedule because it will impact it, whether you want it to or not. I know you have experience with this, Brad
Brad Wyant (29:43)
Yeah, it's hard for hardly anything about logistics not to impact schedule. I remember proposing on a job where the site was going to be so constrained that we were going to have to bus people into the area as opposed to having everybody park close to the job site. And I was asked to do an estimating endeavor on how expensive it would be in terms of the time, in terms of
Extending the schedule to have that be the case and what I learned was that the unions were going to require us to make the start time for the day include sitting on the bus because that was going to be part of the day's work and that just also had a huge impact on time spent doing the work which had a huge impact on productivity and dates and our ability to work.
Whenever you constrain logistics, even if it's just as simple as, yeah, we have one guy working loading dock, not three. And sometimes it might take 10 minutes to get something from our dock not zero. Take that into consideration. Try to put as much information about your system as possible. Because not only does that give the people bidding the information they need to know, it protects you down the road when you go back and say, well, in the RFP it said that I wasn't going to have somebody manning that loading dock
24-7. And it demonstrates to your contractor during the bidding phase that you're empathizing with the position that they are in, that you understand enough of their business to give them information that is critical to it.
Dee Davis (31:10)
the audience for this RFP is the bidding contractor. So just like if you're giving a speech, you have to speak to who your audience is in the chair. are they lay people? Are they professionals? Is this technical? Who are these people? It's the same thing when you're writing. And by the way, I'm just going to throw in as a tasty little tidbit. Same thing when you're writing an RFI.
You have to speak to your audience. We make the mistake very often of assuming that everybody knows what we know. And so when we're writing documents like this. We have to unlearn the information. We have to put ourselves in the shoes of the people who are reading it and assume they don't know the things that we know. They don't know that our loading dock is only open between.
7 AM and 3 PM and we can't receive anything before or after that and it's closed on the weekends. we assume that they know that if there's a lightning storm, all operations shut down.
just make these assumptions that everybody knows what we know. And even when contractors have worked in your facility before, it doesn't mean that they know how your facility operates. So we still have to put this together, even when we're going out to contractors that we know have already worked in our facility, or if you're a GC, if these are subs that you've worked with many times before, still put it in writing.
protect yourself and to be clear about what your expectations are. Because if you're not clear about what your expectations are, they're not going to be met.
Brad Wyant (32:36)
And let's say I'm a young person sitting in the client side, writing this RFP, and it's taking me a long time because I'm trying to detail these kinds of things. boss comes to me and says, hey, why aren't you just sending that thing out yet? What's going on? Well, I want to make sure I get all these details in. I want to make sure that I tell everyone what they need to know to do this job. knows that already. They already know. Yeah, but eventually we're going to get to a job where people don't or these people are going to turn over. I just want to have some language that I feel comfortable putting out.
that doesn't leave any room for doubt when we have this come up next, trust me, it's going to make the next time I do this faster. Those kinds of arguments you can make to the people that are pounding on your door, because we live in a time constrained world. get it. But you've got to defend the importance of these articles, because if you try to rush now, you're going to be trying to rush a lot later. And you're going to be putting in a lot more effort to save yourself time when you hung yourself out to dry, because you wanted to save that hour or two on this RFP
Dee Davis (33:31)
Yeah, harder now, easier later. It's true all the time. you spend the time the first time writing this really good RFP and you can reuse a lot of this information over and over again. And then brush up the details as it's job specific, but it's well worth the investment the first time around to make sure that we get all of this information in there. Another thing you're going to want to include with that
with the schedule is a plan, view, logistical layout. Something that's very, very important to contractors, is there onsite parking? Or somewhere close by to park because I've had jobs where I've had to bus people into and that impacts lots and lots of things like union rules. You're absolutely right. I've had the same thing happen to me even if you're parking, but it's a distance away, you walkable.
there are some unions have rules about how many feet away the parking area can be from the job site entrance gate. And I've actually had the unions come out and measure on one of my jobs. So if you're saying, yes, you can park, but it's three football fields away or two football fields away, you have to pay for that walking time. So it can impact your productivity.
But what kind of lay down area are they going to have and where is it? How many square feet is it? It matters based on the size of the job and the kinds of things you're going to have to shake out. Are there going to be spots for trailers? Is there going to be availability to put a trailer? If there's no trailers, OK, where are they going to work? Is it going to be room inside your office space? Are you going to provide them some office space to work in or not?
Is everybody working remotely or out of their truck? And then deliveries, where and how are we receiving deliveries as a construction site? Those things all matter tremendously to contractors.
the next element of a good RFP is a project facility narrative. So this is something that I see skipped way too often. It's even more important in an existing building than it is in a new building, but it's still incredibly important. So if it's a new building, it's more like a project narrative. If it's a existing building, it's a facility narrative.
For an existing building, the things that you want to include are a description of the operations of the existing building at a high level. Now I'm not asking you to include how you make your secret sauce. Nobody's looking for that. I'm talking about big items like ongoing operation interruptions, planned facility shutdowns, parallel projects happening on site. Those are massively important to
contractors. Also things like if you're getting deliveries on a regular basis that inhibit their ability to work in a certain area, they're going to need to know that.
You're going to want to include your must have or you must not list. And so this stuff might look like you're going to always have a clause that says no unplanned shutdowns. it seems obvious, but yes, we're going to say that in words. Other things might be you absolutely cannot park here for any reason. No foreman's trucks, no nothing.
you work in some of these really concentrated areas, especially in, downtown areas or anything like that. And you might just have a clause that says contractors are responsible for figuring out their own parking. Can't park here. That's, that's a common one in concentrated areas. No onsite trailers, no workspace, no, no nothing. you're on your own for all that. as the owner or as the GC.
You're going to require drug testing for staff and field. You need to put that on there. Even if you're paying for it, they have to provide the time and they have to make sure that they are allowing time for that kind of thing. I have not had a project that's required drug testing in quite a while, but I think it still happens in some facilities. Site safety orientations.
That's kind of one of those gotchas. Some owners will have their own site safety orientations. GCs always have those for subs. How much time? 15 minutes, 30 minutes, an hour? Does the owner have one and the GC has one? The stuff all adds up. So contractors need to know about these kinds of things.
You also want to provide a description of the intent of the project and what the team organization is going to look like. What contractors want to know, how much owner support is there really? Do they have 25 points of contact or one or two? That matters quite a bit. Provide a copy of the basis of design, even if it's not final yet. Sometimes it's not final.
final like approved by the owner kind of final when we're going out to GCs. That's okay. Even if it's in draft state, you can just call it a draft and say here's roughly our basis of design to try to give them some information. One of the items further down on my list is all of the contract documents, but if you're going out to a GC early, you may not have any yet. So your BOD might be your contract document and the best you can provide at the time.
Expected working hours and days, including overtime, weekend work, holidays. If you expect this contractor to work seven days a week, 12 hours a day, 24 hours a day, you need to tell them that. That you need to say it in very distinct words. It's very important that we are clear on what those expectations are, because it will greatly impact your budget and your productivity,
what are your expectations? Is it Monday through Friday, regular eight hour shift, and then over time as needed to keep schedule, or is it something different? Are you going to start at six days a week?
Any critical milestones that you have, like let's just say that you have a move in date for this brand new facility or this area of the facility. You have a move in date of X and you know there's probably all kinds of reasons why that date is critically important to your business. You need to put that on there so that that is a goal that we know that we have to figure out a way to help you meet regardless of whether construction is completed or not.
So can we get you the occupancy that you need?
Brad Wyant (39:24)
There are so many details to this project and or facility narrative that you're describing. If you were sitting in an owner's seat or you were sitting next to somebody trying to prepare a document like this, how might you say to organize your thoughts and prioritize each of these items? How much you organize them when you're preparing to write them? Is there a format that you would follow to say, you know, start here, middle here and there, or is it more flexible than that?
Dee Davis (39:50)
Well, the format that I use is set up just like I'm presenting it to you. here's the high level narrative. And then I start getting into the weeds on these different areas. there's a section called schedule. There's a section called facility narrative.
it's laid out just like I'm laying it out for you in the cast. And I have templates that I've written for owners. And again, every owner's a little bit different. When I write them, this is what I'll do. And I write RFPs for specific scopes too. Sometimes I'll be writing an RFP for a process scope or I'll be writing an RFP for a commissioning scope.
the information is really the same whether you're doing it down to a specific scope or you're doing the GC, which is a big scope. The format is kind of the same you're putting all the information in. it doesn't matter what order it's in. I would say not so much. I think it's more important that it's all there. And then it's organized you have your bullet points and you put it by section so that they can say OK, all the schedule stuff is going to be over here.
all the facility narrative stuff's gonna be over here. And you may have a budget section.
I don't usually have a budget section. I may in the in the narrative of the project say that our target budget is between X and Y. That's usually about all the information you're going to give in this kind of a document. You're not going to be giving any kind of detailed information generally on that. So I would say having the information all there is the most important thing. And not being too wordy.
when you are writing it. You're not writing a dissertation.
Brad Wyant (41:17)
You need to find a way to take the time to write it in a way that's easy to read quickly, but that allows you to get all the information you need to cross. It's like that famous Mark Twain quote. I didn't have the time to write you a short letter, so a long one. And the idea there is that it takes a lot more effort and time to put all of this detail into succinct, quick, easy to understand sentences than it does to throw them at the wall and
offer a ton of information that's difficult to grasp quickly, but that writing that short letter is a lot more valuable to the reader.
Dee Davis (41:50)
Well, as a fellow writer, I can feel that comment because what I often do when I'm writing, like I'm writing a book or I'm writing a blog post or whatever, I'll write too much and then I go back and trim. And how can I say that more succinctly? How can I shorten that up? It's too many words, it's too long. So maybe that's really a good strategy is when you're first writing your very first RFP and you're doing this for the very first time.
You're throwing the spaghetti at the wall a little bit. And maybe you're writing a little bit too much and then you kind of go back and start narrowing that down to something with more brevity. Nobody wants to read a dissertation. You don't want this document to be hundreds of pages long. you're going to have attachments. There's going to be, things like your project schedule, your contract documents, if you have any yet.
logistics plan, things like that. Those are going to be attachments. So the actual meat and potatoes of the document isn't really that long, maybe 10 pages. But one of the things about parsing it out into sections is that what you can do on the contracting side is the receiver of it is you can say here you deal with the schedule stuff here. You deal with the logistics stuff You're not generally having one person.
do everything soup to nuts unless it's a very small contractor. It's possible that they are, but a lot of times you're parsing that out and having different people attack different pieces of this RFP or RFQs, they work the same way.
Another very important item that I find that is almost always missing from these is a full list. I'm just going to say this again. A full list of any and all items that the owner is providing that needs to be coordinated with the design documents. I've been on projects where the owner doesn't provide anything. To be honest with you, that's my preference.
It's so much easier from a contracting standpoint for you to just be doing all of it because then it's all in your purview and you don't have to coordinate with a whole bunch of other entities and you just go. But depending on the type of project, it might not be like that. So especially when you start playing in some of the pharmaceutical arenas, in the medical arenas, the owner is doing their own medical equipment procurement. The owner's doing their own pharmaceutical
specialties equipment, all the process equipment generally. or they're hiring somebody to do it for them, which means and it's outside of you. So from your standpoint, it's by others.
All of those things touch your stuff, connect to your stuff, need space in your area. who is receiving it, who is installing it, who's connecting it, or do I just have to leave room for it? Like that happens a lot in labs. Owners or some other third party will provide all the lab equipment. Okay, I just need to know what it is that you're doing.
What electrical do I need to provide? What plumbing connection do I need to provide? How much space do I need to leave here? Is it bigger than a bread box? Is it heavy? Is it something that I need a med gas for? And are you handling it all yourself, procurement all the way through installation, startup and everything, or are you expecting the GC or trade contractor to be offloading it, setting it and connecting it?
Those are all critically important things. One thing to remember, and I just said this in a design meeting to my designers on a project I'm working on the other day, if it's not on the contract documents, the contractor doesn't know it exists.
They don't. If they can't see it on the contract documents, they have no idea that it exists.
Brad Wyant (45:21)
This is so true. I once had the opportunity to be on the bid team for something at a courthouse and a lot of the job involved things that were outside of the area we were working in, but they had to connect to other parts of the building and we really wanted to work, but a lot of stuff wasn't shown. So they had a day where everybody could come out and take pictures of everything around the facility and find out for themselves what they had to do and
Boy, I I heard later on that there were things that we hadn't had access to or things that we didn't get the chance to see that we didn't adequately documents that ended up hosing us. And we did the wrong thing as the contractor. didn't protect our own liability. That stepped on us. But think about the mindset that you're putting your contractors in. It isn't written down. They're not going to capture it. And if they don't capture it, they're going to try and find a way to stick you with it later on. If they are put in a corner, the best way to go is to try to make it as
easy as possible for them to understand everything they need to understand during review of the documents as opposed to thinking, well, you know, I know I didn't put it in the documents that clearly, but they had a chance to walk the job. So they should know. No, it could be that the person who walked the job doesn't communicate effectively with the person on their bid team. That would be on them obviously, but it's don't don't make it hard on people. Don't hide information.
the kind of register Dee's talking about of a list of these items. It's a lot of work for you on the owner side to put that together. I'm sure it's not something that's going to be easy, but it's going to be well worth your time because if you don't do it and there's a problem, they're going to try to make you pay for it later. If there's no problems, then it all goes well. but it's a lot easier to deal with it this way than it is to deal with it the hard way.
Dee Davis (47:09)
Well, I have to be honest, I've never seen it not be a problem. Ever.
in the history of owner furnished equipment on my projects. As much as you try, I I learned some hard lessons in the first few projects that I did that were like that. And it depends too on the owner side. If they have people that are well versed in this stuff or maybe they hire a, I have a friend that's a medical equipment coordinator. She's really good.
at what she does. And if they hire her to do the medical equipment coordination, she is going to communicate. She's going to have it all done. She's going to communicate it all. So just because it's coming from the owner's side doesn't mean the owner themselves has to do it. Maybe they're hiring a professional to handle that for them. Excellent. Highly recommend it. I've done it. I've been the owner furnished equipment coordinator on the owner's side before. I love it. Let me do it for you.
because if you let me do it for you, you're not going to miss anything. But if you just have the procurement people say, I don't know, here's maybe what I'm going to provide you. And then they change their mind and they don't communicate. And that happens quite a bit. Or there were changes made after they gave you the information and they didn't communicate. That happens quite a bit. And so I've had chillers come out with nozzles and completely the wrong
place or different place than you told me they were in because.
You gave me a drawing and then you changed everything later and you didn't tell me. And so I piped to what the drawing was and then it came out. We had to redo it all. You're going to pay for that owners. it's a change order.
Brad Wyant (48:37)
It's very interesting time during RFP, I think, where the owner gets to use a scalpel to decide what is and is not in scope and the way that you use that knife can save you or hurt you deeply later on in the job. I remember a time when we had to procure a piece of equipment for the owner that was not well specified and that had to work with something else in the facility. And we ended up being able to write ourselves RFIs to prove that the design had not been completed to the extent that we were made whole.
We didn't make a ton of money like I said in our previous podcast. We made a little bit more money on fee because the change order fee is higher than original bid fee, which is tough, but it's still one of those things. Don't don't paint yourself into a corner now by leaving room for doubt by making part of it responsible for by one person part of it. Somebody else's responsibility. Find ways to make the whole problem somebody else's responsibility or solve the whole problem yourself. Don't.
leave this gray area where Tommy can blame Sally and Sally can blame Tommy and everybody can put you at risk. This is your best opportunity to prevent that from happening.
Dee Davis (49:41)
That's fantastic advice For you can't see I'm clapping. I'm air clapping over here because this that is absolutely some of the best advice that you can give somebody is make it all either your problem or somebody else's problem, but trying to chop up scope and make three or four different people cooperate every single time you do that. The potential for scope gaps is there.
And scope gaps gets us on every job to some extent. So a lot of what we're doing here on the front end is trying to eliminate scope gaps so that we don't have these kinds of things. A good RFP is an excellent way to eliminate a scope gap because now you're putting all of your expectations and your hopes and dreams down in writing and clearly communicating that to the bidding contractors.
whether it's owner furnished or it's contractor furnished. If you have anything that is shipped loose, that is my least favorite term in this industry, shipped loose. this pertains generally to equipment.
vessels, skids, things like that, skidded equipment. If things are being shipped loose from the manufacturer, that means somebody's got to reattach it on the other end out in the field. Who's going to do it? I hate ship loose stuff. is so hard to get manufacturers, vendors,
to tell you what they plan to ship loose. They don't care. It doesn't impact them at all. They don't have to most of the time. Sometimes, depending on the type of equipment, they will come out and reinstall it in the field. But when it comes to HVAC type things, they're not coming. If it's process type things, maybe they will. Maybe they're coming out to do an SAT and they will assemble those ship loose items.
And they're doing it not to be malicious. They're shipping loose because they don't want things to get damaged. there's a lot of parts and valves and whatever, and they want to package that stuff up so that it doesn't get damaged. That's why they're doing it. But when they do that, you need to know what is being shipped loose. Don't wait for them to say, I'm going to ship something loose. Ask the question. Ask the question. What is being shipped loose? Give me a list and
Tell me which one of these, if any, you plan to reinstall yourself or do you expect others to do it.
the by others clause in shop drawings, in vendor things, so if you're working on a project where there's a lot of owner vendors of any kind, this happens a lot in medical work, it happens a lot in pharmaceutical work. Somebody needs to review their shop drawings in detail because what you're looking for is where they're interfacing with whatever you're doing.
And you're looking for that by others, by others, by others. That will be the death of any project. So owners, it's really, really important if you don't have the time to do it, hire somebody to do it for you. Task it to somebody to go through all that stuff. I was on a hospital project a number of years ago where we had all these specialty spaces and specialty vendors that the owner was buying all this stuff from.
when I got assigned to work on this specific area, somebody else was assigned to work on it for quite a while. I got moved over into that area. when I started going through all the shop drawings, was astounded how much was by others. the vendor was just making all these assumptions about the conditions of things when they got there.
The connections of things when they got there, the installation of things when they got there, and it was in nobody's scope. Nobody's. Because the owner bought it over here. It wasn't in the contract documents over here, so the GC didn't know about it. And so we have, we had the grand canyon of scope gaps in this area that had to be filled.
Brad Wyant (53:26)
And Dee is there a more expensive time to buy out scope than when it needs to happen tomorrow?
Dee Davis (53:31)
It's insane that this is the worst time to eliminate scope gaps is in the last 50 % of a job. You don't want to do that. whole purpose of this, all these things that we do upfront is to eliminate scope gaps. And what that does is reduce your cost. It's cheaper to buy it out now than it is to buy it out later.
So what I can hear lots of owners and even GC saying out there right now is we don't have all this information yet. We haven't finished design yet, maybe. We don't know all the details. OK, that's fine. Do an allowance. write out as much as you can in the RFP. Say I'm going to procure 80 pieces of equipment they are this type of equipment.
Five of them are heat exchangers, six of them are boilers, whatever it is that you've got with a certain number of nozzles and a certain number of connections, you can make some swathing assumptions based on what you do know at that point.
try to capture at least something that will allow the GC to give you an allowance to draw from based on whatever information you can provide so that everything's not a change order.
cause that's what it'll be later is it will absolutely be change orders. And I've seen these change orders be hundreds of thousands of dollars because you're dealing with multiple pieces of equipment, multiple connections,
coordination that is just it is incredibly complex and this is just one of the gotchas that I see happen more often than not is the ship loosed in the owner furnished.
Brad Wyant (55:04)
big area for risk there.
Dee Davis (55:05)
Absolutely. So the next thing that you want to provide in your RFP is all the contract documents. Anything you can possibly provide, even if they're in draft or early forms, give them everything you possibly can. And some owners will have things like campus building standards or campus design standards and things like that, include it.
Absolutely include it if it's available. If it's something that your design team is held to, if it's something that your GC is expected to be held to, absolutely provide it and make sure that you're giving them as much information as you can.
You are at significant risk if you don't have a detailed RFP. I have a client that does not do detailed RFPs. And they...
They consistently put RFPs out that are extremely vague and are not really written for contractors. they use the same kind of document to buy a case of copy paper as they do to hire a contractor. And that is not a great business practice. It doesn't protect you as an owner because there's
so many details in there that are going to protect you if you write it specifically for construction projects.
Anything to add?
Brad Wyant (56:22)
It's tough. think that a lot of people that are in the role of making construction happen on the owner's side probably are people who are used to doing orders for equipment, orders for different kinds of things. So the position of somebody who's tasked to both keep the wheels on the bus as it's rolling down the road and to build the brand new bus, I do not envy that. You have to have a very broad set of skills. But I hope this podcast has been a good
Intro into some areas that a person should pay attention to if they have that many different. Areas of work under their purview and there's something that comes to mind for me along the lines of this that maybe anecdotally is useful to describe why RFP writing and good RFP writing is so important. I watched a TED Talk recently. The thesis of it was that good leadership is boring that. When somebody in a position.
of having to make sure everything happens, does their job. Nothing bad happens, it's all smooth and it's hard to see the effort that went into preventing disasters, preventing something from getting worse than it could have. So it can often be almost disheartening for somebody to put in a bunch of work to do something to make sure that bad things don't happen and then not get the attaboy and not get recognition from your internal organization. So.
The only advice that I would give somebody in that position is find a way to demonstrate the value that you're offering without allowing disasters to happen. Don't make them wish you were there when you're gone. Make it clear through whatever means possible, through evidence, through interviews with contractors that read your RFPs and compare them to other RFPs they get. Make it clear that you're offering
a distinguished value to your company and go to bat for yourself, go to bat for the importance of the work that you're doing.
We often look at the worst examples of things that go wrong as a way of evaluating what to do right. But when things go right, we don't celebrate our wins very well. So find ways to celebrate your wins. Find ways to demonstrate to your leadership that the work you do has impact and is powerful.
Dee Davis (58:21)
This is probably a very undervalued area. everybody's excited at the beginning of a new project. Like we're so optimistic.
Brad Wyant (58:29)
We're like in the beginning of a new relationship. This time's gonna be different. It's gonna be great.
Dee Davis (58:34)
honeymoon stage, everybody's happy, everybody's excited, it's like we're on our way to Disneyland every single time we're starting a new project and we forget in our excitement that we need to take the time to do these things I guess maybe it's a little bit of a later when we're the honeymoon's over.
and things are a little bit rough out there, this is going to help us. This is going to save us from having to argue. We have to pick our battles definitely in this industry. And we don't want to be battling over this kind of stuff, stuff that we could have prevented. If you just put it down, if you just write it down, I mean, hopefully you don't even have the conversation, that's ideal. But if you do have to have the conversation, then at least you have something to point to.
The RFP is a bid document. So if it isn't in the contract documents and it isn't in the RFP, it's a he said, she said, and we're all in a bad place. We don't want to be there. So just put it in the RFP or somewhere else in the bid documents, and if it as appropriate, and hopefully we can eliminate the really uncomfortable parts of the business.
when we're no longer in the honeymoon stage and we're not driving to Disneyland anymore, we're exhausted and over sugared and we're driving home and we just can't wait for it to be over. Maybe that's a really good analogy for our industry. Beginning of the job, we're on our way to Disneyland and at the end of the job, everybody's done and exhausted and just wants to go home.
Brad Wyant (59:59)
I think that's a perfect analogy. It's like what could possibly go wrong? My dad tells this story about the vacation from hell where everything went wrong on this vacation. They kind of cheaped out on the booking and it ended up being like not at all what they thought they were getting. The boogie boards gave my sister and I rashes. They had somebody break in so that it was like what could possibly go wrong? Everything. Everything could possibly go wrong.
That is the autobiography of everybody that's ever worked in construction. What could possibly go wrong? Everything. Make sure as little goes wrong as possible by putting in the work now.
Dee Davis (1:00:32)
I was at a birthday party with four and five year olds yesterday and holy Toledo. I just got to say, I have to give my daughter-in-law a shout out. She's so brave. She's so brave there must've been 20 kids of all ages, but most of them were four or five year old kind of range. And it was a tea party for my twin granddaughters four year old birthdays.
as I was watching, mean, loud chaos, there's kids running everywhere. And I was thinking, this is a little bit like a project in the middle of like the chaotic part of a project. Somebody's crying. Somebody's wet.
Brad Wyant (1:01:09)
somebody's crying and somebody's wet. It's horrible how true that can be though, because somebody will be crying by the end of job and somebody else will be soaking wet.
Dee Davis (1:01:19)
the parents are just trying to hold it together and there's just, it's just chaos. It's absolute chaos. And, with twins, it's extra special because they want everything the other one has. So of course you have to buy two of everything and they better be exactly the same. my son was saying, please tell me there's two of those.
Please, please, I will pay you if you tell me there's two of those.
Having a house full of kids at a birthday party is not that unlike running a project sometimes. So we want to minimize the chaos by having a good RFP. So anything you could do on that front is well worth the investment. Hire a consultant. If you don't have the resources to do it or you're just like, I don't want to do it. I don't have the time to do it. I don't have the knowledge to do it. A lot of companies
They put this on their sourcing departments. Well, depending on the company and depending on the sourcing department, some of these companies are really well versed in this and they have it down and they're doing a great job. And other companies kind of muddle through it because maybe they don't do construction very often. Hire a consultant to do it for you. It's so worth the money. If you have an owner's rep, your owner's rep should be able to do this for you.
If you don't have an owner's rep, you can hire somebody like me or any of the other millions of consultants out there who can do things like this for you and make sure that you get it as right as possible. work with lots of different companies. I'm certainly not the only one out there. work with lots of other consultants who do this kind of thing all the time. There's people that specialize in producing these kinds of documents for you on your behalf to try to protect you and make sure that you get the best possible outcome.
from beginning to end.
Brad Wyant (1:02:58)
If you don't know what could go wrong, hire somebody who does.
Dee Davis (1:03:01)
Ooh, I like it. can I borrow that? You don't know what can go wrong, hire somebody who does. I might use that.
by the way, he named this podcast. I struggled for weeks to try to come up with the perfect name for the podcast. And I was really struggling and he just went management under construction. And I perfect. It's perfect.
Brad Wyant (1:03:09)
Yes.
$160,000 of an MBA later and here I can can help with some taglines
Dee Davis (1:03:24)
Hey, that has value. That has value, my friend. Thanks for joining us. We'll see you next time.
Brad Wyant (1:03:30)
Goodbye, everybody.
