In Part 1 of our series on project bidding, we discussed bidding on public construction projects and some unique aspects of those kinds of projects. Once again, many concepts are pertinent for both types, but there are some key ways that private (non-governmental) construction projects differ from public ones. You will find that in many ways, bidding on private construction projects is less onerous and constricting than it is with its public counterpart.
Whereas public construction owners (usually the municipal, state, or federal government) usually seek the lowest price from a selection of qualified contractors, private construction owners are under no legal obligation to seek any specific price range from bidders. Government entities are required to solicit bids through local newspapers to further ensure that bids coming through are at the lowest reasonable prices.
Conversely, private bids are often awarded to contractors who have solid reputations and are therefore unlikely to have to scour publications to find work. As important as it is to network as a contractor no matter the types of projects you are seeking, personal connections to owners and developers will go a long way in winning bids for private projects. If you personally go above and beyond to make sure the work performed is satisfactory, you might get recommended for future projects.
One advantage of private projects is that you may work on multiple projects at one time (if you have the capacity). Often, contractors who are locked in to a contract with a public entity are legally forbidden from concurrently working on other endeavors.
Protection for Contractors
A major benefit for prime contractors is that unlike in public construction projects, they are free to claim a mechanic’s lien on a private property. This tool, which is an interest on a piece of property, is filed by contractors as a way to ensure payment. Public projects allow ways for contractors to get payment in the event of an issue, but the process for that is more complex than with a private project.
Similarities to Public Projects
Both types of construction projects will see the dissemination of procurement documents to qualified contractors. Contractors will want to attend a meeting with the project owner or developer and survey the site before submitting a final, sealed bid.
Private construction projects provide for a greater amount of flexibility for all parties. Generally, private projects flow more smoothly for contractors, as there is far less red tape to work around than with public projects. If you are seeking legal clarification for any construction issue, please reach out to Florida Construction Law Group today and we will be happy to speak with you further.