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Academic Project:

Award

Awarding of Contract

Description:

Construction Administrator prepares an Approval to Award Contract package:  Campus to submit package (components listed below) and report bid savings, even though bid savings are retained by campus.  Print out a report from the California Contractors State License Board (CSLB) online contractor license database. This will verify that contractor has current license with no restrictions from contracting, and also provides contractor's legal name; check if contractor name per CSLB matches name on prequalification letter and on the agreement forms, as many contractors use DBAs (doing business as). If contractor uses a DBA, all docs should reflect full name, i.e. "A. Teichert & Son, Inc. dba Teichert Construction."

Joint Venture (JV): Be aware the names of all JVs should also be checked against the license, as these firms are prequalified individually, using their individual licenses, not as a JV. The CSU Prequalification Program Administrator may not be aware of the JV at the time of prequalification. Business and Professions Code, section 7029.1, requires the license of the JV to be in place at the time of award. For example, "McCarthy Building Companies, Inc." and "Clark Construction Group California LP" have prequalified individually and possess a JV license in the name of "Clark/McCarthy A Joint Venture". 

Debarment (DIR):  Access following DIR website to confirm that the low bidder is not on the DLSE list of debarred contractors.

Approval:  Construction Administrator submits the package to the authorized approving authority (per campus mgmt plan) for review and approval. If package is complete and acceptable, the approving authority signs the Approival to Award memo in the place indicated on the form.

Notice of Intent to Accept Bid Letter (Award Letter):  There is no policy in public works that the Contract/Construction Administrator must issue a five-day Notice of Intent to Award to the bidders.

Notice of Intent to Award Bid Letter: this letter, signed by the authorized approving authority transmits to the Contractor for signature the Contract Documents, which include:  agreement form, performance bond, payment bond, certification, and the payee data record (STD204).  When Contractor returns all counterparts of the contract docs, Construction Administrator reviews them as follows:  

  1. all counterparts are signed by the Contractor and that the Contractor supplied the license and tax ID number, which is also on the STD 204 form to be returned with the contract; 
  2. that the certification form is appropriately filled out with the contractor indicating its business type and attaches requisite documentation authorizing signer to sign the contract; 
  3. ensure insurance coverage is correct; 
  4. ensure bonds are completely and correctly executed for each of the contract counterparts, and that sureties are admitted sureties in California (go to www.insurance.ca.gov, select company profiles, and search and print out a company profile for the surety), and 
  5. check that insurers AM Best rating is no less than A:VII, by accessing AM Best's website (www.ambest.com) and search/print out a copy of Best's Rating.  

Once Construction Administrator is satisfied that all contract documents are in order, s/he then routes them internally for all appropriate signatures, including Accounting, and then forwards the agreement package (Contract Documents and Agreement Certification form) to Office of General Counsel for signature. Counsel may also wish to review the contract specifications.

References:

Forms/Templates:

Approval to Award Package:  cover memo with approval signature block, bid abstract, statement of finances, CPDC 2-7 and 2-7.5, agreement certification, contractor license and DIR registration verification, DLSE debarments.  

Notice of Intent to Award Letter:  letter signed by approved authority transmitting contract documents (2 pg agreement, payment bond, certification, payee data record) to contractor for signature.  


CSU Builders Risk Insurance Program (BRIP)

Description:

CSURMA, CPDC and Alliant established the BRIP for all major capital outlay projects, and this program includes builders risk insurance and self insurance for earthquake coverage. A builder's risk policy is not a liability policy; it is a policy covering property, i.e. structures and building materials. Contractors bid the project without this coverage, and are responsible for the deductibles. Maximum coverage is $50,000,000 per occurence, in excess of the deductibles.  

Enrollment: Campuses must enroll their projects to obtain builder risk insurance coverage by submitting an application contained in the Construction Insurance database on the MetaBIM website  (https://calstate.metabim.com/dash/caps/brip/Default.htm). The optimum time to enroll the project into the BRIP database is when Construction Administrator/Campus advertises the project. Once Notice to Proceed is issued, Construction Administator must update the database online and upload the NTP.  

Approval of Enrollment: Chancellor's Office Construction Management staff will review and approve all enrollments. 

CPDC Invoicing of Premiums:  CPDC will invoice all projects for the initial BRIP premium, taxes and fees, and the seismic fund (self insurance program*) at the end of the quarter in which the project is enrolled. For projects with a construction cost greater than $5,000,000 upon enrollment, CPDC will invoice the final premium amount due after the project is complete and the coverage has been closed. Projects with a construction cost of less than $5 million will not be invoiced when the coverage has been closed. 

Updates:  The Construction Administrator is responsible to update the project during construction to adjust the completion date as necessary and the contract amount and construction cost. 

Refer to the document, "BRIP Information and Procedures-October 2016", for more information (available at http://www.calstate.edu/cpdc/CM/brip_procedure_oct16.pdf).

Builders Risk Application:  The following project classifications will require special approval by the insurance carrier. For these projects, campuses shall submit the Builders Risk Application to Alliant:  

  1. Any project greater than $50,000,000; 
  2. Wood-framed projects with awards greater than $10,000,000; 
  3. Structural Renovation, or 
  4. All Other Construction. 

Examples of structural alterations include:  work such as moving or removal of load bearing walls or supports; the installation of new stairwells or elevator shafts within a building; the construction of additional stories on top of an existing structure; foundation work/underpinning; or the restoration of buildings; or structures damaged by fire, windstorm, collapse, or other work of similar nature.

*CSU Construction Project Seismic Fund:  Per Public Contract Code section 7105(a) "Construction contracts of public agencies shall not require the contractor to be responsible for the cost of repairing or restoring damage to the work, which damage is determined to have been proximately caused by an act of God, in excess of 5 percent of the contracted amount, provided, that the work damaged is built in accordance with accepted and applicable building standards and the plans and specifications of the awarding authority."  

Public Contract Code 7105(b)(2) "Acts of God" shall include only the following occurrences or conditions and effects:  earthquakes in excess of a magnitude 3.5 on the Richter Scale and tidal waves."

CPDC established the CSU Construction Project Seismic Fund to cover the 5 percent of the contracted amount in the event of earthquake or tidal wave. When Campus enrolls the project into the BRIP online, they will see the amount allotted for the Seismic Fund (each project contributes 0.1% of the Construction Cost to the Seismic Fund). CPDC will collect this contribution with the initial BRIP premium invoice.

References:


CSU Owner-Controlled Insurance Program (OCIP)

Description:

CSURMA, CPDC and Alliant established the OCIP, which is required for all major capital outlay projects with a construction cost of $10 million or more, and this program includes the following coverages:  workers compensation, employers liability, commercial general liability, professional liability, and contractors pollution liability.  

Application and Enrollment: Campuses must enroll their projects to obtain OCIP coverage by submitting a CSU OCIP Project Identification Sheet (application) to Alliant, which may be found on the OCIP website (http://www.calstate.edu/cpdc/CM/OCIP.shtml). The optimum time for campuses to submit projects for enrollment into the OCIP is prior to advertising the RFQ/RFP for the selection of the prime contractor or prime contracting team, as CSU must include OCIP-required documents into the bidding documents (Bid, RFQ, RFP).

References:

  • Contract General Conditions, Article 4.06-b.

Forms/Templates:

  • BRIP Procedure, Oct. 2016 (download from BRIP website above)
  • Builders Risk Application