The evaluation and selection of contractors leading to the award of construction contracts is subject to the California Public Contract Code (PCC). State law requires the University to publicly advertise certain construction contracts for competitive bid; however, when a contract is valued below the dollar limit established for competitive bidding, the contract may be awarded through an informal competitive bidding process or by negotiated contracting. (Negotiated contracting, a process during which a contractor is selected without competition, is sometimes referred to as "direct selection.")

PCC 10500 - 10506 require that University construction contracts in excess of $50,000 be competitively bid and be awarded to the lowest responsible bidder or, on the refusal or failure of such bidder to execute a tendered contract, be awarded to the second-lowest responsible bidder or, on that bidder's refusal or failure to execute a tendered contract, be awarded to the third-lowest responsible bidder, unless it is determined that the acceptance of a responsible bid is not in the best interests of the University, in which case all bids shall be rejected.

Editor's Note: Beginning on January 1, 1978, the California Education Code was amended to impose competitive bidding requirements on The Regents where formerly such bidding was required as a matter of self-imposed Regents' policy. Before the code was amended, The Regents did have the right to negotiate and award sole-source contracts of any dollar amount. The right to negotiate contracts is now restricted by the PCC 10500-10506, which superseded the California Education Code in 1984 as the competitive bidding law applicable to the University (see PCC).

According to the California Constitution, the University is subject to "competitive bidding procedures as may be made applicable to the university by statute for the letting of construction contracts, sales of real property, and purchasing of materials, goods, and services." The requirement for competitive bidding shall not be avoided by splitting a project into smaller units of work or by the use of change orders to authorize substantial additional work Substantial Change Orders.

The sanctions for not complying with competitive bidding requirements are very strict. Any person or entity may protest the award of a contract at any time during the term of the contract. If the courts find that the competitive requirements were not followed, the University official signing the contract may be fined, imprisoned, or both. The contractor would be required to refund the amount of money paid to the contractor by the University, even if the Work had been completed and accepted.  The project may face a substantial delay for rebidding or reselection.

State law requires University projects over certain cost thresholds to be publicly advertised and awarded to the "lowest responsible bidder" in accordance with PCC10500. "Responsible" refers to a prospective bidder's ability to satisfactorily perform the Work. Selection of the lowest responsible bidder does not necessarily require an award to the bidder submitting the lowest dollar bid. unless that bidder is also found “responsible” (qualified and thus deemed to have the ability to satisfactorily perform the Work). Refer to the PCC; Constitution of the State of California, Article IX, Section 9; and Bid and Award Process Flow Chart Competitive Bidding and the following sections of the Facilities Manual for detailed advertising requirements. 

The PCC requires formal competitive bidding for projects with estimated contract sums over $640,000 and permits informal competitive bidding  for projects between $50,000 - $640,000. The University has established procedures for negotiated contracting  for projects under the dollar limit for competitive bidding. 

When utilizing formal competitive bidding, the University follows the following process:

1. Advertises for bids in accordance with PCC 10502
2. Receives sealed bids on or before the Bid Deadline
3. Publicly opens all such bids
4. Prepares and publishes a Bid Summary of all such bids
5. Awards the contract to the bidder submitting the lowest responsive bid or rejects all bids. 

When utilizing informal competitive bidding, the University follows the following process: 

1. Requests bids from at least three qualified bidders on the basis of identical sets of bidding documents issued to the bidders at approximately the same time
2. Prepares a Bid Summary of all bids
3. Awards the contract to the lowest responsible bidder submitting a responsive bid or rejects all bids. See Informal Competitive Bidding Procedures.

For projects funded in whole or in part by the federal government, the rules of the funding agency should be reviewed for competitive bidding and public advertising requirements. Normally, federal agencies require competitive bidding with public advertising only for projects with estimated construction costs exceeding $10,000. If federal requirements are more restrictive than “PCC,” the more restrictive requirements must be followed.

Informal Competitive Bidding (for projects between $50,000 and $640,000) is a direct bid solicitation to 3 or more contractors able to perform the applicable work. The contract is awarded to the lowest responsible bidder submitting a responsive bid, or all bids are rejected. While selecting bidders, repeated awards to a single contractor is not allowed; an impartial method must be used for selecting contractors who are to receive bid solicitations. Suggested methods include:

• Regularly solicit bids from all responsible contractors who have expressed interest in receiving informal bids, or
• Select contractors on a rotating basis from a pool of responsible contractors able to perform such work. 

Identical sets of bidding documents must be issued to all bidders at approximately the same time. When using Informal Competitive Bidding under PCC 10504.5 and when construction value exceeds $300,000 but does not exceed $640,000 General Contractors and (if using), Mechanical, Electrical and Plumbing subcontractors must be qualified. In order for a Bidder to become “Base Qualified”, the Bidder must conform to the requirements of the OP approved template (hereinafter referred to as “Base Qualification Questionnaire”). The Base Qualification Questionnaire may not be modified without approval from UCL. If a Facility wishes to add to the qualification criteria, it may perform a second level of qualification assessment consisting of additional criteria.

The Facility may prequalify contractors in advance or qualify bidders at the time of bid. A Base Qualified bidder will maintain the Base Qualified status for up to a year from the date of the signed Base Qualification Questionnaire form. The Facility may maintain a pool of qualified contractors. The pool of qualified contractors must be available to all bidders. The Facility must bid to a minimum of three or more qualified contractors who are invited on a rotating basis (see Informal Form Contract Templates).

The President of the University and Regents have set a goal of 25% SBE/DVBE participation for Design & Construction contract spending by 2025. Sheltered bidding is a program whereby a portion of contracts are designated, before solicitation of informal (competitively bid $50k - $640K) or negotiated (under $50K) bids, for competition from Small Business Enterprises (SBE) and/or Disabled Veteran Business Enterprises (DVBE). The goal of sheltered markets is to provide greater bidding opportunities to small and disabled veteran businesses in UC capital programs. For these contracts, a minimum of three qualified SBE/DVBE firms must be invited to bid.

Contracts awarded under the Sheltered Bidding program require 51% of the work to be performed by an SBE or DVBE that has completed and submitted UC’s Confirmation of Certification form. This performance requirement will be verified on the project bid form, and then again with the Final Distribution of Contract Dollars form submitted with project closeout material. Campuses will have the discretion to rebid the contract outside of the Sheltered Bidding Program if prices are not competitive. The Sheltered Bidding program is broken up into three programs according to scope and/or size of project:

1. Sheltered Bidding - This program covers small construction contracts
2. Sheltered Applicant Pool - This program covers design and professional services contracts under $100,000
3. Large Project Sheltered Subcontractor Bidding - this program covers large projects that informally bid subcontracts

Sheltered Bidding Pool for Small Construction Contracts. Sheltered bidding may be used for selected Negotiated (<$50,000) and Informal competitively bid (<$640,000) projects. Preregistered SBE/DVBE contractors may be invited to bid by campus staff. A minimum of three firms must be invited from the list for each bid. 51% of the contract value must be performed by SBE/DVBE firms. This will be documented on the bid form. If bids are not competitive, the campus may reject all bids and rebid in the non-sheltered market. A further description of the program can be found in the facility manual. For Negotiated Contracts with a construction value less than $50,000, contractors must submit a Contractor Profile form, to automatically be entered into the Sheltered SBE/DVBE Bidding Pool. For Informal Competitive Bidding when construction value exceeds $300,000 but does not exceed $640,000, contractors must submit the Base Qualification to automatically be entered into the Sheltered SBE/DVBE Bidding Pool.

Sheltered Applicant Pool for Professional Services. The Sheltered Applicant Pool may be used for selected consultant services agreements under $100,000. The campus may reach out to firms in the pool list to solicit a proposal. Firms will be selected based on qualifications. 51% of contract value must be performed by SBE/DVBE firms. This will be demonstrated by the Report of Subconsultant Information submitted with the proposal. 

Large Project Sheltered Subcontractor Bidding. Large project sheltered subcontractor bidding may be used for subcontracts on selected Formally Bid (>$640,000) agreements. In this process, the construction manager, general contractor, or design builder may set aside trade packages for bidding or assignment solely for SBE/DVBE subcontractors and subconsultants. The sheltered SBE/DVBE contractors must meet the same certification requirements as the small project sheltered bidding.  The construction manager, general contractor, or design builder may utilize the SBE/DVBE firms already enrolled in the University’s Sheltered Bidding Pool, but it is not required. 100% of the subcontract value for these identified trade packages must be performed by SBE/DVBE firms, and this will be documented on the Expanded List of Subcontractors. Under the Sheltered Subcontractor Bidding program, no more than 25% of the total value of the contract between the construction manager, general contractor, or design builder and the University can be set aside for sheltered subcontractor bidding.

1. This program can be utilized for projects using CM at Risk, Design-Build, Brief Design-Build, and Progressive Design Build agreements.
2. A minimum of three certified SBE/DVBE firms will be invited for each identified sheltered subcontractor bid. If bids are not competitive, the construction manager, general contractor, or design builder may reject all bids and rebid in the non-sheltered market.
3. The identified Sheltered Subcontractor bid packages will not exceed the 25% maximum total value of construction.
4. This program can be utilized for projects utilizing the standard Design-Build and Brief Design Build agreements that allow Contractors to choose their subcontractors without bidding, the use of this program will not change the project bidding or awarding requirements in any way.

A contract may be negotiated with a contractor if the construction cost of the project does not exceed $50,000. The contract sum is negotiated between the University and the contractor. For negotiated contracts, the contractors must be selected on a rotating basis from a pool of contractors able to perform the type of project work required. A memorandum stating the conditions warranting such an award, and a justification of the accepted price as being reasonable (such as an independent estimate), must be written by the University's Designated Administrator and placed in the project file.

Examples of further conditions when negotiated contracting might be appropriate include, but are not limited to, the following:

• A contractor is already working near the project site on other work. If this contractor were selected, mobilization costs would be saved, and congestion and coordination problems would be avoided.
• The Work must be performed immediately to protect the health, safety, and welfare of University personnel or the general public.

During a project's design phase, the Facility determines which contracting mode to use. Both the contracting mode chosen and the type of bidding used will affect the duration of the bidding period. Project stakeholders should be informed of the duration of the required bidding period.

It is the policy of The Regents of the University of California, consistent with State and Federal law, that race, religion, sex, color, ethnicity, and national origin will not be used as criteria in its business contracting practices. Every effort will be made to ensure that all persons, regardless of race, religion, sex, color, ethnicity, and national origin, have equal access to contracts and other business opportunities with the University.

PCC 10500.5 urges The Regents to adopt policies and procedures to facilitate the participation of small businesses, particularly small disadvantaged business enterprises (DBE), women-owned business enterprises (WBE), and disabled veteran business enterprises (DVBE) in business contracting with the University. Complementary to the 25% SBE/DVBE goal set for the procurement of products and services, the President of the University California and Regents established a 25% goal for SBE and DVBE participation in design and construction contracts.

Each Facility must use a broad range of outreach activities designed to improve the University's access to qualified small businesses, including DBE, WBE, and DVBEs (D/W/DVBEs), and to build goodwill in the community toward the University's construction programs. Existing outreach programs should be continued, and new ones designed as needed. Such activities could include, for example:

• Publishing a brochure or other instructional material designed to convey information to all small businesses about the University's construction programs; the material should contain a directory of key personnel and information on how to become aware of the University's upcoming construction projects.
• Participating in trade fairs for the purpose of enabling small businesses to demonstrate their abilities.
• Attending trade fairs and business opportunity events presented by others for the purpose of meeting new small businesses, including DBE, WBE, and DVBEs, and discussing common problems and solutions with other organization's construction staff.
• Presenting seminars for groups of small businesses, including DBE, WBE, and DVBEs for the purpose of instructing them on how to do business with the University.
• Meeting small business contractors on an individual basis to understand their capabilities and qualifications.
• Visiting small business locations for the purpose of inspecting their facilities, understanding their capabilities and prequalifying them as University contractors.
• Participating in local organizations that support small businesses, including groups oriented toward D/W/DVBEs.

Each University location must designate a coordinator knowledgeable in its facilities contracting systems who will be responsible for the following:  

• informing small businesses, including DBE, WBE, and DVBEs, of appropriate contracting procedures;
• referring them to appropriate project contracting staff;
• coordinating outreach activities; and
• maintaining statistical records.

For purposes of statistical reporting, the University will require businesses to certify their status as SBE, DBE, WBE, or DVBE. The  Confirmation of Certification form shall be used to obtain this information for all Contractors, Subcontractors, Designers, and Consultants.

As a federal contractor, the University is required, periodically, to produce statistics on its utilization of DBE, WBE and DVBEs. Each facility should maintain records, taken from each consultant's or contractor's Self-Certification Form and the Report of Subcontractor Information forms provided by each contractor immediately after award, containing at a minimum:

• Total dollars awarded to all construction contractors.
• Dollars awarded, by category, to SBE, DBE, WBE, and DVBE contractors and subcontractors.
• Dollar awards expressed as a percentage of the total for each business category.

PCC 10506.4 et seq. in effect January 1, 2012, authorizes a program for the Regents of the University of California for projects over one million dollars ($1,000,000) and allows an award to the lowest responsible bidder selected on the basis of the “Best Value” to the University, as defined in Section 10506.5. To implement this method of selection, the Regents of the University of California has adopted and published the following procedures and required guidelines for evaluating the qualifications of the bidders that ensure that Best Value contractor selections by each Facility are conducted in a fair and impartial manner. These procedures and guidelines conform to the requirements of Sections 10506.6 and 10506.7 and shall be mandatory for all campuses of the university when using best value selection. These Procedures and Required Guidelines are applicable to Bidder Qualification only.  For guidance on all other facets of the Best Value Program, consult the Best Value Best Practices, and consult with members of UCOP, should you have any questions or concerns.

All bidders shall be pre-qualified for the subject project.  Each pre-qualified bidder must submit a Best Value Evaluation Questionnaire, with supporting documentation, verified under penalty of perjury. The bidders shall be evaluated on the five (5) criteria by each member of the Evaluation Committee and on no others to determine their Qualification Points.

The total bid price (Bid$) is divided by the bidder’s average Qualification Points (QP) resulting in a unit of measurement indicating dollars per quality point ($/QP).

Formula: Bid$ /QP = $/QP, also known as the Best Value Score (BVS). The bidder with the lowest BVS is the apparent lowest responsible bidder.

The BVS for each bidder shall be calculated based on the total bid price, including alternates. The maximum qualifications points for any bidder shall be 1000 points.  Each campus, as appropriate for the project, shall determine how the total available points should be distributed among the five categories for each bidder evaluated. However, no category shall be assigned less than 150 points without prior approval from UCOP. 

The Best Value selection method can be used for any project with a construction cost over $1,000,000. It does not change the bidding processes in any respect other than those addressed in these Guidelines. This is not a project delivery method. Best Value is an evaluation process of contractors’ bids that allows consideration of price and five specific bidder qualification criteria in determining which bid offers the best value to the University. The process compares strengths, weaknesses, risks, performance, and price of each bid in accordance with published bidder qualification selection criteria.

When developing the evaluation criteria, in addition to price, bidder qualification factors must include:

1. Demonstrated management competency,
2. Financial condition,
3. Labor compliance,
4. Relevant experience and
5. Safety record.

The criteria must always reflect the requirements of the specific project and shall never be utilized to unfairly disadvantage any prospective bidder. All the allowable bidder qualification criteria identified above must be published in the Best Value Questionnaire and all available point totals and all sub criteria within the five criteria above must be approved in advance by UCOP.  The use of the Best Value procedures authorized below is contingent upon conformance with the statutory authority of the PCC and the specific requirements of these Procedures and Required Guidelines. No modifications to the requirements herein may be made without the prior written concurrence of UCOP.

All documents listed below can be found on the FM Best Value page. For every project using the Best Value selection method, the campus shall submit the following to UCOP, Design and Construction Services, for approval:

Prior to Advertising:

1. Proposed Evaluation Committee Roster including job title, a very brief description of duties and professional affiliation.
2. Best Value Questionnaire with the points allocated to each major category as relevant to the project. The template should be modified to meet the specific needs of the Project.
3. List of pre-qualified contractors with criteria used for Prequalification.

After Bid opening and Evaluation Committee Results:

1. Evaluation Committee Roster.
2. Summary Analysis of all bidders identifying lowest responsible bidder on the Best Value Score Analysis (showing the total qualifications score for each bidder along with its bid price and the calculated Best Value Score).
3. Summary of all campus Best Value results to date on the Best Value Campus Summary.

Every Facility shall keep a permanent record of all Best Value projects, including all completed copies of the Best Value Score Analysis together with the Questionnaire Scorecard, and shall make the records available to UCOP upon request. Every campus shall maintain an updated record of all Best Value projects on the Best Value Campus Summary form. This updated form shall accompany the Best Value Rating Analysis when submitted to UCOP for approval.

The bidding documents are prepared by the design professional and the Facility during a project's construction documents phase and are assembled by the Facility.

The University uses many types of construction documents. The construction bidding documents are part of the overall construction documents. All construction document models contained in Volume 4: Construction Contracting, have been approved by the UCL.

Facilities are responsible for reviewing their own bidding documents, regardless of the estimated construction cost. However, proposed changes to the Instructions to Bidders and the General Conditions must be reviewed by UCOP and the UCL. Detailed review procedures are given in Volume 4: Construction Contracting.

Before bids can be solicited, basic conditions required by University policies, delegations of authority, and federal and state regulations must be met. These conditions apply to competitive and informal bidding and negotiated contracting (see RD - Permission to Solicit Bids).

Before soliciting bids for any construction contract, the Facility Designated Administrator must ensure that all the following conditions are met:

1. The commitment of funds, the scope of construction, and equipment to be acquired conform to the project scope and cost itemization in the current approved Project Planning Guide or conform to the project description in the case of minor capital improvement projects.
2. The bidding documents conform to requirements in the Facilities Manual, or modifications to the documents are approved by UCL and UCOP.
3. For state-funded projects, the bidding documents have been approved by the Department of Finance and State Public Works Board, as applicable.
4. Funds are available.
5. The project complies with the most recent version of the "Amended University of California Procedures for Implementation of the California Environmental Quality Act."
6. The documents conform to the fire and life safety requirements of the California Building Standard Code.
7. Independent certification is made that the design meets or exceeds energy regulations and standards. 
8. The project complies with the provisions of the California Coastal Act of 1976, if appropriate.
9. The design conforms with the University's seismic safety policy.
10. Procedures for providing access for all are followed (see Code Compliance and Administration).
11. Drawings and specifications for licensed hospital facilities are approved and stamped by the Department of Health Care Access and Information (HCAI). HCAI approves documents for the design and details of architectural, structural, mechanical, and electrical systems.
12. Drawings and Specifications for state-funded non-hospital-related projects are approved and stamped by the Division of the State Architect for access requirements.
13. State review of any required environmental document has been completed.

See Small MS4 Statewide General Permit, Order No. 2013-0010DWQ; RD –  Permission to Solicit Bids; University policy: "Equal Opportunity in University Business Contracting;” and Code compliance in regard to project design and construction.

Before bids are solicited, the Facility accounting officer must certify that project funds are available in the plant account approved for the project. Signature for certification of fund availability is included on the Pre-Bid Capital Improvement Budget. The source and amount of funds must match the most recently approved Capital Improvement Budget (CIB) for the project. The approval authority for CIBs depends on the fund source and size of the project. Contact UCOP to determine authority.

For state-funded projects, funds are frequently transferred from the state to the University in increments. For such projects, formal action by the State Department of Finance to "release" funds to the University and authorize proceeding with work is sufficient basis for signifying availability of funds.

Most non-state-funded projects must have funds physically transferred into the plant account to proceed with solicitation of bids. Exceptions are discussed below.

For externally financed projects, the Chief Investment Officer's Office must notify the Facility that funds are available. Regents' approval of external financing is not sufficient, as it does not mean that funds are immediately available. Gift pledges (not yet-in-hand) are not an appropriate source of funds for the purposes of bid solicitation. Prior to solicitation of bids for a project with outstanding pledges, the following must occur: 

1. The Regents have approved authorization for a standby loan and the Chief Investment Officer's Office has notified the Facility that funds are available, or
2. A cash advance from another lawfully available source is temporarily transferred into the plant account and reimbursed as gifts are received.

Some federally funded projects require that bidding documents be reviewed by the appropriate federal agency for permission to advertise for bid. Refer to the agency agreement for the specific requirements.

Capital projects funded by State capital appropriations require the submittal to UCOP of the final, 100% complete bid documents package with all signatures and approvals by the designated Campus Fire Marshall or Division of the State Architect/Access Compliance. The project, as detailed by the documents, must be within the approved scope, budget, and schedule. The Facility submits the completed bid document package, including drawings and specifications, with supporting documentation that includes an explanatory cover letter, project description, project Capital Improvement budget, detailed cost estimate, component cost summary, area reconciliation, project schedule, and record of final EIR action (if pertinent) to UCOP for review and processing. Any bid alternates must be explicitly identified; alternates may not be bid without approval of the individual alternates by the State Department of Finance (DOF) or State Public Works Board (SPWB) (if the project is funded with lease-revenue bonds), or UCOP (streamlined projects). The project may be put out to bid upon the availability of funds (construction funds are "committed" by legislative authority at the time of bid, but are released by the state only upon approval to award a contract). See Conditions Prerequisite to Bidding  for a list of other constraints. If the lowest responsive and responsible bid is within budget, the construction contract may be awarded. Contact Capital Planning at UCOP for more detailed and updated information regarding submittal documentation and process, or for clarification as necessary.

Capital construction and capital equipment purchases for projects funded with State lease-revenue bonds (in which the State owns the facility and leases it to the University) require steps in addition to those outlined in State-Funded Projects above. Prior to approval of Preliminary Plans, the Facility must first prepare and transmit to UCOP a legal description and site survey, and these must be approved by SPWB. Bidding may occur prior to when Lease Revenue Bonds (LRBs) are sold, but the award can only occur after a successful LRB sale. Prior to obtaining approval of the bid document package submittal, a proposed site lease, facility lease, and equipment lease (if applicable), are prepared by SPWB and its bond counsel, but only after a bond sale is initiated; Regents authorization must be submitted to the SPWB for approval. Regents item requesting authorization to prepare and execute the leases and agreements must be approved prior to awarding a contract.

UCOP coordinates and submits the necessary documents, in parallel with the bid document package submittal, to SPWB for review and action. The bid document package for a lease-revenue bond-funded project must be approved by the DOF. At the conclusion of the bidding phase, the Facility reports the bid results and the apparent low responsible bidder to UCOP for transmittal to the DOF with a request for approval and authorization to award the contract (see State-Funded Projects). Upon receipt of this authorization and notification that bond proceeds are available, the contract can be awarded and work can proceed.

The bid document package as submitted to, and approved by the State, must be the same as the bidding documents issued and must become part of the Facility's project file (see Project Records).

On projects funded in whole or in part by the federal government, the rules of the funding agency must be reviewed for competitive bidding and public advertising requirements. Normally, federal agencies require competitive bidding with public advertising only on projects with estimated construction costs exceeding $10,000. If federal requirements are more restrictive than University policy, the more restrictive requirements must be followed.If the funding agency requires an affirmative action program as a condition for funding, then an affirmative action program that is in compliance with the funding agency's requirements must be included in the bidding documents and the contract documents.

If the project is funded in whole or in part through the American Recovery and Reinvestment Act of 2009 (ARRA), see following guidelines for compliance:

For all grant-funded construction projects, whether new construction, renovation, maintenance, repair or upgrade, the terms of the grant may add compliance requirements different from those of the University's "typical" project.  Federal grants funded as part of ARRA (the American Recovery and Reinvestment Act of 2009) entail a separate set of compliance requirements, some of which vary depending on the funding agency (NIH, DOE, NSF, etc.).

While many ARRA-funded University projects have now been completed, some are still in process and others have not yet gone out to bid.  The purpose of these guidelines is to suggest those requirements of ARRA that might otherwise be overlooked so that University staff can determine their applicability to specific projects, obtain more detailed guidance and comply fully with all requirements.

All requirements flow down from the grant recipient to its contractors and subcontractors (collectively "vendors") who receive more than $25,000 in ARRA funds.  Longer record retention may be required. Highlights of key requirements of ARRA include (not an exhaustive list):

• Reporting. Quarterly reporting of specific data elements is required on the use of all funds received, including the number of jobs created and/or saved.
• CCR Registration. The University and its vendors (its contractors and subcontractors) must all register in the CCR (Central Contractor Registration) database at https://sam.gov/.  Each entity needs a DUNS number to register.
• Buy American. Unless an exemption applies, the project must use American iron, steel and manufactured goods.
• Davis-Bacon Wage Rates. The Davis-Bacon Act requires that workers not be paid less than the applicable wage determination, which may be found at https://sam.gov/.  (If California prevailing wage is higher, the higher wage must  be paid.) Certified payrolls must be checked for compliance and records must be retained as required. (LCPtracker or similar software can be helpful.)
• Segregated Accounting. ARRA funds must be tracked, accounted for and reported separately from all other project funds.
• Waste, Fraud and Abuse. The University and its vendors have an affirmative duty to report false claims and other misconduct.
• Whistleblower Protection. The protection extends to employees of the University and its vendors.
• Public Information. Information about the use of funds will be posted at https://www.ed.gov/ based on submitted reports.

Information about ARRA requirements must be included in advertisements for bids, bid packages and contract documents.  Specific information must be posted at the job site. Failure to comply with the requirements can result in loss of funds. The laws and regulations encompassed by ARRA are complex. Specific guidance should be obtained from the campus-sponsored projects or contracts and grants office, in consultation with the principal investigator of the project and the contract and grants officer with whom he or she has been working.

The University requires the payment of prevailing wage on certain construction and maintenance contracts (see Wage Guidelines and Statutory Requirements). For all project delivery methods except CM at Risk, the prevailing wage determination date for the Project is the first date of Project advertisement for bid. In a CM at Risk contract, there are two dates at which the prevailing wage may be set. If there are subcontractor bid packages (including Design Build subcontractors) or any site or construction work in the initial bid advertisement for the CM/Contractor, the determination date for prevailing wage for the entire Project is that of the initial advertisement. If there are no subcontractor bid packages or site or construction work in the initial bid advertisement for CM/Contractor, the determination date for prevailing wage for the entire Project is that of the first subcontractor trade package advertisement.

This chapter sets forth University policy regarding bidder "responsibility" and addresses the four methods of determining responsibility:

1. Standard bidding document requirements
2. Prequalification
3. Qualification
4. Disqualification

The term "responsible," as applied to bidders, has its origin in PCC 10500-10506, and in University policy. The code and policy both require that contracts "be awarded to the lowest responsible bidder" (see Competitive Bidding). A "responsible" bidder is one who is able to satisfactorily perform the work. A contract does not have to be awarded to the lowest bidder if that bidder is not responsible, as determined by the University.

The bid, itself, must also be "responsive"; that is, the form and content of the bid must meet the requirements of the bidding documents (see Responsive and Nonresponsive Bids). A contract does not have to be awarded to the lowest bidder, if that bidder's bid is nonresponsive. University procedure is to use 

1. Standard bidding document requirements

2. Prequalification

3. Qualification, or 

4. Disqualification to determine the responsibility of a contractor or subcontractor or their intention to bid on University construction contracts.

The application of standard, predetermined responsibility requirements in the bidding documents is the most frequently used method of determining bidder "responsibility." If bidders cannot meet these requirements, they should not submit a bid. Any submitted bid not meeting these responsibility requirements is declared nonresponsive. The University's construction documents contain the following predetermined responsibility requirements:

1. State of California Contractor's License demonstrates minimum knowledge and experience to perform the work.
2. Bonds verify financial capacity.
3. Insurance shows that an insurance company is willing to assume certain contractor risks.

Prequalification may be used with any contracting mode and is usually used when the Facility wants required project work to be performed by a contractor who has successfully completed similar work. For example, the Facility may determine that to successfully complete a project, the contractor needs five years' experience with specific types of equipment and supervisory expertise in handling toxic waste. The prequalification process will lengthen the bidding period unless prequalification is concluded before the scheduled bidding period.

When using prequalification, adhere to the following guidelines:

1. Contractors may be prequalified, at the Facility's discretion, to bid on projects of any value.
2. Use the procedures to prequalify contractors.
3. Subcontractors may be prequalified, using the procedures, on those projects where the experience and performance of subcontractors is determined by the Facility to be critically important to the work.
4. Contractors or subcontractors may be prequalified for bidding on a predetermined value of multiple projects.

1. Use the Advertisement for Contractor Prequalification to specify the trade for which prequalification information is requested. This sample advertisement was developed to be compatible with competitive bidding by including at least the following: 

   • A statement that bidders must be prequalified.
   • A brief description of the work; specifically, the contract type, project type, project size, estimated cost of the work, and major characteristics of construction.
   • Where and when the Prequalification Questionnaire can be obtained.
   • Where and when the Prequalification Questionnaire is to be submitted.
2. Facilities may modify the Instructions to Bidders to address prequalified contractors by adding an article in the Supplementary Instructions to Bidders.
3. Use the sample Prequalification Questionnaire (available at the UCOP Approved Contract Templates page) to develop a specific questionnaire for the project.  Questionnaires may be developed to be evaluated in either of two methods:

• POINT SYSTEM: The questionnaire can be used to evaluate the potential Bidder on a point system. The Prequalification Questionnaire and its corresponding Prequalification Evaluation are structured so the bidder must score a predetermined point total and meet minimum standards for questions within different topics. The points to award, minimum standards, and the number of points needed to prequalify are determined by the Facility.
• PASS/FAIL: The questionnaire can be used to evaluate the potential Bidder on a pass/fail system. The Prequalification Questionnaire and its corresponding Prequalification Evaluation are structured so the bidder must meet minimum standards determined by the Facility. See Comparison of Prequalification Systems:

4. Further develop the Prequalification Questionnaire to be compatible with competitive bidding by including standards so the questionnaire:

• Relates reasonably to the performance of the work required by the bidding documents.
• Evidences a prospective bidder's ability to satisfactorily perform the work.
• Is objective.
• Applies uniformly to all prospective bidders.
• Is based on past performance.

5. Consider the Topics for Prequalification Questionnaire. These topics are based on a contractor's past performance. Questions within the sample Prequalification Questionnaires in the Resource Directory are examples; topics and questions that are added must be structured so they can be objectively evaluated.

6. If the Prequalification Questionnaire requests information that may be proprietary (such as financials or business methods), add the section number of such information to the list of those responses that will be considered “official information” if marked “confidential”. Should the Facility receive a request under the California Public Records Act (PRA) that may encompass the prequalification process, please contact the UCL or your Facility PRA representative for guidance.

7. Provide in the Prequalification Questionnaire an informal appeal process and hearing process at the Facility level for those prospective bidders who are found to be not prequalified and who object to that determination.

8. Use the sample Prequalification Evaluation, Point System or Pass/Fail, to develop a specific Prequalification Evaluation for the project. These alternate versions correspond to the Prequalification Questionnaires (see procedure 3, above). The Prequalification Evaluation, an internal document not issued to prospective qualifiers, is used to determine the prequalification status of contractors. Specific Prequalification Evaluation items must correspond to specific Prequalification Questionnaire items.

9. Publicly advertise the Advertisement for Contractor Prequalification.

10. Make the Prequalification Questionnaire available to contractors.

11. Receive Prequalification Questionnaires from contractors no later than a specified time and date, at a designated location, in the same manner used for accepting bids. Allow a minimum of 15 days from the date of issuance for contractors to return completed Prequalification Questionnaires.

12. Select an appropriate prequalification committee to rate each contractor using the process described in the Prequalification Evaluation document.

13. Notify contractors of their status:  either prequalified, or not eligible to submit a bid for the project.

14. Resolve any appeals from contractors who are not prequalified. Conduct an informal hearing to allow the contractor to explain the reasons for the appeal. The Facility's decision on the appeal is final. Contractors or subcontractors cannot file a written appeal of the Facility's determination to the Construction Review Board.

15. Make bidding documents available to prequalified contractors. Issue the Announcement to Prequalified Bidders with the bidding documents. On the announcement, list the names of prequalified contractors eligible to submit bids.

16. Take bids from prequalified contractors.

17. Award the contract to the lowest bidder whose bid is responsive (see Responsibility: Origin and Policy).

UCOP is available to provide assistance in preparing the Advertisement For Bids From Prequalified Contractors, the Prequalification Questionnaire, the Prequalification Evaluation and the Announcement to Prequalified Bidders.

1. Follow the contractor prequalification procedures.
2. State in both the Subcontractor Prequalification Questionnaire and the contractor's bidding documents that contractors may use bids only from those subcontractors who have been prequalified by the Facility for specific portions of the work.
3. Provide a list of prequalified subcontractors in the bidding documents.

Bidder qualification is another method of determining bidder "responsibility" (see  Responsibility: Origin and Policy) in a limited way by setting forth certain qualification requirements at the time of bid. This method may be used when bidder requirements are not extensive, and time is not available to prequalify bidders. The qualification method may involve, for example:

• Documents for the design-and-build contracting mode that stipulate limited qualification requirements.
• Lump-sum or cost-plus-fee contracts that require certain contractor experience or expertise. Bidders are informed that they must be able to prove they meet the stipulated requirements.

1. Use the qualification method when bidder requirements are not extensive and time is not available to prequalify bidders (see Prequalification).
2. Use the qualification method to determine responsibility either before bids are accepted or after bids are opened.
3. Use the procedures in for qualification.
4. Note that the use of the qualification method may add time to the bid review process.

1. Modify the Advertisement for Bids to inform bidders that they must meet certain qualifications set forth in the Supplementary Instructions to Bidders to be allowed to bid or to be eligible for award. 
2. Add an article to the Supplementary Instructions to Bidders stating all qualification standards the bidder must meet to be qualified to perform the work. Qualification standards should not be made too complicated and should not be so rigid that no one is able to bid on the project. Qualification standards may include one or more of the following: 
   • Experience with similar work
   • Financial ability to complete the work
   • Safety record
   • References on completed projects
3. List the forms the bidder is required to complete in the Bid Form, Article 11, "Required Completed Attachments". The completed forms will demonstrate to the Facility whether the bidder meets the required qualification standards. Use applicable portions of the Contractor's Statement of Experience and Financial Condition.
4. Advertise publicly for bids using the modified Advertisement for Bids.
5. Continue the qualification process using Method A, B, or C below. 
   1. Method A: Qualification Determined Before Bids Are Submitted: 
      1. Have prospective bidders submit qualification documents in a sealed envelope at the place and time stipulated in the Advertisement for Bids.
      2. Receive qualification documents.
      3. Evaluate qualification documents.
      4. Notify bidders of their qualification status.
      5. Receive bids from qualified bidders at the place and time stipulated in the Advertisement for Bids.
      6. Formally open bids.
   2. Method B:  Qualification Determined When Bids Are Submitted: 
      1. Have bidders submit qualification documents in a sealed envelope clearly labeled, "Qualification Documents," at the place and time stipulated in the Advertisement for Bids.
      2. Have bidders submit bids in a separate sealed envelope clearly labeled, "Sealed Bid for [Project Name and Number]."
      3. Accept qualification packets and sealed bid packets concurrently, at the place and time stipulated in the Advertisement for Bids.
      4. Open and evaluate qualification documents.
      5. Notify bidders of whether they have qualified and whether their bid will be opened.
      6. Do not open bids of bidders not qualified. Return unopened bids to bidders.
      7. Formally open bids of qualified bidders at the place and time stipulated in the Advertisement for Bids.
   3. Method C: Qualification Determined When Bids Are Evaluated: 
      1. Have bidders submit qualification documents along with (as an attachment to) the Bid Form.
      2. Formally open bids at the place and time stipulated in the Advertisement for Bids.
      3. Announce the (apparent) lowest bidder subject to evaluation of all completed attachments.
      4. Evaluate qualification documents.
      5. Notify bidders of their evaluation status and the final determination of who is the apparent lowest responsible bidder.

Disqualification is another method of determining bidder "responsibility" (see Responsibility: Origin and Policy). Disqualification may prohibit a contractor from bidding on University projects for a set period of time, whereas prequalification and qualification evaluate contractors for bidding on a specific project or on a predetermined value of multiple projects. A list of contractors that have been debarred and are not eligible to bid on public works projects as a result of violations of Labor Code provisions governing prevailing wage and apprenticeship is available on the DIR website. The Facility can check this list to verify if a potential bidder is eligible. Inevitably, there will be some defective work, schedule overruns, and disputes about guarantee work on almost all projects. Before a bidder can be disqualified, however, the Facility must establish, in an objective manner, that the bidder's past performance was materially deficient in the area used as the basis for disqualification. Use the guidelines in Disqualification Guidelines and procedures in Disqualification Procedures to establish an objective basis for disqualification.

1. A contractor or subcontractor who has demonstrated performance that is not responsible on current or past University projects may be disqualified, by the Facility, from bidding on current or future University work for a period of three years.
2. The period of disqualification shall be for an indefinite period for a contractor or subcontractor who has demonstrated performance that is not responsible by falsifying any information required during prequalification, qualification, or bidding, or required by the contract documents.

1. Determine whether a contractor or subcontractor has demonstrated performance that is not responsible. The following are considered examples of performance that is not responsible and that may lead to disqualification:
   1. Falsification of any information required during prequalification, qualification, or bidding, or required by the contract documents.
   2. Performance of work without the required contractor's license.
   3. Non-observance of safety requirements.
   4. Failure to meet requirements of law in employment.
   5. Failure to meet contractually agreed-to affirmative action commitments.
   6. Use of unlicensed or improperly licensed subcontractors.
   7. Substitution of a subcontractor without the University's written consent.
   8. Failure to submit or adhere to contractually required and agreed-upon schedules.
   9. Conviction of a criminal offense in connection with current or past contracts with any entity.
   10. Poor past performance of work on University projects as evidenced by continued use of defective materials, refusal to correct work not in accordance with the contract documents, termination for cause, or repeated failure to provide proper supervision required by the contract documents.
2. Use the Notice of Disqualification (see RD) to notify the contractor or subcontractor of disqualification from bidding University work at any Facility. In the notice, list all specific examples from procedure 1, above, that serve as the basis for the determination that contractor or subcontractor performance is not responsible. Send the notice by a means that provides proof of receipt.
3. Resolve appeals. Contractors or subcontractors may file a written appeal of the Facility determination that their performance is not responsible to the Chair, Construction Review Board, with concurrent copy to the responsible Facility administrator where the original decision was made, within 10 calendar days from their receipt of the Notice of Disqualification. If written objections are received during that time period, a hearing must be established for contractors or subcontractors to demonstrate that their performance is responsible.
4. Conduct hearings. The Chair, Construction Review Board, will appoint a hearing officer to preside over the hearing in the manner detailed in the Sample Letter: Hearing on Disqualification. This letter must be sent by the hearing officer to the contractor or subcontractor, to establish a hearing, at least five calendar days before the scheduled hearing date. The decision of the hearing officer is final and not appealable within the University.

Bids may be solicited only after the conditions prerequisite to bidding have been met (see Preparing to Solicit Bids). This chapter sets forth the general procedures for soliciting of bids. Requirements for formal vs. informal competitive bidding are discussed in Competitive Bidding and Negotiated Contracting.  

The general procedures for soliciting of formal competitive bids are outlined below (see RD - Permission to Solicit Bids).

Advertisement for Bids. The Advertisement for Bids provides public notice to contractors, subcontractors, and members of the general public about the project. The requirements of the Advertisement for Bids are established by PCC 10502 and by University policy. For approved language, see contract documents in Volume 4: Construction Contracting of the FM. Detailed advertising requirements are provided in Methods of Contractor Selection Competitive Bidding.

Bid Deadline. Bid Deadline means the date and time designated in the Advertisement for Bids as the last date and time for receipt of bids. The Bid Deadline may be revised by addenda.

Bidders may obtain complete sets of the bidding documents from the issuing office designated in the Advertisement for Bids. 

The Instructions to Bidders informs bidders that they must attend a pre-bid conference, in its entirety, to familiarize themselves with contract requirements. Bidders are required to sign an attendance list which is used to determine if bidders have met the attendance requirement. A project site visit (or job-walk) is also a part of the pre-bid conference. At the conference:

• Discuss the contract documents and highlight major requirements.
• When necessary, review major or unusual conditions of the contract documents.
• Require the bidders to visit the project site with the University's Representative (the person or firm identified in the Agreement).
• Explain the University's Policy to Ensure Equal Opportunity in University Business Contracting. 

A bid submitted by a contractor failing to meet the pre-bid conference attendance requirement is considered non responsive (see Responsibility: Origin and Policy), and must be refused or returned unopened to bidder. If questions that require interpretation by the University's Representative arise at the pre-bid conference, prepare and issue an addendum clarifying the issues (see Addenda).

A bidder may modify or withdraw a submitted competitive bid before the bid deadline by giving notice to the office receiving bids, at the place designated for receipt of bids. The notice may be made by any of the methods required for correspondence set forth in the Instructions to Bidders. A change must be worded so the amount of the original bid is not revealed. A withdrawn bid may be resubmitted up to the bid deadline, provided the resubmitted bid conforms with the bidding requirements.

Facility will conduct the bid opening and evaluation of alternates in accordance with a procedure that either:

1. Prescribes, prior to the time of Bid opening, the order in which Alternates will be selected; OR
2. Prevents, before the determination of the apparent low Bidder has been made, information that would identify which Bid belongs to which Bidder from being revealed to the representative of the University selecting the Alternates to be used in determining the low Bidder.

If Facility elects option #1, the Facility may reveal identities of the Bidders at the Bid Opening. However, the Facility must prepare the selection procedure prior to Bid Opening and shall place a copy of the procedure in the project files. 

If Facility elects option #2, the Facility may NOT reveal which Bid belongs to which Bidder until the representative of the University selects the Alternates to be used in determining the low Bidder. The Facility will publicly disclose the identity of each Bidder that submitted a Bid and the amount of each Bid after the determination of the apparent low Bidder has been made. An acceptable process would be to have a contracts administrator open all bids and record pricing information on a summary sheet identifying the bidders by letter e.g. “Bidder A”, “Bidder B”, etc. This summary sheet would be provided to the representative of the University making the decision concerning alternates to be accepted.

Detailed solicitation requirements are provided in Methods of Contractor Selection. When informal bidding is used, the Facility must preclude favoritism in the bidding process. A list of proposed projects and their bidding times should be available for all interested contractors, and various contractor organizations should be notified of this list. All solicitations for informal bidding must take into account the University Policy to Ensure Equal Opportunity in Business Contracting. Routinely solicit bids from small disadvantaged, women, and disabled veteran business enterprises.

A bidder may withdraw a submitted informal bid before the bid deadline by giving notice to the office receiving bids, in the method designated.

Addenda. are written text and drawings, if required, that modify or interpret the bidding documents including the Drawings and Specifications issued prior to the bid deadline. Addenda are issued after the bidding documents have been issued to bidders, before the contract is awarded. Response to questions raised at the pre-bid conference or at another time during the bidding period may require the issuance of addenda.

Planholders. A planholder is any person or entity who is known by the Facility to have received a complete set of bidding documents and who has provided a address for receipt of any written pre-bid communications (e.g. addenda).

Issuing Addenda. Addenda are prepared by the University's Representative and the Facility. Only the Facility office that issued the bidding documents may issue addenda. Addenda are sent to planholders by a means that provides a proof of receipt. In the case of informal bidding, addenda are sent to those who have been sent a Request for Bid.

Issue addenda so they are received by all Planholders at approximately the same time and are received no later than three business days prior to the bid deadline. An Addendum to change the bid deadline to a later date or to withdraw the solicitation of bids may be sent at any time before the bid deadline.

After bids are solicited, they are received and opened by the Facility. This chapter sets forth requirements for the receipt and opening of formal and informal competitive bids.

According to the Instructions to Bidders, the term "Bid Deadline" means the date and time designated in the Advertisement for Bids as the last date and time for receipt of bids, as may be revised by addenda.

Bidders must follow bid submittal requirements set forth in the Advertisement for Bids and the Instructions to Bidders. The Facility receiving bids must enforce those requirements by complying with the standard procedures that follow.

Time. The Advertisement for Bids states that bids will not be received after a certain time (the Bid Deadline).

Place. The place for receiving bids is set forth in the Advertisement for Bids and the Supplementary Instructions to Bidders. Receive bids at no other place.

Sealed Bids. The Advertisement for Bids requires sealed bids and describes the format for bid submittal.

Manner of Submission. Oral, telephone, electronic mail (e-mail), or facsimile Bids are invalid and will not be accepted.

Use the standard procedures below for receiving competitive bids. These procedures have been developed to provide uniformity among the various Facilities and to ensure that bids are properly received.

1. Preparation. Before receiving bids, have the following items available:
   1. Optional:  Bid-Management Software that allows for electronic sealing and unsealing of bids
   2. Bid tabulation form
   3. Time and date stamp
   4. Set of these procedures
2. Time. Do not receive, open, or accept bids after the Bid Deadline. Enter the bidder's name, the time of the attempted submittal, and the words "Refused-Not timely submitted" on the bid tabulation form.
3. Place. Receive bids only at the place or in the method designated for the receipt of bids.
4. Sealed Bids. Bids must be sealed in an envelope properly addressed and endorsed or through a Bid-Management Software System. Do not accept bids that are not sealed. Note on the bid tabulation form if a bid is improperly addressed or endorsed.
5. Date and Time Stamp. Date and time stamp bids as they are received. If the stamp does not include the time, write the time next to the date stamp. Place the stamp on the outside of the sealed envelope. If envelope is too bulky to accept date and time stamp, stamp a separate slip of paper and staple it to corner of envelope. If time permits, enter the bidder's name and the time the bid is received on the bid tabulation form. Do not open the bids; accumulate them in one pile. Assemble the bids in alphabetical order.
6. Announcement. After the Bid Deadline has passed, announce its passing and that no further bids will be received. Also announce when and where bids will be opened. Make sure all the bidders names and bid receipt times are entered on the bid tabulation form. Gather the accumulated bids, check them with the bid tabulation form, and take them to the place of the bid opening.

Competitive bids may not be modified, withdrawn, or canceled after the Bid Deadline unless the University consents to this action. Consent may be made during a period of 60 days or other period stipulated in the bidding documents if the bid contains an excusable mistake, and the following conditions are met:

1. Written notice of the mistake, specifying in detail how the mistake occurred, is received within five working days after the opening of bids.
2. The mistake makes the bid materially different from what the bidder intended it to be.
3. The mistake was made in filling out the bid and is not due to an error in judgment, carelessness in inspecting the site of the work, or carelessness in reading the Drawings or Specifications.

If a bidder asks to withdraw a bid, immediately ask to examine the bidder's documentation to determine the nature of the mistake, how it occurred, and the dollar amount involved. If this documentation substantiates the bidder's claim, summarize the findings in writing and send copies to UCL. If there is a question as to the legitimacy of the claim, refer the information to UCL to confirm that the legal conditions for consenting to the withdrawal of the bid have been met. If the bidder's request is informal, request it be immediately confirmed in writing and that the written notice specify in detail how the mistake occurred. Evaluation of the bidder's supporting documentation and, if necessary, referral to UCL should be accomplished promptly. See University policy: "Irrevocable Bids."

A public bid opening conducted by the Facility is one the fundamentals of the competitive bidding process. The bid opening process starts after the receipt of bids and concludes when the bids are collected for further evaluation.

Time and Place. The Facility states the bid opening time and place in the Advertisement for Bids and Supplementary Instructions to Bidders.

Before opening competitive bids, make certain the place designated for the bid opening is ready and available. The place should be furnished with seats or chairs for the bidders, and tables and chairs for the persons opening and recording the bids. To encourage uniformity among the various Facilities, and to ensure that bids are properly opened, the University has developed the basic procedures below for opening competitive bids. Other procedures may be added. The person opening bids must be familiar with the bid opening procedures and must ensure that they are accurately followed.

Bid Form Check-Off List. Use the Bid Form Check-Off List Competitive Bidding while performing the bid opening. This list is intended to help verify that all items and information required by the Bid Form accompany each bid. The required items are listed on the check-off list as they appear in the Bid Form.

Procedures at Bid Opening. The following procedures start when bids have been received, and the bidders have assembled in the place designated for opening bids:

1. Announce that the Bid Deadline has passed, that the opening time has arrived, and that bids will be opened.
2. Review the bid opening procedures with the bidders.
3. Arrange the bids for opening I.
4. Open the bid II.
5. Have an assistant record the required information on a bid tabulation form III.
6. Note the presence of required items.
7. Note any irregularities, if deemed appropriate.
8. Note any missing items, if deemed appropriate.
9. Repeat above steps 4-8 until all bids have been opened, and all information is recorded on the bid tabulation. Announce apparent lowest bidder IV.
10. Post the bid tabulation in a location accessible to all bidders V.
11. Make the bids available for inspection and remain present while the bids are being inspected VI.
12. Note any bidder concerns for later resolution. Inform the protestors that a formal protest must be filed in writing within three business days. Specify the latest time for receipt of protests (i.e. 5 pm on third business day after bid opening VII).
13. Ask the bidders if they have any questions on the bid opening procedure.
14. Announce that the bid opening procedure is completed, thank the bidders for submitting their bids, and state the bids will be taken under advisement.

If bids include Alternates and Facility elects to use "blind" bids (see Establishment of Procedure for Selection of Alternates), the following footnotes apply:

I The order used to open bids shall not identify bidders. Do NOT arrange in alphabetical order. Instead, arrange bids in a random order (e.g. order of receipt).
II Do NOT read aloud the actual names of the bidders. Instead, assign a letter such as “Bidder A”, “Bidder B”, etc. 
III The bid tabulation excludes the actual names (and other identifying information) of the bidders.
IV Do NOT announce the apparent lowest bidder. The apparent lowest bidder will be determined after the Alternates are selected by the representative of the University selecting the Alternates to be used in determining the apparent lowest Bidder (see Establishment of Procedure for Selection of Alternates).
V It will be necessary to revise and re-post the bid tabulation (sometime after step 14) to identify the actual names of the bidders after the representative of the University has selected the Alternates to be used in determining the apparent lowest Bidder.
VI The representative of the University selecting the Alternates to be used in determining the apparent lowest Bidder may not inspect the bids and should normally not be present during bid opening.
VII The protest period generally ends on the 3rd business day after the date of posting in a public place of bid results that identify the actual names of the bidders.

The Informal Form bidding documents are typically used when informal bidding is deemed appropriate although another contract type may be used instead (see Bidding Documents for more detail). Bidders must follow the submittal requirements set forth in the Request for Bids. The Facility receiving bids must enforce those requirements outlined below.

Time. The Request for Bids states that bids are to be submitted on or before a certain time (the Bid Deadline).

Place. The place and method for receiving bids is also set forth in the Request for Bids.

Bid Type. Sealed bids are not required for informal bidding.

Use the standard procedures below for receiving informal bids. These procedures have been developed to promote uniformity among the various Facilities and to ensure that bids are properly received.

1. Preparation. Before receiving bids, have the following items available:

• Optional: Bid-Management Software that allows for electronic sealing and unsealing of bids and bid tabulation form
• Time and date stamp
• Set of these procedures

2. Time. Do not receive, open, or accept bids after the Bid Deadline. Enter the bidder's name, the time of the submittal, and the words "Refused-not timely submitted" on the bid tabulation form.
3. Place. Receive bids only at the place and in the method designated for the receipt of bids. Make certain the place designated is available and staffed for the receipt of bids.
4. Date and Time Stamp. Date and time stamp bids as they are received. If the stamp does not include the time, write the time next to the date stamp. Place the stamp on the bid, and enter the bidder's name, the time the bid is received, and the bid delivery method on the bid tabulation form. Do not open the bids; accumulate them in one pile.
5. Gathering Bids. After the Bid Deadline has passed, gather the accumulated bids, check them with the bid tabulation form, and take them to the place of the bid opening.

Informal bids may be withdrawn prior to the Bid Deadline by the person or firm submitting the bid. After the bid results are posted, competitive bids may not be modified, withdrawn, or canceled unless the University consents to this action similar to formal competitive bidding.

Informal bidding requires specific bid opening procedures, but unlike formal competitive bidding, a public opening is not required. See Methods of Contractor Selection.

To encourage uniformity among the various Facilities, the University has developed the basic bid opening procedures below for informal bidding. Other procedures may be added. The person opening bids must be familiar with the bid opening procedures and must ensure that they are accurately followed.

Bid Form Check-Off List. Use the Bid Form Check-Off List for informal competitive bidding while performing the bid opening. This list is intended to help verify that all items and information required by the Bid Form accompany each bid. The required items are listed on the check-off list as they appear in the Bid Form.

Procedures at “informal” Bid Opening. Since the informal bid opening is not conducted in public, bid opening preparations required for formal competitive bidding are not necessary. The following procedures start when the bids have been received:

1. Record required information for each bid on a bid tabulation form.
2. Note the presence of required items.
3. Note any irregularities.
4. Note any missing items.
5. Repeat the above steps until all bids have been opened, and all information is recorded on the bid tabulation I.
6. Post the bid tabulation in a location accessible to all bidders II.
7. Make the bids available for inspection. If a bidder requests to inspect bids, remain present while the bids are being inspected.
8. Review and resolve any questions asked by the bidders.

When using Informal Competitive Bidding under PCC 10504.5 and when construction value exceeds $300,000 but does not exceed $640,000 within 3 days after award to the lowest responsible bidder Facility shall posting on its website:

1. Name of project
2. Name of the winning contractor AND
3. Amount of award

If bids include Alternates and Facility elects to use "blind bids" (see Establishment of Procedure for Selection of Alternates), the following apply:

1. The bid tabulation excludes the actual names (and other identifying information) of the bidders to the representative of the University selecting the Alternates to be used in determining the apparent lowest Bidder.

2. The representative of the University should select the Alternates to be used in determining the apparent lowest Bidder prior to posting bid results. Otherwise, it will be necessary to revise and re-post the bid tabulation to identify the actual names of the bidders.

After competitive bids have been opened and read, and informal bids have been tabulated, the Facility must review them to determine if they are "responsive" (see Responsive and Nonresponsive Bids). After all bids have been reviewed for responsiveness, the Facility determines the apparent lowest bidder. See Instructions to Bidders.

Construction contracts must be awarded to the lowest "responsible" bidder (see Responsibility: Origin and Policy). The responsibility of the bidder should be distinguished from the responsiveness of the bid: bidder responsibility relates to the bidder's ability to satisfactorily perform the work whereas responsiveness of the bid relates to the form of the bid. A responsive bid is one that materially complies with the form or content requirements of the bidding documents. Material irregularities in a bid may not be waived and make it nonresponsive (see Bid Irregularities). The Bid Form Check-Off List (Competitive and Informal) is designed to assist the Facility in determining if a bid is responsive (see Facility Procedures).

Bidder Notification. If a bid is determined to be nonresponsive, give written notice to the bidder stating that the bid is nonresponsive, with the reasons therefore, and will not be considered for award.

Examples of bid irregularities include but are not limited to the following:

• Incomplete submittals
• Unsigned bids
• Nonrequired attachments or related documents
• Qualifications made to the bid
• Stipulations made on the Bid Form
• Discrepancies
• Submittals on unauthorized forms
• Late or mishandled bids
• Claimed mistakes

The Instructions to Bidders allows the University to waive nonmaterial irregularities in a bid. Generally, nonmaterial irregularities are those that substantially comply with the bid requirements and do not affect the bid price, time, or conditions. Material irregularities in the form or content of a bid affect the bid price or time and give the bidder making the irregularity an advantage or benefit over another bidder. Material irregularities may not be waived. An unsigned bid would be a material irregularity. Refer bid irregularities to the UCL. UCL will determine if the irregularity can be waived.

Protests may result from the University's determination that a bid is nonresponsive or from a bidder's claim that another bidder's bid is nonresponsive. In either event, follow the procedures for resolving a bidder protest (see Bid Protests).

After all bids have been reviewed for responsiveness (see Responsive and Nonresponsive Bids), the Facility prepares a Bid Summary to determine the lowest bidder (see Preparing the Bid Summary). A Bid Summary is prepared for both competitive and informal bids.

The Bid Summary is used to document the determination of the lowest bidder and is used along with contract execution and award procedures. All items in the Bid Summary are tabulated from data contained in the Bid Form. Enter amounts on the Bid Summary for the "Lump-Sum Base Bid," "Unit Prices," "Compensation for Delay," and "Alternates."

As defined in the Instructions to Bidders, the term "alternate" means a proposed change in the work, as described in the bidding documents, which, if accepted, may result in a change to either the contract sum, contract time, or both. The University has the right to accept alternates in any order or combination, unless otherwise specifically provided in the bidding documents, and to determine the lowest bidder on the basis of the sum of the "Lump-Sum Base Bid," "Unit Prices," "Compensation for Delay," and "Accepted Alternates."  The procedure for considering bids with alternates is above in Establishment of Procedure for Selection of Alternates.

If the Bid Form requests separate bids for two or more portions of the work, and a combined bid for all portions, follow the award requirements stated in the Supplementary Instructions to Bidders. The Facility may have the option to award contracts for each separate bid, or the Facility may be required to award a contract to the low combined bid.

The lowest responsible bidder is determined by considering all the following:

1. Bidder responsibility (see Responsibility: Origin and Policy).
2. The sum of the "Lump-Sum Base Bid," "Unit Prices," "Compensation for Delay," and "Accepted Alternates," taken from entries made on the Bid Form and compiled in the Bid Summary (see Preparing the Bid Summary).
3. Other items required by the bidding documents.

However, if one or more bids is equal to the lowest bid, and at least one of those bidders is a Small Business (SBE), or a Disabled Veteran Business Enterprise (DVBE), the contract shall be awarded to the SBE or DVBE entity. If there is more than one SBE or DVBE entity, then the contract shall be awarded by virtue of a lottery amongst those entities. If none of the bids tied for lowest bid is an SBE or DVBE entity, then the contract shall be awarded by lottery to one of the lowest bidders.

All bids may be rejected if acceptance of the lowest responsible bid is not in the best interest of the University. For example, all bids may be rejected if the lowest responsible bid exceeds the University's Construction Budget.

After the apparent lowest responsible bidder for competitive and informal bids has been determined, and approval has been received to award the contract, the bidder is sent the Agreement and other contract documents to execute (sign and return). After the signed documents are returned, and a preaward conference determines that all required submittals are acceptable, the contract is executed by the University, thereby making it valid, and is awarded to the bidder (at this point referred to as the contractor). See RD - Recommendation for Award of Contract.

University Facilities have been delegated authority by the President to execute and award construction contracts where such contracts are within appropriated funds, and provided that all of the following conditions have been met:

1. The contractor has been chosen by competitive bidding, when required, and the contract will be awarded to the lowest responsible bidder submitting a responsive bid.
2. The contract documents conform to the documents used in the bidding.
3. Protests or disputes involving bidding or award of the contract are resolved (see Bid Protests).
4. UCL has approved the legal form of the contract documents.
5. The commitment of funds, the scope of construction, and equipment to be acquired conform to the project scope and cost itemization in the current approved Project Planning Guide or conform to the project description in the case of minor capital improvement projects.
6. Funds are available.
7. Concurrence by a federal or other funding agency is attained in the contract award (see Concurrent Approval of Award by Funding Agency).
8. Execution and award of the contract does not invalidate or jeopardize any pending or intended application for funding (primarily from federal sources) of related construction or equipment.
9. No post-bid-opening, pre-award negotiations with the lowest responsible bidder have been conducted for the purpose of awarding a contract in an amount, scope, or time of completion different from that contained in the final bidding documents.
10. State review of any required environmental document has been completed.
11. All required contract documents have been received and determined to be acceptable.

Capital projects that are funded with state revenue bonds require the submittal of the Bid Summary and other supporting documents to UCOP for review and processing to the State Public Works Board (SPWB) for the approval of the award of the construction contract. Other supporting documentation includes (1) a cover letter describing the bid relative to the range of bids, deductive alternates to be accepted in order to maintain the project budget, and any other significant information; (2) a new Capital Improvement Budget (Base 1) based on the bid amount; (3) a construction drawdown schedule; and (4) an updated project schedule. Upon receiving approval by the SPWB to award the construction contract, UCOP will inform the Facility that they may award the construction contract and transfer the construction funds from the unallocated balances to the plant expenditure ledger (see Lease-Revenue Bond-Funded Projects).

Construction projects at the National Laboratories must comply with the management contracts between the Department of Energy and the University of California. Policies and procedures governing competitive bidding and other construction requirements at the National Laboratories are found in the Laboratory Procurement Policy and Standard Practices Manual. This is published and maintained by the Laboratory Administration Office within UCOP. See Business and Finance Bulletin BUS 43 Part 2, Responsibility and Authority, paragraph I.A.7.

Some federal agencies and programs require that after receipt of bids, and upon University determination of its intent to award a contract, such intention be referred to the agency or program for approval before award. When a construction contract is proposed to be executed for a federally or non-state-funded project (other than a contract that must be in compliance with the management contracts between the Department of Energy and the University of California), a determination must be made from the terms of the grant or funding agreement whether prior approval of the intent to award is required and what information must be submitted to the funding agency. The following may be required:

1. Affidavit of advertising
2. Bid Summary
3. Copy of low bid
4. Copy of Bid Bond and power of attorney by surety
5. Letter of recommendation for award
6. Construction project budget

Occasionally, funding for a portion of a project may be sought as a grant from federal or other sources on a matching basis where the condition to qualify for the matching portion may be that construction shall not have started prior to a specified date. The Notice to Proceed date should not be prior to the date specified in the matching fund Agreement.

After the Facility determines the lowest responsible bidder, and all conditions prerequisite to contract award have been met, the Facility completes and sends the Notice of Selection as the Apparent Lowest Responsible Bidder and other University forms by messenger or overnight delivery. See Instructions to Bidders, Paragraph 5.2 and Article 6; and Construction Contract Templates. The notice informs the apparent lowest responsible bidder that the following items must be submitted within 10 days after receipt of the notice:

1. Signed Agreement in triplicate. (Date the Agreement 10 days from date Notice of Selection is to be received by contractor.)
2. Three originals of the Payment Bond. (Notary acknowledgement for Surety.)
3. Three originals of the Performance Bond. (Notary acknowledgement for Surety.)
4. Optional University of California Business Information Form, used to self-certify as DBE, WBE, DVBE for statistical reporting purpose only.
5. Certificates of Insurance, along with Enrollment Application for coverage under the University Controlled Insurance Program (UCIP), if applicable.
6. Name, qualifications, and references for the superintendent proposed for the contract work.
7. Names of all subcontractors, with evidence of reliability and responsibility.
8. Preliminary Contract Schedule.
9. Selection of Retention Options and Escrow Agreement.
10. Other documents as stipulated in the Instructions to Bidders, Article 6.

If the 10-day time period for submission is extended, make the extension in writing with a new date for submission. Both the Notice of Selection and the Instructions to Bidders inform the apparent lowest responsible bidder that if the above items are not submitted by the date specified, the Facility may disqualify the bidder, the Bid Security may be forfeited, and the contract may be awarded to another contractor. If the items are not submitted as required, notify the bidder in writing that the Notice of Selection is no longer valid, and send another Notice of Selection to the next apparent lowest responsible bidder who submitted a responsive bid. The University may continue this process until a bidder is selected.

If the apparent lowest responsible bidder refuses to sign the Agreement (defaults on the bid bond), the Facility may demand payment from the low bidder's surety company. When this situation occurs, contact UCL for appropriate language to include in the "demand letter" to the surety.

Before executing the contract, the Facility must obtain the signed Agreement from the lowest responsible bidder, as well as required items listed in the Notice of Selection, General Conditions,Supplementary Conditions; and University policy: "Bonding Requirements for Construction Contracts.”

The selected bidder must furnish a Performance Bond for the amount of the contract sum, covering the faithful performance of the contract, and a Payment Bond for the payment of all obligations arising thereunder. The bonds may be secured through the bidder's usual sources if the surety companies chosen meet the requirements of the General Conditions and Supplementary Conditions. Verify that the surety company issuing the bond is an "admitted insurer", either by printing out information from the website of the Department of Insurance confirming the surety is an admitted surety insurer and attaching it to the bond or obtaining a certificate from the county clerk that confirms the surety is an admitted insurer and attaching it to the bond.

A Performance Bond is required for all construction contracts even if the lowest responsive bid is less than $50,000. A Payment Bond is not required for contracts less than $25,000.

Form of Bonds. The bonds must be on the forms provided in the bidding documents and must be dated on or before the date of the Agreement. A certified and current copy of the power of attorney of the attorney-in-fact who executes the bonds on behalf of the surety must be affixed to the bonds.

Signatures. Surety signature must be notarized.

The selected bidder is required to furnish completed Certificates of Insurance on the form provided in the contract documents (for appropriate coverage and limits see BUS-63, Exhibit D).  If the Project is covered by the University Controlled Insurance Program (UCIP), the selected bidder also must complete and submit the Enrollment Application (Form-3 attached to the UCIP Insurance Manual included in the bidding documents).

Use of the Contractor's Statement of Experience and Financial Condition is optional for contracts over $1 million. When the Contractor's Statement is required, it must be submitted with the bid or a current accurate statement must have been previously submitted to the Facility where the bid was submitted. The statement must be for the most recent calendar year or contractor's fiscal year. If required in the Prequalification documents, the statement must be included for evaluation. See Contractor Prequalification Procedures.

Determining Bidder Responsibility by Qualification. Should the contract documents stipulate that special minimum experience is required, the Contractor's Statement is a vehicle to set forth the contractor's compliance with the qualification procedure.

Determining Bidder Responsibility by Evaluation of the Statement. Bonding by an approved surety is, in most instances, evidence of a prospective contractor's experience and financial ability. However, bidders do not always submit a Bid Bond with their bid. Bidding documents allow the bidder to submit a certified check in lieu of a Bid Bond. The Contractor's Statement should be reviewed by the administrator who will make the award determination, to evaluate the bidder's responsibility (anticipated capability to satisfactorily complete the project).

A Bid Bond is not always an accurate reflection of a contractor's experience and financial status. The Contractor's Statement may be used to determine bidder responsibility if the administrator has reasons to question the bidder's financial capability despite the submittal of a Bid Bond.

To check experience, referenced owners of listed projects may be contacted to determine the quality and timeliness of previous work. Other University Facilities may be contacted for their experience with the prospective contractor. If the contractor's record is found to be poor, the contractor may be declared nonresponsible (see Responsibility: Origin and Policy).

A contractor's maximum dollar construction volume currently in process should not exceed (a) four times the net worth listed on line 23 of the statement or (b) 10 times the working capital (current assets less current liabilities). If the contractor's maximum dollar construction exceeds either ratio, contact the bidder's banker, identified on statement. Ask the banker to state the amount of credit available to the contractor for the project to be awarded. If the contractor's maximum dollar construction exceeds either ratio above after adjustment for additional credit available, notify the bidder of a proposed determination of nonresponsibility. Follow the disqualification procedure, but state that the duration of the disqualification is to be only as long as the contractor's financial condition remains inadequate (modify the reference to a disqualification for one year). Consult UCL before making this determination.

Prequalifying Bidders. The Contractor's Statement can also be used in prequalifying bidders.

Disqualifying Bidders. If material data in the Contractor's Statement is determined to be false, the bidder may be disqualified). Refer questions regarding the materiality of data to UCL before initiating the disqualification procedure.

Awarding the Contract to Another Bidder. If, on the basis of the information contained in the Contractor's Statement, the Facility determines that the bidder is not financially or otherwise qualified to perform the contract, the Facility may disqualify the bidder and award the contract to another bidder.

Accountant's Report. If this required report is not provided with the completed Contractor's Statement, or if there are substantial modifications or qualifications in the report, the bid may be nonresponsive. Refer questions about modifications or qualifications to UCL.

After the bidder-signed Agreement and other required bidder submittals are found acceptable, the contract must be executed by the person delegated the authority to execute University construction contracts. All the conditions for execution and award must be verified before the contract is executed.

The Secretary of The Regents does not require a construction contract to bear the corporate seal of The Regents, nor must the signature of the person executing the contract be attested by the Secretary. The seal and attest may be occasionally required by the other party to the contract or by an approving agency to the contract. When so required, submit the executed documents directly to the Secretary.

Digital signatures may be used in lieu of manual signatures provided they conform with the requirements set forth in this provision, California Code of Regulations (“CCR”) Sections 22000 through 22005, and Government Code Section 16.5. A digital signature is defined as an electronic identifier, created by a computer, intended by the party using it to have the same force and effect as the use of a manual signature. If a Facility chooses to accept digital signatures, the signature shall have the same force and effect as the use of a manual signature if the form of the signature has the following attributes: 

1. It is unique to the person using it;
2. It is capable of verification;
3. It is under the sole control of the person using it;
4. It is linked to data in such a manner that if the data are changed, the digital 
   signature is invalidated; and
5. It conforms to regulations adopted by the Secretary of State. 
   See Cal. Gov’t Code § 16.5; 2 C.C.R. 22002.

Prior to the acceptance of a digital signature, the Facility must adhere to the following requirements: 

1. The Facility shall ensure that the level of security used to identify the signer of a document is sufficient for the transaction being conducted.
2. The Facility shall ensure that the level of security used to transmit the signature is sufficient for the transaction being conducted.
3. If a certificate is a required component of a digital signature transaction, the Facility shall ensure that the certificate format used by the signer is sufficient for the security and interoperability needs of the public entity (see CCR 22002).

Digital signatures must be created by public key cryptography (“PKC”) or signature dynamics (see CCR 22003). Special consideration must be given to documents requiring public notarization. Bid bonds, payment bonds, and performance bonds cannot be accepted in a digital format.

After the contract has been executed, award the contract by sending the signed Agreement and other contract documents to the lowest responsible bidder, at this point known as the "contractor." Award the contract prior to the expiration of the bid bond. If the contract cannot be awarded prior to the expiration of the bid bond, request the contractor give written assurance that it will hold its bid good for the necessary additional days needed to award the contract.

A conformed set of the contract documents must be sent to the contractor with the agreement executed. The conformed set includes the items listed in the Agreement. Additional conformed sets to be sent include an Executive Design Professional copy, a copy for the University's Designated Administrator (the individual who will act as University with respect to the Executive Design Professional Agreement), and a record set to the Facility's project file. Additional conformed sets may be required by the Facility.

The Secretary of The Regents is the custodian of official records and documents. According to the Secretary, the University's official copy of construction documents and change orders may be retained in the office of, and under the control of, the official responsible at each Facility. This arrangement should be continued and should not be changed without approval by the Secretary.

Capital Project Activity. Capital Project Activity is a system of recording, on a quarterly basis, changes to the budget or schedule of capital projects. The Facility provides to UCOP updated information each quarter. It is entered into the computer, collected into an annual system-wide report, and presented to The Regents. UCOP verifies the accuracy of the Facility data for conformance with Project Planning Guide (PPG) Approval, Augmentation, and Completion.

Historical Data Base. The Historical Data Base collects historical data for the University's construction experience for facilities over $5 million. The data includes project description, original budget, bid information, schedule, construction contractor, Facility contact, legal information, and contract dates. This database helps the University establish a basis for estimating the cost of new projects and facilitates an exchange of experience between Facilities.

Quarterly Report. For state-funded projects, UCOP tracks and reports to State Public Works Board the dollars appropriated, dollars augmented, dollars reverted, and percent completion for each project.

An "early start" allows a contractor to move onto the project site and do preliminary work prior to contract award. This procedure is sometimes desirable and necessary in the interest of time. A contractor engaged in preliminary work on a site with the knowledge or acquiescence of the University is an invitee of the University. Subcontractors and their employees who provide labor or furnish materials on the site are invitees of the contractor.

The University has an affirmative duty to exercise ordinary care to keep the premises in a reasonably safe condition for invitees. The University may be chargeable for the negligence of an independent contractor employed to construct the work. An invitee may recover damages from the University for personal injuries or losses of property sustained on the premises if those injuries or losses are caused by the negligent conduct of independent contractors or the dangerous physical conditions of the premises. When in the best interest of the University, an early start may be permitted provided that:

1. A License for Early Start of Construction is executed by both the University and contractor.
2. The contractor furnishes to the University evidence of compliance with all insurance requirements of the contract.
3. All conditions prerequisite to the award have been met.
4. There is no legal restraint or unresolved bid protest.

Chancellors, Laboratory Directors, and members of President's Administrative Council have the authority to execute the License for Early Start of Construction. Authority may be delegated to a lower level at the Facility.

The Notice to Proceed is a document added to the contract to start construction. The Facility will issue this notice immediately after the contract has been executed unless a delayed start has been stipulated in the contract documents. The notice instructs the contractor to start work on a specified date and states the number of days available to complete the work and the projected completion date. If the contractor is notified orally to commence work, the Notice to Proceed shall be issued on the next workday. Confirm the oral notification in the notice. Send the notice by a means that provides proof of receipt.

The Division of Labor Standards Enforcement requires that a copy of the Notice to Proceed be included with the required extract (see DAS PWC-100 Online Application). The surety company also requires a copy of the Notice to Proceed, a copy of the Agreement, and one copy of each of the Payment and Performance Bond.

Recording the contract documents at the County Recorder's Office is not required. The Notice of Completion, however, must be recorded.

This chapter addresses how to handle bid protests that arise during the competitive bidding period. See Instructions to Bidders and RD - Bid Protest Procedures Flow Chart. 

A bid protest may be lodged against the lowest bidder, against the next lowest bidder if the Facility rejects the lowest bid, or against the selection of the lowest responsible bidder. The required bidder procedures for filing a protest are described in the Instructions to Bidders. This section describes University procedures for resolving bid protests. The University will complete its internal bid protest procedures before award of the contract.

Any person or entity may file a protest related to the selection of a bidder by the University for the award of a contract. The protest must state the specific reasons and facts upon which the protest is based and must be in writing and received by the Facility office issuing the bidding documents, not later than 5:00 pm on the 3rd business day following:

• The date of the bid opening if the Bid does NOT include Alternates.
• The date the bid results identifying the actual names of the bidders are posted in a public place if the Bid does include Alternates.

The Facility office in charge of issuing the bidding documents must investigate the basis for the protest, analyze the facts, hold an informal hearing if deemed appropriate, and issue a written decision within 15 days of receipt of the protest unless factors beyond the Facility's reasonable control prevent such a resolution, in which event such decision will be issued as expeditiously as circumstances reasonably permit. The Facility's decision must state the reasons for the action taken by the University. A copy of the decision shall be furnished to the protestor, the Bidder whose Bid is the subject of the Bid protest, and all Bidders affected by the decision. Use the following guidelines for making the decision and writing the decision letter:

1. Verify that statements in the decision letter agree with language in the bidding documents. Repeat the language verbatim, do not paraphrase. Include a reference where found in the Bidding Documents.
2. Assign responsibility for the decision to the Facility administrator responsible for the project. Consult UCL to help make the decision. Do not attribute the decision to the UCL (or anyone else).
3. Inform protesters of the results of the decision and that they have a right to appeal the decision if not satisfied.
4. Include the reasons for the action taken by the University for the denial or upholding of the protest or the rejection of bids.
5. Send the letter by a means that provides proof of receipt.
6. Copy UCL, the Chair of the University's Construction Review Board, and the other bidder or bidders.

See RD - Bid Protest Decision Sample Letter. Caution: The situations for bid protest decisions vary considerably; adapt this sample letter to the situation at hand.

For informally bid projects Facility's decision is final and not appealable within the University. For all other projects: The Bidder whose Bid is the subject of the protest, all Bidders affected by the Facility's decision on the protest, and the protestor have the right to appeal to the Construction Review Board if not satisfied with the Facility's decision. The appeal must be in writing and shall specify the decision being appealed and all the facts and circumstances relied upon in support of the appeal. A hard copy of the appeal must be received by the Chair, Construction Review Board, not later than 5:00 pm on the 3rd business day following appellant's receipt of the written decision of Facility, at the following address:

Chair, Construction Review Board
University of California
Office of the President 
1111 Franklin Street, 7th Floor 
Oakland, CA 94607-5200
Attention: Director, Design & Construction Services

And, by email to:

constructionreviewboard@ucop.edu

A copy of the appeal must be sent to all parties involved in the Bid protest and to the Facility, to the same address and in the same manner as the original protest. An appeal received after 5:00 pm is considered received as of the next business day. If the final date for receipt of an appeal falls on a Saturday, Sunday, or University holiday, the appeal will be considered timely only if received by 5:00 pm on the following business day. The burden of proving timely receipt of the appeal is on the appealing party.

The Facility must determine the date on which a protestor receives the Facility's written decision on a bid protest because the time within which a bid protest appeal may be filed is measured from that date of receipt. The Facility should contact the protestor to confirm receipt of the decision or send the decision in a manner that will provide confirmation of delivery.

Hearing on the Appeal. The Chair of the Construction Review Board will review the Facility's decision and the appeal, and issue a written decision, or if appropriate, appoint a Hearing Officer to conduct a hearing and issue a written decision. If a hearing is held, the hearing shall be held not later than the 10th day following the appointment of the Hearing Officer unless the Hearing Officer for good cause determines otherwise. The written decision of the Chair or Hearing Officer will state the basis of the decision, and the decision will be final and not subject to any further appeal to University. The Chair or Hearing Officer may consult with the UCL on the decision as to legal form.

This chapter addresses how to handle subcontractor substitution requests that arise during the competitive bidding period.

The University is subject to and follows the requirements of the Subletting and Subcontracting Fair Practices Act (the act):

1. The act prohibits the performance of any work for which a subcontractor was listed by any other person or firm (including the contractor) without the consent of the awarding authority (the University).
2. The act provides for substitution of subcontractors but limits the situations (grounds) when the awarding authority may consent to a contractor's request to substitute a subcontractor not listed in its bid.
3. The act also establishes procedures for the awarding authority to consent to substitute subcontractors.

The PCC lists seven grounds for which the University may consent to substitute another entity for a listed subcontractor. Only one of the grounds applies during the bidding process: "When the Prime Contractor demonstrates to the awarding authority, or its duly authorized officer, subject to further provisions set forth in PCC 4107.5, that the name of the subcontractor was listed as a result of an inadvertent clerical error."  For substitutions due to clerical error, follow the procedures in the Substitution Clerical Error Flowchart and below.  Substitutions proposed for any other reason must be rejected.

For substitution requests not resulting from clerical error, see Procedures for Substitution Requests on Grounds Other Than a Clerical Error. When a substitution request is due to an inadvertent clerical error, resolve the request before awarding the contract. If there is any question regarding a claim of clerical error, send the questions and pertinent background data to UCL for advice. Then, review the required contractor procedures stated herein with the contractor (see Substitution Procedures for Clerical Error Flowchart). In order to assert an effective claim of inadvertent clerical error in the listing of a subcontractor, the contractor must, within two working days after the time of the prime bid opening, give written notice of the claimed error to the University and give copies of that notice to the subcontractor claimed to have been listed in error and the intended subcontractor who had submitted bid to the prime contractor prior to bid opening.

Any listed subcontractor who has been notified of the request to substitute by the contractor is allowed six working days from the time of the prime bid opening within which to submit, to the University and to the prime contractor, written objections to the prime contractor's claim of inadvertent clerical error. Failure of the listed subcontractor to file written notice within the six working days is primary evidence of the listed subcontractor's agreement that an inadvertent clerical error was made.

To have the claim of inadvertent clerical error considered by the University, the prime contractor and the intended subcontractor must also, within eight working days from the time of the prime bid opening, submit to the University affidavits (along with such additional evidence as they may wish) affirming that an inadvertent clerical error was in fact made.

Listed Subcontractor Agrees With the Error. If the prime contractor, the listed subcontractor, and the newly proposed subcontractor have submitted timely affidavits, no public hearing is required.

Listed Subcontractor Fails to Make a Written Objection. If timely affidavits are filed by the prime contractor and newly proposed subcontractor, but the listed subcontractor does not submit within six working days written objection to the contractor's claim of inadvertent clerical error, no public hearing is required.

Listed Subcontractor Objects to the Clerical Error. If timely affidavits are filed by the contractor and the newly proposed subcontractor, but the listed subcontractor has, within six working days from the time of the bid opening, submitted to the University and to the contractor written objection to the contractor's claim of inadvertent clerical error, a public hearing must be held. Request a hearing officer to hold a public hearing.

Public Hearing. To set up a public hearing, request a hearing officer from UCOP. Make the request in writing, or if the request is made by telephone, follow up with a written request, and attach a copy of all related correspondence. Send a copy of the request and attachments to UCL.

The hearing officer working with UCL, UCOP, and the Facility gives written notice of the public hearing, by a means that provides proof of receipt, to the last known street address of the listed subcontractor, at least five working days before the date of the scheduled hearing. The hearing officer sends copies of the hearing notice to the contractor, the newly proposed subcontractor, and to UCL. The Facility must consent to the substitution after the public hearing if:

1. The hearing officer determines that an inadvertent clerical error has been made.
   The determination shall be based on the facts contained in the declarations submitted under penalty of perjury by all three parties and supported by testimony under oath and subject to cross-examination; and

The intended subcontractor is acceptable, that is, considered "responsible" (see Responsibility: Origin and Policy) by the University and, if applicable, by the University's Representative (see RD - Notice of Substitution).

The Facility should inform the contractor that consent to substitution or consent to the contractor's performance of the listed work does not entitle the contractor to any increase in the contract sum or an extension of the contract time.

The duties and responsibilities of the University's Representative may include construction contract administration during the construction phase of a project. University policy is to have contract administration and the role of the University’s Representative performed by either design professionals or by Facility personnel. If construction contract administration is performed by the design professional, the services to be performed are described in the Executive Design Professional Agreement and the construction contract documents. If construction contract administration is performed by Facility personnel, outside consultants may be used to provide support services to the University’s Representative.

In University construction documents, "University" is a contract term meaning The Regents of the University of California. In the FM, the more common term "University" has been substituted for "The Regents of the University of California" wherever possible.

The name of the University's Representative is identified in the construction contract documents and may be the design professional or a University employee. The term "University's Representative" is used in the construction contract documents even if the “design professional”, as that term is referred to in University policy, is fulfilling the role of the University’s Representative. See General Conditions.

In addition to the contract administration performed by the University's Representative, the Facility is responsible for administering additional contract duties and responsibilities of the University (The Regents) required by the construction Agreement and the Executive Design Professional Agreement. The Facility must also administer all University and Facility policies and procedures related to the project. These additional duties and responsibilities of the University are usually administered by University's Designated Administrator who is generally a University employee.

During contract administration, all contract documents, forms, correspondence, and other related records must become part of the Facility's project file.

During contract administration of projects funded by federal grants, the Facility may be required to comply with specific terms and conditions of the grants, especially in the areas of affirmative action, project reports, reviews, payment of Davis-Bacon wages instead of California prevailing wages.

 Prior to commencement of the work, the University's Representative holds a preconstruction conference to discuss administrative procedures to be followed during performance of the work. Items typically discussed at the conference include the construction documents, the schedule, communications, submittals, change orders, use of the site, special project requirements, required guarantees, and payment procedures. Specific project requirements will determine what is discussed and who should attend. The following parties are required to attend the preconstruction conference:

1. University
2. University's Representative
3. University's consultants (including the design professional)
4. Project Manager
5. Fire Marshal
6. Police Department
7. Environmental Health and Safety
8. Contractor
9. Contractor's superintendent
10. Major subcontractors
11. Other parties the University's Representative or University deems appropriate
12. Parking Services, Facilities Management.

Submittals are those items submitted by the contractor to the design professional or University's Representative as required by the contract documents. During construction, submittals may include, but are not limited to, the following:

• Contract schedule
• Written plans
• Shop drawings, product data, and samples
• Test reports
• Materials and equipment substitution requests
• Certifications
• Mix designs
• Calculations
• Qualifications of installers

The University's Representative is responsible for reviewing and approving submittals, and for maintaining a file of approved submittals. Before completion of the work, additional submittals are made by the contractor to the University's Representative. These submittals include the following:

1. As-built documents
2. Maintenance contracts
3. Guarantees
4. Operating and maintenance data

Two schedules are required by the contract documents: the preliminary contract schedule and the contract schedule. Each is prepared by the contractor and submitted to the University's Representative. If other schedules are deemed necessary, list these schedules in Specifications, Division 1 and General Conditions.

Preliminary Contract Schedule. The preliminary contract schedule graphically shows how the contractor has planned the work activities of the project. The contractor is required to submit this schedule with the signed Agreement. Within 7 days after receipt, the University's Representative reviews the preliminary contract schedule for content. If the schedule is acceptable, it is so noted and returned to the contractor for use until the contract schedule is due. If the schedule is not acceptable, the University's Representative makes review comments and returns the schedule to the contractor for appropriate adjustments. Once the preliminary schedule is accepted, the contractor uses it as the basis in developing the contract schedule.

Contract Schedule. The contract schedule graphically shows each work activity, the start and finish time for each activity, the interrelationship of all work activities, and the critical path activities. In delivery methods where the contractor is involved in the design phase, the Contract Schedule is revisited and adjusted at major milestones. During construction, this schedule is used by the contractor to coordinate the work of subcontractors. It is also used by the University's Representative and University to determine the progress of the work and to determine monthly progress payments. Payment of progress payments is dependent upon University's Representatives' acceptance of the Contract Schedule. Requirements for the contract schedule are specified in Division 1. Additional requirements may be added such as cost and manpower loading. The University's Representative also uses the accepted contract schedule to judge the validity of the contractor's claims of delays (see Time Extensions Resulting From Delays). The contract schedule is required to be updated regularly to show actual completion of activities (see Prevailing Wage Rates and Fair Wage) including the following:

• The as-built condition of all completed and in-progress work activities.
• All agreed-upon changes and all changes from change orders and field orders.
• Agreed-upon modifications to the methods of accomplishing the work.

The original contract schedule depicts the intent (as-planned) schedule. The contractor is expected to update the schedule based on actual construction progress and to adjust tasks as necessary to maintain the project timeline. The updated contract schedule shows both the actual (as-built) and the intent (as-planned) schedule.

The University's Representative is not responsible for approving the preliminary contract schedule but must determine its acceptability and determine if the contractor is using the schedule to coordinate the work. The University's Representative is responsible for determining acceptability of the updated contract schedule. If deemed unacceptable, the University's Representative will detail the reasons why.

Shop drawings are drawings, diagrams, schedules, and other data specially prepared for the work by the contractor or a subcontractor to illustrate detailed dimensions, materials, components of and methods of performing the work. Shop drawings are submitted by the contractor to the University's Representative for review and are used in actual construction by the construction team. The contractor is responsible for ensuring that all parts of the work conform with the construction documents and are fabricated and installed correctly and as approved. The University's Representative reviews shop drawings to ensure their conformance with the contract documents, General Conditions, and Specifications.

Submittal Process:

1. Contractor or subcontractor prepares shop drawings (subcontractor submits them to the contractor).
2. Contractor reviews and approves shop drawings for conformance with the contract documents and submits them to the University's Representative.
3. If the University's Representative is the design professional, the University's Representative reviews and stamps the shop drawings. The stamp shows whether the shop drawings are to be revised and resubmitted or if they are acceptable. If the University's Representative is not the design professional, the University's Representative transmits the shop drawings to the design professional for review and acceptance.

During construction, the University's Representative maintains a file containing all approved shop drawings. At the completion of the work, the Facility receives this file from the University's Representative.

Product data are illustrations, standard schedules, performance charts, instructions, brochures, diagrams, and other information furnished by the contractor to illustrate or describe materials or equipment for some portion of the work. Samples are physical examples that illustrate materials, equipment, or workmanship and establish standards by which the work will be judged. Product data and samples are prepared by the contractor or subcontractor as a package and include technical data from manufacturers and other information proving that specified items meet the requirements of the contract documents. The submittal process for product data and samples is the same as that for shop drawings . During construction, the University's Representative maintains a file containing a list of all approved product data and samples. At the completion of the work, the Facility receives this file, along with actual product data and samples, from the University's Representative. See General Conditions and Specifications in contract templates.

Test reports are written documents prepared by testing laboratories reporting on examinations performed on materials used in the construction (see Testing). The testing laboratory submits test reports to the University's Representative. See Specifications.

The required standards of quality, utility, and appearance of materials and equipment are established by the use of specific manufacturers' names, catalog numbers, specific brands, or trade names. Substitutions which are equal in quality, utility, and appearance to those specified may be accepted by the University’s Representative, subject to the provisions and procedures specified in the Specifications.

An Environmental Product Declaration (EPD) is a document that reports a product’s environmental impact over its life cycle.  The University requires that a facility-specific EPD be submitted to the facility for each eligible material to be used for each eligible project. The University construes “eligible projects” as all construction contracts awarded on or after July 1, 2022, and valued at $1,000,000 or more. The eligible materials are:

• structural steel (hot-rolled sections, hollow structural sections, and plate)
• concrete reinforcing steel
• flat glass
• mineral wool board insulation (light and heavy density types)

EPDs should align with and use the current Product Category Rule (PCR) for the specified eligible material. A PCR is a set of rules, requirements and guidelines used to develop an EPD for a product group. See the Buy Clean California Act Program for more detailed information.

EXEMPTIONS:

An exemption is a waiver of the Buy Clean California requirement for submitting an EPD on an eligible material (PCC 3503). The waiver must be based on one of the following circumstances:

• Requiring an EPD would be technically infeasible
• Requiring an EPD would result in a significant increase in project cost
• Requiring an EPD would cause a significant time delay
• Requiring an EPD would require a single-source provider for the eligible material
• Emergency

The complete definitions of these exemptions are located here. If the Facility intends to claim an exemption, they must:

1. Identify the exemption as listed in the UC Exemption list here and
2. Fill out the BCCA Exemption form. Forms provided by UCOP per BCCA Submission Process.

The General Conditions prevent the contractor and the University from assigning any of their responsibilities under the contract without the written consent of the other party.

However, the General Conditions require the contractor to assign its interest in first-tier subcontracts to the University, for performance of any part of the work. If the contractor is suspended or terminated, the University may accept assignment of any of these subcontracts and complete the work. At the time of suspension or termination, the University must notify the contractor in writing indicating which subcontracts will be accepted for assignment.

Any decisions concerning assignment are made by the University's Designated Administrator (see definition in Executive Design Professional Agreement, Contract Templates). The University's Designated Administrator (1) prepares a document that designates the subcontracts to be assigned and gives consent to the assignment, and (2) obtains the Facility's accounting office report for the project. Both documents must be submitted to the UCL for approval prior to execution of the consent document. See Accounting Manual Chapter P-415-6, Section V, Assignment Procedures. After the consent document is executed, a copy of the original signed document must be submitted to the Facility's accounting office to alert that office that there will be a change in disbursement of funds for completed work. Place the original consent document in the project file and send copies to each subcontractor whose subcontract is accepted for assignment.

The University is subject to and follows the requirements of the Subletting and Subcontracting Fair Practices Act (the act

1. The act prohibits the performance of any work by other than the listed subcontractor (including the contractor) without the consent of the awarding authority (the University).
2. The act provides for substitution of subcontractors, but limits the situations (grounds) when the awarding authority may consent to a contractor's request to substitute a subcontractor not listed in its bid (see Substitution of Subcontractors After Contract Award ).
3. The act also establishes procedures for the awarding authority to consent to substitute subcontractors.

The Instructions to Bidders require each bidder to submit a list of first-tier subcontractors (those that have a direct contract with the contractor) who will provide labor, equipment, or materials valued at more than one-half of one percent of the bidder's lump-sum base bid. See General Conditions.

The grounds for which the University may consent to substitute another entity for a listed subcontractor are those in PCC 4107, which are currently as follows:

1. When the subcontractor listed in the bid, after having had a reasonable opportunity to do so, fails or refuses to execute a written contract for the scope of work specified in the subcontractor's bid and at the price specified in the subcontractor's bid, when that written contract, based upon the general terms, conditions, and drawings and specifications for the project involved or the terms of that subcontractor's written bid, is presented to the subcontractor by the contractor.
2. When the listed subcontractor becomes bankrupt or insolvent.
3. When the listed subcontractor fails or refuses to perform his or her subcontract.
4. When the listed subcontractor fails or refuses to meet the bond requirements of the contractor as set forth in PCC 4108. PCC 4108 states, in part, that the subcontractor must be prepared to submit a Performance and Payment Bond (or bonds) if so requested by the contractor to whom it has submitted a bid.
5. When the prime contractor demonstrates to the awarding authority, or its duly authorized officer, subject to further provisions set forth in PCC 4107.5, that the name of the subcontractor was listed as a result of an inadvertent clerical error (see Contractor Substitution During the Bidding Period).
6. When the listed subcontractor is not licensed pursuant to the contractor's License Law.
7. When the awarding authority, or its duly authorized officer, determines that the work performed by the listed subcontractor is substantially unsatisfactory and is not in substantial accordance with plans and specifications, or that the subcontractor is substantially delaying or disrupting the progress of the work.
8. When the listed subcontractor is ineligible to work on a public works project pursuant to Section 1777.1 or 1777.7 of the Labor Code.
9. When the awarding authority determines that a listed subcontractor is not a responsible contractor.

For substitution requests resulting from clerical error, (see Bid Protests). When a contractor's request for substitution or request to perform work for a listed subcontractor is received, the Facility must give the listed subcontractor prompt, written notice of the contractor's request to substitute and the reason for this request (see RD - Notice of Substitution). Although additional subjects can be added to the notification letter, the following requirements must be met:

1. The notification letter shall be sent to the listed subcontractor by certified or registered mail to the last known street address of the listed subcontractor.
2. A description of the scope of the work to be performed by the proposed substitute subcontractor shall be included in the notification letter.
3. A copy of the contractor's request for permission to substitute or remove a listed subcontractor shall be enclosed with the notification letter.
4. The notification letter shall advise the listed subcontractor that it has five working days from the date of receipt of the notice to submit written objections to the substitution, to the Facility office issuing the letter.

The listed subcontractor's failure to file written objections within five working days is deemed to constitute the listed subcontractor's consent to the substitution. The contractor's request may be consented to using the Consent to Substitution of Subcontractors (see RD) if (1) the listed subcontractor consents either expressly in writing or by not objecting within five working days, and (2) the proposed substitute subcontractor or the contractor (if the contractor proposed to do the work) is acceptable, that is, considered "responsible" (see Responsibility: Origin and Policy), by the University and University's Representative. If the Facility consents to substitution of subcontractor, then contractor is sent Indemnity Agreement (see RD - Substitution of Subcontractors Indemnity Agreement).

Public Hearing. If the listed subcontractor files timely written objections, the Facility must request a hearing officer from the Chair, Construction Review Board. Make the request in writing or, if the request is made by telephone, follow up the telephone request in writing. Attach a copy of all related correspondence to the written request. The hearing officer working with UCL; the Chair, Construction Review Board; and the Facility gives written notice of the hearing, by a means that provides proof of receipt, to the contractor and the listed subcontractor, at least five working days before the date of the scheduled hearing. Based on evidence and testimony offered at the hearing, written findings are issued on whether the stated justification for the substitution is authorized and has been substantiated. If an authorized ground is found to have been substantiated, the Facility must consent to the substitution request provided that the proposed substitute subcontractor or the contractor (if the contractor proposed to do the work) is acceptable, that is, considered "responsible," by the University and University's Representative. If a listed subcontractor has been prequalified, the University shall require that the substitute subcontractor also have been prequalified.

The Facility must inform the contractor that a consent to substitution or consent to the contractor's performance of the listed work does not entitle the contractor to an increase in the contract sum or an extension of contract time.

If the contractor fails to specify a subcontractor or specifies more than one subcontractor for the same portion of the work, and that portion exceeds one-half of one percent of the contractor's lump-sum base bid, the contractor must perform that portion of the work as set forth in PCC 4106. Exception to this regulation is permitted in cases of public emergency or necessity, and then only after a finding documented in writing is issued as a public record of the University setting forth the facts constituting the emergency or necessity (PCC 4109). In these cases, the Facility must contact the UCL by telephone or e-mail, and UCL will determine if an emergency or necessity exists. Another exception to this regulation is permitted for change orders (PCC 4107). An unlisted subcontractor may be used for change order work if that subcontractor is acceptable to the University and, if applicable, to the University's Representative.

A contractor violating any provisions of the Subletting and Subcontracting Fair Practices Act defaults under its contract with the University, and the University may exercise the option, at its own discretion, of (1) canceling the contract or (2) assessing the contractor a penalty in an amount of not more than 10 percent of the amount of the subcontract involved. The contractor is entitled to a public hearing (see Procedures for Substitution Requests on Grounds Other Than a Clerical Error) and five days' prior written notice of the time and place of the hearing before the University can determine which sanction, if any, to impose (PCC 4110).

If the Facility discovers that work is being performed by someone other than the subcontractor listed in the bid, the Facility must notify the contractor, in writing, of any planned penalty for this violation. In the notification letter, the Facility must inform the contractor of entitlement to a public hearing if the contractor objects to the planned penalty within five working days of receipt of the notification letter. If the contractor does not object to the planned penalty, no hearing is required. If the contractor does object, the Facility must request a hearing officer from the Chair, Construction Review Board.

Occasionally, a violation is discovered during the substitution request process. In these cases, the Facility requests in writing that the hearing officer inform the contractor that penalties will be considered during the hearing. The hearing officer's findings may include a statement that the contractor has violated the provisions of the Subletting and Subcontracting Fair Practices Act, and that the Facility may impose a penalty at its discretion.

The lowest responsible bidder is required to submit, to the University, Certificates of Insurance and bonds required by the General Conditions and Instructions to Bidders. The certificates are part of a package of documents required to be submitted within ten days after the bidder's receipt of the Notice of Selection as Apparent Lowest Responsible Bidder. The certificates must be prepared on the forms required by the University. The following insurance policies, coverages, and bonds must be furnished by the contractor:

• Payment Bond
• Performance Bond
• Comprehensive or commercial form general liability insurance
• Business automobile liability insurance
• Workers' compensation and employer's liability insurance

See Business and Finance Bulletin, BUS-63 Exhibit D, University of California, Office of the Executive Vice President-Chief Financial Officer, Oakland, CA.

The Payment Bond secures the payment of claims initiated by subcontractors, laborers, mechanics, material suppliers, and other persons, as provided by civil law. Three original bonds are executed. One original is for the contractor, one original is for the Surety, and one is for the University.

The Performance Bond guarantees that the project will be completed if the contractor is unable to fulfill the requirements of the contract documents. Three original bonds are executed. One original is for the contractor, one is for the Surety, and one is for the University. The Facility must contact UCL if the contractor is unable to complete the contract.

Comprehensive or commercial form general liability insurance, business automobile liability insurance, workers' compensation, and employer's liability insurance protect the contractor, University, University employees and consultants, and the University's Representative from claims resulting from accidents and injuries related to the construction of the project. The Facility's Project Manager records in detail the events leading to an accident, the conditions at the time of the accident, and a complete description of the accident, damage, and injuries. This report must be submitted to the Facility's risk management office.

For contracts valued at $300,000 or more, Builder's Risk insurance, excluding earthquake and flood insurance, is provided by the University. The contractor is responsible for any deductible. Once the contractor has been selected for the project, the Facility is responsible for completing the Builder's Risk Insurance Application form. The application must be filed before the Notice to Proceed is issued. All Builders Risk-related forms and templates are now available at the UCOP Risk Services - Construction Liability & Insurance: Resources website.

Builder's Risk coverage terminates on the date of Final Completion in the Notice of Completion filed by the University when the construction of the project is complete. (Coverage terminates for a Job Order on the date of Final Completion in the Inspection Acceptance issued by the University, and for all Job Orders on the date of Final Completion in the Notice of Completion for the entire project covered by the JOC contract). Since the date of completion of construction is assumed to be the date initially entered on the application for coverage, it is essential that project managers keep their campus contract administrator, UC Risk Services and the University's insurance broker regularly informed of the status of construction, especially toward the end of the project. Submission of the Request to Extend or Terminate Builder's Risk Insurance at least 10 days prior to the date of termination on the certificate of insurance will prevent an accidental lapse of coverage if construction is not completed by the originally anticipated date and will stop the accrual of premiums if the project is completed early. A Facility will need to provide evidence of completion of construction when requesting cancellation of Builder's Risk insurance for a project. For additional information related to Builder's Risk insurance please visit the Construction Liability and Insurance page of the Risk Services website.

This chapter addresses the administration of and responsibility for activities at the job site. These activities include observation, inspection, testing, and surveying during the construction process. Also discussed are progress meetings, other meetings, and the responsibility for safety in the field.

Field observation, a duty of the University's Representative, is performed to monitor progress of the work, observe tests and inspections, or to make acceptances required by the contract documents. See Specifications.

•  Inspection differs from field observation in that inspection is a detailed examination of the work. See University policy: "Capital Improvement Program Management" and Responsibilities of the Inspector below:

Inspection Policy. University policy states that the Facility determines responsibility for inspection.

Responsibilities of the Inspector. The responsibilities and limitations of inspectors (including special inspectors) are set forth in Division 1 of the Specifications, and in 

Responsibilities of the Inspector:

The inspector, whether employed by the design professional or the University, shall: 

1. Become thoroughly familiar with contract document requirements, applicable codes and standards, approved submittals, and all instructions or clarifications issued by the design professional.
2. Generally act as liaison between the contractor and the design professional.
3. Keep a log of written communications including submittals received from or issued to the contractor.
4. As appropriate to the nature and extent of construction, monitor the quality and quantity of the work and promptly report to the design professional nonconforming work or nonconforming work performance.
5. Prepare a daily report recording:
   • Inspector's time and activities on the project.
   • Weather conditions.
   • Nature and location of work being performed and by whom.
   • Number of workers by trade.
   • Oral instructions and interpretations given by the design professional.
   • Specific observations on results of oral instructions and interpretations.
   • Any occurrence or work which might result in a claim for a change in the contract sum or contract time.
   • Names of visitors, their titles, and the time and purpose of their visit.
   • This report shall be prepared for each normal work day or for each day on which the contractor performs work, and a copy shall be promptly sent to the design professional and the University.
6. Observe testing and inspection done by the contractor as required in the contract documents and coordinate and observe special testing and inspection when requested by the design professional or University.
7. Monitor the contractor's proposed schedule and the actual construction schedule and promptly report to the design professional discrepancies between the schedules and any conditions which may cause construction delays.
8. Periodically photograph the work, paying special attention to portions of the work that have been or may be rejected or may be associated with a claim or delay.
9. Review in detail the contractor's Application for Payment and report the findings of this review to the design professional.

The inspector shall not:

1. Authorize deviations from the contract documents.
2. Approve substitute materials or equipment.
3. Advise on or issue directions concerning aspects of construction means, methods, techniques, sequences, or procedures in connection with the work.

One of the inspector's duties is to prepare a daily report; the suggested content and format of this report is shown in RD - Inspector's Daily Report.

If a consultant design professional or another consultant serves as the University's Representative, then that party may, if required by the Executive Agreement, provide inspection services. If the University's Representative is a Facility employee, then the Facility is responsible for providing inspection services. The Facility may use inspectors from its staff or an inspection agency.

Each party to the contract (University, design professional, contractor, construction manager, etc.) shall have clearly defined responsibilities; overlapping responsibilities among these parties must be kept to a minimum. Overlapping responsibilities may result when the Facility allocates inspection responsibility. When a consultant design professional performs contract administration, and the Facility performs inspection, the design professional coordinates the performance of a Facility employee, requesting inspections, when appropriate. Inspection responsibility must be assigned during the development of agreements for the design professional, construction manager, and project manager. Specifications, Division 1, specify the roles and responsibilities of inspectors.

The Facility is responsible for determining its necessary inspection staff level. Whether inspection is performed by the Facility or by a consultant, the basic inspection staff provides the Facility with adequate personnel to perform inspection and coordination of inspection of the work. The inspection staff is required to provide daily inspection for each project and to ensure that special inspections are performed as specified in the contract documents.

Guidelines for Establishing the Inspection Staff. Factors to be used by the Facility for establishing the basic inspection staff are:

• Magnitude of hospital work.
• Magnitude of Capital Improvement Program.
• Complexity of the Capital Improvement Program directly related to the complexity of instruction and research programs and the resultant complexity of space.
• Size, diversity, and complexity of the Facility.
• Inspection agency availability.
• Current Facility staff capability.

Geotechnical Engineer Employed by a Consultant Design Professional. The design professional may employ a geotechnical engineer for:

• Design recommendations and similar professional engineering services.
• Special inspection, field analyses, and test report analyses if, during construction, the consultant design professional is responsible for inspection.

For such services, the geotechnical engineer is under the direction of and reports to the University's Representative. The University will pay for inspection services as additional services unless such services are included in the Executive Agreement as Basic Services. Design recommendations and similar professional engineering services are part of the design professional's basic services.

Geotechnical Engineer Employed by the Facility. The Facility may employ a geotechnical engineer for soils investigation, design recommendations, and for inspection during construction when the Facility is responsible for inspection services. Use the Professional Services Agreement. The geotechnical engineer may inspect subsurface conditions, document the contractor's performance for payment purposes, and monitor the quality of excavation, grading, and compaction. The geotechnical engineer's reports are given to the University Representative, with copies to the University. The geotechnical engineer may not direct the contractor, nor approve or disapprove of the contractor's work. The geotechnical engineer must not design foundation changes or recommend details of such changes to the consultant design professional as part of the performance of the consulting agreement with the University.

The Health and Safety Code requires the Department of Heath Care Access and Information (HCAI) to be responsible for the enforcement of building standards related to hospital buildings. This includes plan checking and inspection of the design and details of architectural, structural, mechanical, plumbing, and electrical systems, and the observation of construction. The Facility must meet the requirements of the Hospital Seismic Safety Act and make the necessary arrangements for inspections with HCAI.

HCAI requirements include:

1. HCAI designation of the inspector. The Facility must submit the inspector's name and qualifications to HCAI for approval.
2. Submittal of a quarterly verified report by the inspector to HCAI. This report must also be submitted by the design professional, the design professional's consultants listed in the Project Directory, and the contractor.
3. HCAI issuance of a special HCAI Building Permit. The University or the University's Representative completes and submits the permit.
4. Submittal of a Licensed Contractor's Declaration. The University's Representative has the contractor complete the declaration form and forwards the form to HCAI.
5. Submittal of special Change Order Approval forms. The University's Representative completes the forms and obtains signatures of the design professional, structural engineer, general contractor, and University. The University's Representative must then obtain HCAI approval before making the changes.
6. Deferred approval of certain items for structural calculations and design prepared by contractor. These items are usually specified by performance specifications and are therefore not reviewed and approved by HCAI during the design submittals. The University's Representative makes these submittals for the contractor. The Specifications may require the contractor to submit to HCAI and obtain necessary approvals on contractor-designed portions of the work.

See California Code of Regulations, Title 24, California Building Standards Code, all applicable parts; California Code of Regulations, Title 24, Part 1, Building Standards Administrative Code, Chapters 6 & 7; California Code of Regulations, Title 22, Division 7, Chapter 1, Sections 90001 – 97772; and Health and Safety Code, Sections 129675 - 130070, known as the Alfred E. Alquist Hospital Facilities Seismic Safety Act of 1983.

Services of a Materials Testing Laboratory. Materials furnished under construction contracts are subject to inspection and testing by a materials testing laboratory for compliance with contract requirements. All such inspections and tests of materials are made in accordance with applicable American Society of Testing and Materials standards or other procedures set forth in the Specifications.

Payments for Testing. Specifications state that the University pays for all tests and inspections made by the University's testing laboratory, and the contractor pays for all tests and inspections made by the contractor's testing laboratory. The Specifications must clearly indicate whose testing laboratory will perform the testing and inspection. Exceptions to this requirement would include additional testing services provided by the University for reasons listed below under "Additional Testing."

Testing and Inspection Services by the University. In general, the University, as required by the Specifications, and with advice from the design professional, provides testing and inspection services by a materials testing laboratory during the construction phase. Such services are performed under the Professional Services Agreement. Laboratories submit all testing and inspection reports directly to the University's Representative. The University's Representative distributes copies to the University, University's consultants, and the contractor. The University's Representative judges the acceptability of all reports, including methods used, results, and content.

Additional Testing. Specifications state that if additional testing and inspection costs occur because the work or materials fail to meet contract requirements, then all costs for additional tests and inspections relating to an occurrence that is determined to be the contractor's responsibility shall be deducted from the contract sum by change order.

Testing and Inspection Services by the Contractor. Certain classes of materials testing and inspection may be provided by the contractor. Such cases are limited to quality control testing in manufacturing plants (including reinforcing and structural steel, concrete, and manufactured items) and certain field testing such as performance testing of mechanical and electrical systems. Testing provided by the contractor is performed by manufacturers, testing agencies, or the contractor's field forces as appropriate. The Specifications must clearly indicate tests to be provided by the contractor. If testing is the responsibility of the contractor, means, methods, results and report contents must be specified in each applicable technical section of the Specifications. The University's Representative judges the acceptability of all testing performed on behalf of the contractor.

University Responsibilities. The University is responsible for hiring a surveyor to establish horizontal and vertical controls, as shown on the project site plan. Additionally, the University's Representative may request the University to make available a survey describing the known physical characteristics, boundaries, easements, and utility locations of the project site.

Contractor Responsibilities. The contractor is required to take field measurements and carefully compare the contract documents with such field measurements. Individual Specifications sections may also require the contractor to make special surveys, for example, to check the vertical alignment of a steel frame. See General Conditions.

Project progress meetings are held to discuss and resolve issues concerning the contractor's Application for Payment, Submittals, field problems, construction schedule, and other items as appropriate to the Project. The University's Representative organizes and conducts project progress meetings. See Specifications.

The contractor is solely responsible for initiating, maintaining, and supervising all safety precautions and programs in connection with the performance of the contract work. The contractor must take necessary precautions for safety and provide protection to prevent damage, injury, or loss to the following:

• Persons involved in the work or who may be affected by the work.
• The workplace, materials, and equipment need to be incorporated therein.
• Other property at the project site and adjoining property.

The specifications require the contractor to comply with Federal Occupational Safety and Health Administration regulations and the California Health and Safety Code. See General Conditions.

Contract modifications are changes in the work required during construction. This chapter discusses the means of accomplishing these changes through two methods: Field Order and Change Orders. Guidelines for approving substantial change orders and granting time extensions are also given.

If a change in the work must be performed before the University and contractor agree upon all terms of the change, a field order describing the change in the work scope and estimated contract sum and contract time adjustments, if applicable, may be issued by the University with or without the contractor's agreement. Field orders are used only when (1) emergency conditions exist where life or property are endangered, (2) the extent of the work cannot be determined due to unknown conditions, or (3) a delay in proceeding with the work would affect the critical path and cause a delay to the entire Project. Field orders are not to be issued when the scope of the work and an estimated cost can be determined. A Change order or a unilateral change order must be used instead.

The contractor is required to promptly proceed with a field order. If the contractor does not agree with the order and does not sign it, the University's Representative must adjust the contract sum and contract time based upon back-up documentation provided by the contractor to justify actual costs and time, if applicable. A field order contains a statement that it shall be superseded by a change order that includes the actual adjustments, if any, to the contract sum and the contract time, as well as the change in the scope of the work. See General Conditions. 

When a contractor is directed by a field order to perform work, payment is made for the actual cost of the extra work plus a contractor fee in accordance with General Conditions; however, payment cannot be made until a change order is issued incorporating that field order. Field orders must be incorporated into change orders at the earliest possible time to avoid delayed payment to the contractor. When the extra work on a field order extends over a lengthy period the Facility converts the field order by issuing a "not to exceed price" change order. This special type of change order will allow the contractor to be paid for actual costs with the normal monthly progress payments.

A change order is a post-award modification to the contract. A change order may revise, add to, or delete previous requirements of the work, adjust the contract sum, or adjust the contract time. By signing a change order, the contractor agrees to the cost and time, if applicable, of the contract modification; however, the University has the right to order changes in the work by issuing a field order. Change orders are not to be used in pre-award negotiations to negotiate a change in the scope of work, contract sum, or contract time. Change orders may not be executed until the contract has been signed by the University and the contractor.

Change Orders must include costs for Workers’ Compensation Insurance.  Expected market rate for workers’ compensation (WC) on a Change Order (CO) can be calculated using the following formula:

Expected Rate = Current approved WCIRB (Workers Compensation Insurance Bureau of California) base rate by class code X contractor’s EMR (Experience Modification Rate) X 1.1.

WCIRB publishes approved rates by class code for all trades twice a year; these rates can be obtained from Campus Risk Management. EMR for a contractor can be verified at Compline, for a fee. Alternatively, a campus may request the Compline EMR report from a contractor with their Change Order Request. 

To expedite payment to the contractor, a change order may be issued by the University without the contractor's signature.

Before a change order can be prepared, the cost of the change must be determined. Four methods are used to determine the cost: 

• Unit prices listed in the construction Agreement.
• Agreed-upon unit prices.
• Agreed-upon lump sum supported by a Cost Proposal.
• Actual cost plus a contractor fee.

When requested by the University, the Cost Proposal form, or an approved version thereof, must be used by the contractor. Instructions for the contractor are included on the form. The contractor's fee, which includes overhead and profit, is defined in the Agreement, Cost Proposal, and in General Conditions. The University's Representative is required to review and recommend the submitted proposal.

Agreed-Upon Lump Sum Supported by a Cost Proposal. General Conditions, Article 7, authorizes compensation for extra work by a lump sum agreed upon by the University and the contractor. The lump sum proposed must be determined to be fair and reasonable. Require the contractor to provide an estimate with detailed backup using the Cost Proposal contained in the Exhibits.

Actual Cost Plus Contractor Fee. General Conditions, Article 7, authorizes compensation for extra work based on actual cost plus a contractor fee. The contractor is paid for the actual time spent by the contractor's employees and subcontractors and the materials they actually used. In addition, the contractor is paid for overhead and profit. The contractor is required to keep daily records of its actual costs, and submit them on a weekly basis for approval by the University's Representative.

This compensation method is used when the University and the contractor cannot agree on payment based on unit prices or a lump sum. In these cases, the University orders the work to be performed by issuing a field order. The field order must stipulate a "not-to-exceed price."

Unit Prices. General Conditions, Article 7, authorizes compensation for extra work based on unit prices stated in the construction documents or agreed upon by the University and the contractor. This compensation method is used when the cost of a procedure can be estimated, but the quantity cannot be determined prior to beginning work. For example, if the contractor is required to perform excavation for a building foundation, the contractor may be required to excavate until the soil encountered is of specific physical properties. In this case, the contractor knows the cost of removing a unit of soil but does not know how much soil will be removed before the excavation operation is considered complete. The unit-price method of costing is usually anticipated before the project goes out to bid. Unit price amounts are usually stated in the Bid Form; however, unit prices may also be agreed upon during construction. The contractor's overhead and profit are included in unit-price figures.

After the Facility Project Manager reviews and recommends the change order, and the accounting office verifies sufficient funds are available, and the University's Representative recommends the change order, it is sent to the contractor for acceptance. After receipt of the signed change order from the contractor, the Facility approves the change order. Executed change orders are then distributed to all signature parties. The original and all backup is placed in the project file. (See Project Contingency Use for restrictions on executing certain change orders.)

Change orders may be issued to adjust the contract time or contract sum after the Notice of Completion is filed to incorporate the results of claims negotiations. Such change orders must not change the scope of the work because the Notice of Completion represents that all work is complete. Work includes receipt of as-built documents, guarantees, manuals, and all required submittals.

The contractor may not agree with the content of a change order and, therefore, may refuse to sign the order. The Facility may issue a unilateral change order without contractor's signature when the Facility determines it is in its best interest for the contractor to receive an adjustment of the contract sum or the contract time, as Facility believes to be properly due contractor, even though no agreement has been reached between the contractor and the Facility. Promptly reject any attempted qualification the contractor adds to its agreement to the terms of a prepared change order on the face of the change order or in an accompanying letter. In unusual circumstances, UCL will provide language for accepting a qualified change order. See General Conditions. 

Substantial changes to the work may be required after contract award. If such changes are known during bidding—and their design is complete – use alternates that are exercisable for a stipulated period of time after award (see Authority Needed to Negotiate and Execute Change Orders). If the design of the substantial change is not final and cannot be bid as an alternate, the substantial change may be accomplished as a change order only if the conditions of Change Orders Changing the Scope of Work, below, are met.

Additive Change Orders
If the cost of a change in the scope of work to be accomplished by a change order or series of change orders exceeds $100,000, or if the proposed changes in design are not incidental to the scope of the work as bid, the work may not be performed by change order unless it can be convincingly demonstrated that no advantage would be gained by conducting an advertised bid for the work.  Breaking down an addition to the work such that it falls below the threshold for the purpose of avoiding the substantial change analysis is not acceptable.  Also, note that other than acceptance of bid alternates, changes to the work known after the bid date but prior to award are generally not acceptable because of the appearance of a non-competitive bid process. Changes made to Design-Build, Unit Price, Cost Plus and CM at Risk contracts have particular exceptions to the $100,000 threshold. 

It is the Facility’s responsibility to document the rationale for a substantial change order. The written justification for the substantial change order shall identify the primary factors supporting the decision to proceed by change order. In addition to the primary factors, all of the following factors must also be considered in the written justification to determine if a change order is justified:

• COST  – Will competitive bidding save money? To what extent will site conditions, storage, limited accessibility, etc. restrict interest of bidders for new work if the new work is bid as a separate project and thereby increase cost?
• REWORK – To what extent will rework be necessary to coordinate with new work? Will competitive bidding of new work affect the University’s ability to obtain correction of deficiencies in specialty work or integrated systems due to a division of responsibilities?
• INCIDENTAL – Is the new work incidental to existing work?  A change order is inappropriate if there is a significant difference in function or in the programmatic features or additions to the as-bid design.
• SCHEDULE  – To what extent will competitive bidding of the new work affect the existing/current schedule?  To what extent will competitive bidding of the new work affect use of the completed space if the new work is competitively bid either during the performance of the existing contract or later?

Additive Change Orders to Design-Build, Unit Price and Cost Plus contracts  
Change orders exceeding $100,000 to Design-Build, Unit Price and Cost Plus contracts are expected as a matter of course to assign detailed scope and costs to the contractor.  These change orders typically involve discrete bid packages, scope clarifications and cost accounting; they do not increase the total cost of the contemplated contract as bid. Such a change order is substantial but is automatically justified if the scopes of the work and the cost have already been appropriately competitively bid through the contractor selection process or otherwise. The Facility must document the change in the Project File, noting that it is a function of the delivery method and is within the contemplated cost and scope. However, if the change alters the programmatic scope or the total contemplated cost or if the change is not incidental to the scope of the work as bid, then the change is substantial and is not automatically justified. The factors listed above must be used to determine if proceeding with the change as a Change Order is justified. 

Additive Amendments/Change Orders to CM at Risk contracts

• Prior to award of bid package: Bid-packages (in phase 2) for CM at Risk contracts most commonly exceed $100,000 and are executed as Amendments and not Change Orders. This is a matter of course when assigning detailed scope, schedule and costs of the bid-packages to the contractor. The Amendments are substantial and justified because the work is competitively bid by the CM Contractor following University competitive bidding rules and procedures. The contractor’s fee to assume responsibility and risk of this work is included in the CM at Risk contract.
• After award of bid package:  However, if a substantial change associated with a particular scope of work of a bid package is proposed after award of the contract for that bid package, the change must be evaluated as any typical change order would be, and the factors listed above must be used to determine if proceeding with the change as a Change Order is justified.
• Increase in the CM’s fee: At any time, an increase of $100,000 or more in the CM’s fee is a Substantial Change and must be justified in accordance with the requirements of this section 3.2.7 to be implemented as a change order. The use of an independent design professional, cost consultant, construction scheduler, or contractor may be appropriate to document the justifications for proceeding with a substantial scope change by change order. A proposed additive substantial change order and the adequacy of the justification for using a change order instead of competitively bidding the work may be discussed with UCOP and UCL. It is the responsibility of the facility to maintain a written record as part of the contract file of the facts and conditions which justify the determination that the change order is justifiable in accordance with the factors above. 

Deductive Changes. A proposed change order that will delete substantial portions of the work does not require justification as to competitive bidding but does require review as a change to the scope of work (see Change Orders for Post-Award Alternates below). 

Delay Cost Considerations. The possibility of contractor claims for reimbursement of indirect costs (e.g., extended overhead and loss of efficiency) because of the impact of a proposed change order on the work is evaluated by the Facility. Such an evaluation is especially pertinent if the cumulative value of contract sum adjustments exceeds or will exceed 5 percent of the original contract sum, or if the project is already significantly behind schedule, and completion would be further delayed by the proposed change order.

A change order which extends the contract time, when the contractor is already subject to Liquidated Damages due to delay in completion of the project, will forfeit the University's right to collect Liquidated Damages based upon the original contract time, adjusting the start of Liquidated Damages by the added time (see Guidelines For Granting Time Extensions Resulting from Delays).

Certain steps must be taken prior to approving a change order which changes the formal scope of work for a capital project. A "change to the scope of work" is defined as any change that alters the programmatic capability or requirements as delineated in the project's approval document (e.g., Project Planning Guide, state-approved Preliminary Plans or Working Drawings).

Scope of Work Changes. Examples of changes to the scope of work include (1) significant changes to assignable or gross square feet, (2) number of housing units or classroom seats to be provided, and (3) functional capacity (e.g., sewer, electrical, or mechanical). Examples of what are not considered changes to the scope of work include (1) "technical" changes (e.g., unforeseen site conditions, errors in existing as-builts that require additions or revisions to work); and (2) requests for information from the contractor which require changes to the contract documents. Questions concerning scope changes should be addressed to UCOP for clarification.

State-Funded Projects. Change orders that change the scope of work are not permitted for state-funded Major Capital Improvement projects unless authority has been granted by the state, as coordinated through UCOP. For state-funded Minor Capital Improvement projects, the project description should be revised and forwarded to UCOP for approval.

Non-State-Funded Projects. For non-state-funded projects, the appropriate approval body must be notified. In the case of Chancellor-approved Minor and Major Capital Improvements, a Facility approval process should be in place. For both Regents and Office of the President approved projects, the change in scope must be forwarded to UCOP for information required and approval.

In all cases, should the most recently approved Capital Improvement Budget require a budget augmentation due to the change order, the appropriate budget augmentation request procedure must be followed (see Volume 3: Design).

Post-award alternates are alternates that the University may accept after award of the contract . Alternates are listed in the Agreement by number, price, and time required for acceptance. The alternate's scope of work must be described in the Specifications. Post-award alternates are accepted and added to the contract by change order. Contractual conditions are not changed. Track the time limits for accepting post-award alternates, as listed in the Agreement. If a time limit expires, the contractor is not obliged to accept the change order. Alternates not accepted during the bidding period must specify a time for anticipated acceptance.  Alternates which do not stipulate a delayed time for acceptance may not be incorporated by change order.

The Facility may negotiate and execute a change order if the cost of the change is within appropriated funds and if the conditions below are met. If the new contract sum, including the cost of the change order, is in excess of appropriated funds, contact UCOP to obtain specific authorization by Resolution of The Regents.

Before a change order is issued that changes the exterior appearance of a building design previously approved by The Regents, the proposed exterior changes must be submitted to The Regents for approval. Approval from UCOP is required when a change order alters the scope of a major capital improvement project or the description of a minor capital improvement project (see Change Orders for Post-Award Alternates).                    

Project Contingency (line 9 of the Capital Improvement Budget) is a reserved portion of the project budget intended to cover unforeseen costs that arise during the construction phase. The contingency is used to address change orders and is based on the total construction (hard) costs—Site Clearance (line 0), Building (line 1), Exterior Utilities (line 2), and Site Development (line 4)—as well as the complexity of the project. Contingency funds are not intended to cover cost overruns resulting from poor planning, estimation errors, or avoidable delays. A contingency is included in the budget so the project can proceed with minimal interruption due to modest cost overruns or non-scope changes. Typical contingency uses include addressing inconsistencies in soils or foundation conditions, unknown building conditions, or potential delays during construction. Generally, the project manager has the authority to approve the use of contingency funds. The Project Contingency should not be confused with the Construction Contingency, usually held within a Contractor’s Cost of the Work, or Contract Sum.  The Construction Contingency is available to the contractor to manage routine unforeseen conditions during the construction process.

Guidelines. Project Contingency should be used in a transparent manner, with clear documentation and approval protocols. The use of contingency funds must be supported by project documentation such as change orders. The following cost items should be considered in the project contingency (line 9):

• Potential inconsistencies in soils or foundation conditions
• Unknown conditions in existing buildings
• Potential for delay during construction
• Other contingency considerations based on project complexity and risk factors

When a modification of contractual conditions is desired as distinguished from a change in work scope, contract sum, or contract time the modification is made by change order. Refer such change orders to UCL for approval.

The contract time may be extended by the number of calendar days that certain causes or events prevent work from being completed. All time extensions are granted by means of a change order. Space is provided for stating the adjustment of contract time, if any, on the Change Order form. General Conditions, Article 8, authorizes the granting of an extension of time for delays in completion if six conditions are met. To be eligible for a time extension for delay, the contractor must submit a Change Order Request (see General Conditions, Article 4) to the University's Representative within 3 working days from the date on which a delay begins. The University's Representative is required to determine whether the cause or event identified in the request will prevent the project from being completed by the completion date (as adjusted) and, if so, the number of calendar days that the contract time is extended. Time extensions may need to be granted for delays to completion resulting from ordered changes in the work. See Specifications. 

Allowable Delays. Delays caused by conditions beyond the contractor's control and without the fault or negligence of the contractor may entitle the contractor to an extension of contract time. These delays are:

• Fire.
• Strikes, boycotts, or obstructive actions by employees or labor organizations.
• Acts of God.
• A man-made unforeseen site condition.
• An error or omission in the contract documents.
• The University's change of scope of the work.
• The University's decision to suspend the work.
• The failure of University or University's Representative to timely perform any contract obligation.

Non-Allowable Delays. Delays of the completion of the work beyond the expiration of the contract time and resulting from causes other than those listed under "Allowable Delays," above, or "Compensable Delays," below result from causes under control of the contractor. Non-allowable delays are:

• A naturally occurring unforeseen site condition.
• The financial inability, misconduct, or default of the contractor, a subcontractor, or supplier.
• The unavailability of materials or parts.

Compensable Delays. Compensable delays are events caused by the negligence or acts of the University, its employees, or of the University's Representative. These delays may entitle the contractor to an adjustment of the contract time and the contract sum. Compensation for delays is limited to adjustments to the contract sum as determined by General Conditions. Examples of compensable delays include, but are not limited to, the following:

• Change in the scope of the work.
• Errors or omissions in the contract documents.
• Lack of timely direction, problem resolution, or approvals by the University's Representative.
• Stopping the work for University's convenience.

In general, a delay is an occurrence that stops or detains the work for a period of time. Some delays adversely affect work completion, and an extension of the contract time may be granted. Other delays either do not affect work performance, do not prevent timely completion, or may be the responsibility of the contractor, and a time extension must not be granted (see Time Extensions Resulting from Delays). The University's Representative is designated as the initial interpreter of the contract documents. The University's Representative, therefore, determines whether a timely request for a time extension has been made and, if so, whether there has been cause for delay. The University's Representative then determines if a time extension may be granted and the length of the extension. Use the following guidelines to evaluate proposed time extensions:

1. To be eligible for a time extension, the contractor must submit to the University's Representative a written change order request for a stipulated time extension within 3 working days of the beginning of a delay. If the University's Representative approves the contractor's request, a change order that adjusts the contract time is issued.
2. Any extension of time relieves the contractor from the assessment of associated liquidated damages for the period of the time extension (see Liquidated Damages).
3. To be eligible for a time extension under General Conditions, Article 8, the contractor must meet the six conditions listed. These conditions are: 
   1. When the event causing the delay commences, the contractor has complied with all the contract requirements.
   2. The delay is critical.
   3. The delay is supported by the contract schedule.
   4. The contractor submits a change order request within 3 working days of the date the contractor discovers the cause of the delay.
   5. The delay is not caused by any of the three causes listed in Time Extensions Resulting From Delays "Non-Allowable Delays."
   6. The delay is caused by one or more of the eight causes listed in Time Extensions Resulting From Delays, "Allowable Delays."
4. If two or more events occur at the same time and delay the work, the contractor may be entitled to a time extension unless the contractor is responsible for all the events. If a delay that is the contractor's responsibility occurs concurrently with a delay that is the University's responsibility or that is not the responsibility of either party, a time extension may be granted to the extent of the duration of the excusable delay. A time extension granted for concurrent delays cannot be computed consecutively in any case.
5. If strikes, boycotts, or like obstructive actions not caused by any act or conduct of the contractor delay a work activity on the critical path schedule, a time extension may be granted. The fact that trade strikes during the course of work is not an automatic ground for a time extension. For example, if elevator workers go on strike for 30 days during the middle of a two-year project, but the strike does not affect work activity on the critical path schedule, a time extension is not to be granted.
6. A shortage or delayed delivery of materials is not an authorized ground for a time extension unless the shortage or delay was caused or contributed to by the University.
7. The contractor may be granted a time extension if a change in the scope of the work adversely affects work activity on the critical path schedule of the contractor.
8. The contractor may be granted a time extension if Beneficial Occupancy adversely affects a work activity on the critical path schedule or prevents the completion of the work as scheduled.
9. The contractor may be granted a time extension if the work of another contractor, under separate contract with the University, adversely affects a work activity on the critical path schedule of the contractor.
10. If a work activity on the critical path schedule is delayed by a denial of site access, lack of timely approvals or the like, the contractor may be granted a time extension for the period of effect of such a delay. Delays caused by the contractor or subcontractors cannot be the basis for a time extension.
11. The contractor may be granted a time extension if a work activity on the critical path schedule is delayed by errors or omissions in the contract documents or by lack of timely direction, problem resolution, or approval by the University's Representative.
12. Minor field changes, instructions, or clarifications cannot be the basis for a time extension unless the change extends the critical path past the completion date.
13. The contractor may be granted a time extension if alternates quoted in the bid form are exercised after the contract is awarded, and such alternates include adjustments of the contract time.

Document the effective date and length of a delay to prevent the possible overlapping of time extensions from various causes. Effective dates of time extensions granted are extremely important information in the event that disputes arise about alleged delays or the timely completion of the work. Grant an extension of time for only the period of effect of a delay, and if two delays occur on the same date, grant only one calendar day of time extension.

Arriving at a New Completion Date. The contract time is based on calendar days. General Conditions, Article 14, implies that the work is normally performed only on weekdays. The total number of days required to complete the work is therefore determined by estimating the number of workdays (weekdays) and then by adding intervening Saturdays, Sundays, and holidays.

The completion date would then be determined by adding those calendar days to the previous completion date. For example, if the original contract time is 365 days, and the scope of the work was increased by change order that took the contractor six working days to perform, the time extension granted would be for eight days, and the new completion date would be determined by adding those eight days to the previous completion date.

A time extension may result from a claim made by the contractor as stated in General Conditions, Article 4. The University's Representative makes decisions on such claims, and a time extension may be granted as a result of the University's Representative's interpretations or decisions required by the provisions of General Conditions, Article 4. Either the contractor or the University may appeal the University's Representative's decision on a claim. The appeal may go to mediation or litigation (see Contractor Claims). The settlement or court may award a time extension or may increase or decrease given time extensions.

The dictionary defines "monitoring" as (1) checking systematically or scrutinizing for the purpose of collecting specified categories of data, and (2) keeping watch over; supervising. The above meanings apply to project monitoring of University construction projects. The extent of needed project monitoring is determined by the Facility. Except for the contract schedule, which is monitored by the University's Representative, project monitoring is mainly performed by the Project Manager.

The specifications requires the contract schedule to be updated monthly by the contractor to reflect actual construction progress. By looking at an approved updated contract schedule, the University's Representative can determine the approximate state of completion of each portion of the work. Another important use of the contract schedule is for analyzing the validity of delay claims (see Time Extensions Resulting from Factors Other Than Delays). General Conditions, Article 8, provides for extension of contract time for delays in progress of the work. A current updated contract schedule allows the University's Representative to determine if a delay is in an activity that will actually impede the completion of the project. The contract schedule is also used to compare the actual construction time to contract time, and the schedule is used for evaluating the percentage of completed work activities when the Facility processes the contractor's monthly Application for Payment.

The University applies provisions of the California Labor Code, Sections 1771 through 1775, 1776, 1777, 1777.1, 1777.5, 1777.7, and 3077 and California Code of Regulations, Title 8, Chapter 8, Subchapter 4 - Sections 16423, 16433, 16450 and Subchapter 4.5 – Sections 16450-16455 to certain University construction and maintenance contracts pursuant to the Guidelines below. Two items in the code, "Prevailing Wage Rates" and "Apprentices," are set forth in General Conditions and the Supplementary Conditions.

Guidelines for the Payment of Prevailing Wage Rates on Construction and Maintenance Contracts. The requirements for payment of prevailing wage rates on construction and maintenance contracts for public works projects are defined by Section 1720 et seq. of the California Labor Code. The University, in certain situations, must require payment of prevailing wage rates on construction and maintenance contracts. The University also requires the payment of prevailing wage rates in some other situations where an exemption from the prevailing wage requirements could be claimed. These guidelines set forth when the University will require payment of prevailing wage rates.

The following guidelines apply to all construction and maintenance contracts exceeding $1,000 located in the state, and involving the University:

1. The University will require payment of prevailing wage rates by contractors and subcontractors on construction and maintenance contracts: 
   1. Contracted for using University contract documents, or any other contract documents, and for which any portion of the funds are furnished by the state.
   2. Paid for with funds not furnished by the state and contracted for using University contract documents.
   3. Contracted without using University contract documents; but the University owns the underlying land and the University is the manager of the project.
   4. The University will be a lessee using more than 50 percent of the assignable square feet of the project in which the construction will be performed regardless of the source of funds, land ownership, or contract documents used.
2. The University will not require payment of prevailing wage rates by contractors and subcontractors on construction or maintenance contracts undertaken by developers on Facility land or on property of The Regents, including inclusion area land, where the project cannot, in the sole determination of the responsible University administrator, be constructed economically or practically if the payment of prevailing wages is required, and where either of the following conditions exist: 
   1. The cost will be paid entirely by non-state funds furnished principally by students, faculty, staff, hospital patients, outside corporations, or donors or where the construction or maintenance contract is funded by loans which will be repaid by any of the above.
   2. The project is built for sale or lease to students, faculty, or staff without any funds being furnished by the state.
3. Upon an appropriate showing of exceptional need, the University's Executive-Chief Financial Officer may authorize an exception to the prevailing wage requirements of these guidelines that permits a construction or maintenance project to proceed without the payment of prevailing wages.
4. As used herein, a contract will be considered a construction contract only if its performance requires a license under California's Contractor's License Law.

Requirements When the University Must Pay or Agrees to Pay Prevailing Wage Rates. Wage rates are made a part of the contract by reference to a wage scale in the General Conditions. A copy of the current wage schedule is to be kept on file and available for inspection in the Facility's facilities management office.

The director of the California Department of Industrial Relations (DIR) is responsible for determining the general prevailing wage rate of per diem wages ("wage rates"). Each Facility must research the appropriate prevailing wage rates by contacting the DIR and/or referring to the DIR. 

Monitoring of Prevailing Wage Rates. The University is not required to monitor the contractor's payment of prevailing wage rates, except during projects funded in whole or in part by bonds issued by the State of California, as described below. The monitoring process is usually performed by labor unions or others. However, if the University requires the payment of prevailing wage rates, random checks must be made to determine if the contractor is meeting the contract requirements.

If a complaint is received regarding contractor noncompliance with prevailing wage rates, review the contractor's certified copy of the payroll records.

Projects Funded by State-issued Bonds.  The University is required to monitor and enforce compliance with prevailing wage laws on all projects funded in whole or in part with bonds issued by the State of California where the contract is awarded after January 1, 2012. The University will operate a systemwide Labor Compliance Program (LCP) for all affected projects at all locations.  Every Facility must have a designated Labor Compliance Officer who is knowledgeable about the LCP requirements.  Any Facility that would like assistance in performing the tasks required by the LCP can request assistance from another Facility with more experience and/or a larger staff.  The University will be required to inform contractors and subcontractors of the labor compliance requirements at a pre-job conference, review certified payrolls at least monthly and audit where necessary, verify proper posting of job site notices and conduct job site interviews, among other activities.  The University’s approved Labor Compliance Program document is at UCOP website. The DIR provides further information. Special language found within the University-approved contract templates must be added to the Supplementary Conditions of any contract for a project where labor compliance monitoring is required. The University is required to withhold payments to contractors when an underpayment of wages is noted and when payroll records are late or incomplete.

The contractor forfeits to the University a penalty for each calendar day or portion thereof, for each worker that is paid less than the specified rates. The amount of this forfeiture is determined by the Labor Commissioner. The contractor also pays to each worker an amount equal to the difference between the specified rate and the amount that was paid to the worker.

UC Fair Wage. Minimum wage for direct and service contract employees of the University of California is $16.50 as of April 1, 2024. More information is provided on the University of California website.

Projects Funded by Inflation Reduction Act (2022). Projects pursuing Inflation Reduction Act (IRA) funding such as 179D or Investment Tax Credit (ITC) must pay both Federal and State Prevailing wage. Contract modification language must be added to any contract pursuing this funding and can be found here. Payroll records demonstrating compliance must be submitted through LCP Tracker. 

The contractor and all subcontractors must keep an accurate payroll record, showing each person's name, address, and Social Security number or classification; straight-time and overtime hours worked each day and week; and the actual hourly wages paid to each journeymen, apprentice, worker, or other employee employed in connection with the work. These payroll records must be certified and submitted electronically to the University using designated software at such times as directed. In addition:

• A certified copy of an employee's payroll record must be made available for inspection or furnished to such employee or the employee's authorized representative on request.
• A certified copy of all payroll records must be made available for inspection upon request by the University, the Division of Labor Standards Enforcement, and the Division of Apprenticeship Standards of the Department of Industrial Relations.
• A certified copy of all payroll records must be made available upon request to the public for inspection, or copies thereof made, provided that the request by the public is made to either the University, the Division of Apprenticeship Standards, or the Division of Labor Standards Enforcement. The public cannot be given access to such records at the principal offices of the contractor or subcontractors. Any copy of records made available for inspection to the public must be marked or obliterated in such a manner as to prevent disclosure of an individual's name, address, and Social Security number. The name and address of the contractor or subcontractors awarded the contract or performing the work must not be marked or obliterated.

The contractor must file a certified copy of the payroll records with the entity that requested the records within 10 days after receipt of a written request. The contractor informs the University of the location of such project payroll records, including the street address, city, and county, and shall, within five working days, provide a notice of change of location and address of such records.

In the event of contractor noncompliance with the requirements of the General Conditions or with Labor Code, Section 1776, regarding the submission or inspection of payroll records, the contractor has 10 days in which to comply following receipt of written notice specifying what is required of the contractor. Should noncompliance still be evident after the 10-day period, the contractor forfeits a monetary penalty for each calendar day, or portion thereof, for each worker, until strict compliance is accomplished.

Violations With Intent To Defraud and Willful Violations. Labor Code, Section 1777.1, addresses violations with intent to defraud and willful violations. The Labor Commissioner determines such violations and will direct the University on what action to take. Section 1777.1 states:

1. Whenever any contractor or subcontractor performing a public works project pursuant to this chapter is found by the Labor Commissioner to be in violation of this chapter with intent to defraud, except Section 1777.5, the contractor or subcontractor or any firm, corporation, partnership, or association in which the contractor or subcontractor has a substantial interest shall be ineligible to bid on or to receive any public works contract for a period of not less than one year or more than three years. The period of debarment shall run from the date the determination of the violation is made by the Labor Commissioner.
2. Whenever any contractor or subcontractor performing a public works project pursuant to this chapter is found by the Labor Commissioner to be in willful violation of this chapter, except Section 1777.5, the contractor or subcontractor or any firm, corporation, partnership, or association in which the contractor or subcontractor has a substantial interest shall be ineligible to bid on or to receive any public works contract for a period up to three years for each second and subsequent violation occurring within three years of a separate and previous willful violation of this chapter. These periods of debarment shall run from the date the determination of the violation is made by the Labor Commissioner.
3. Any determination by the Labor Commissioner shall be made after a full investigation by the Labor Commissioner and a fair and impartial hearing and reasonable notice.
4. A willful violation occurs when the contractor or subcontractor knew or reasonably should have known of his or her obligations under public works law and deliberately fails or refuses to comply with its provisions.
5. The Labor Commissioner shall promulgate rules and regulations for the administration and enforcement of this section, the definition of terms, and appropriate penalties. See California Labor Code, Section 1777.1.

A list of contractors that have been debarred and are not eligible to bid on public works projects as a result of violations of Labor Code provisions governing prevailing wage and apprenticeship is available on the DIR website. The Facility can check this list to verify if a potential bidder is eligible.

Only apprentices as defined in California Labor Code Section 3077 who are in training under apprenticeship standards and written apprentice agreements under Chapter 4, Division 3, of the Labor Code are eligible to be employed by the contractor and subcontractors as apprentices. The employment and training of each apprentice must be in accordance with the provisions of the apprenticeship standards and apprentice agreements under which the apprentice is training.

Every apprentice must be paid the standard wage to apprentices under the regulations of the craft or trade in which the apprentice is employed and be employed only at the work of the craft or trade to which the apprentice is indentured.

When the contractor or subcontractors employ workers in any apprenticeship craft or trade for the work, the contractor or subcontractors apply to the joint apprenticeship committee administrating the apprenticeship standards of the craft or trade, in the area of the site of the work, for a certificate approving the contractor or subcontractors under the apprenticeship standards for the employment and training of apprentices.

The committee issues a certificate fixing the number of apprentices or the ratio of apprentices to journeymen employed in the craft or trade for the work. The ratio cannot exceed that stipulated in the apprenticeship standards under which the joint apprenticeship committee operates, but in no case the ratio be less than one hour of apprentice labor for each five hours of journeymen labor, except as permitted by law.

The contractor or subcontractors, upon the issuance of the approval certificate in each such craft or trade, employs the number of apprentices in the ratio of apprentice labor hours to journeymen labor hours fixed in the certificate, or the contractor or subcontractors must present an exemption certificate issued by the Division of Apprenticeship Standards.

If the contractor or subcontractors employ journeymen or apprentices in any apprenticeship craft or trade in the area of the site of the work, and there exists a fund for allaying the cost of the apprenticeship program in that trade or craft, and other contractors in the area of the site of the work are contributing to that fund, the contractor must also contribute to the fund.

The contractor violates the construction contract if the contractor willfully fails to comply with General Conditions, Article 14. Nothing contained in General Conditions - Article 14, prohibits or prevents the hiring by the contractor or subcontractors of journeymen-trainees who may receive on-the-job training to enable them to achieve journeymen status in any craft or trade under standards other than those set forth for apprentices.

Required Notification. Labor Code, Section 1773.3, "Notifications of Award of Public Works Contract and of Discrepancy in Apprentices Journeymen Ratio," states:

An awarding agency whose public works contract falls within the jurisdiction of Section 1777.5 shall, within five days of the award, send a copy of the award to the Division of Apprenticeship Standards. When specifically requested by a local joint apprenticeship committee, the Division shall notify the local joint apprenticeship committee regarding all such awards applicable to the joint apprenticeship committee making the request. Within five days of a finding of any discrepancy regarding the ratio of apprentices to journeymen, pursuant to the certified fixed number of apprentices to journeymen, the awarding agency shall notify the Division of Apprenticeship Standards.

On contracts to which Labor Code, Section 1777.5, applies (see Prevailing Wage Rates and Fair Wage ), the University is required to file a notice with the director of the Division of Apprenticeship Standards within five days of contract award. The division supplies Form PWC 100 for filing this notice electronically or by mail.

Exemptions From Apprenticeship Standards. California Labor Code, Section 1777.5, lists the categories of contractors exempted from apprenticeship standards. Section 1777.5 states, "This section shall not apply to contracts of general contractors involving less than thirty thousand dollars ($30,000) or 20 working days or to contracts of specialty contractors not bidding for work through a general or prime contractor involving less than two thousand dollars ($2,000) or fewer than five working days."

Penalties For Noncompliance With Apprenticeship Standards. Labor Code, Section 1777.7, provides for the following penalties in instances of noncompliance with established apprenticeship standards:

• A contractor who willfully fails to comply with certain provisions regarding the employment of apprentices is denied the right to bid on public works contracts for a period of one year.
• The University, under specified circumstances, is required to withhold from contract progress payments  due or to become due, the sum of $5,000 until released on the order of the Administrator of Apprenticeship, or until completion of the contract.

Monitoring Contractor Compliance. The Facility monitors applicable contracts for contractor compliance with General Conditions, Article 14. The Facility sets up administrative procedures to make certain the contractor is complying with the contract apprenticeship requirements. The requirements of apprenticeship standards are explained at the pre-bid conference.

Projects Funded by Inflation Reduction Act (2022). Projects pursuing Inflation Reduction Act (IRA) funding such as 179D or Investment Tax Credit (ITC) must comply with both Federal and State Apprenticeship requirements. Contract modification language must be added to any contract pursuing this funding and can be found here. Payroll records demonstrating compliance must be submitted through LCPTracker. 

Hospital projects require special monitoring to meet Department of Health Care Access and Information (HCAI) requirements and to meet other hospital-related construction requirements set forth in the Specifications.

See Health and Safety Code, Part 7, Chapter 1, Health Facilities, commencing with Section 129675, known as the Alfred E. Alquist Hospital Seismic Safety Act of 1983 (Alquist Act); and SB 1953 (Chapter 740, 1994), chaptered into statute in Sections 130000 through 130070  of the Alfred E. Alquist Hospital Facilities Seismic Safety Act. 

Hospital safety standards and inspection requirements are set forth in Hospital Safety Standards and Inspection. Facilities management personnel must monitor the fulfillment of these requirements to make certain the project does not fall behind schedule because of HCAI reviews and approvals. All contacts with HCAI shall be made by facilities management personnel; therefore, items required to be submitted by the inspector, design professional, or contractor, shall be processed with HCAI by the Facility's facilities management office.

The Facility must monitor the contractor's compliance with special hospital requirements set forth in the Specifications such as:

• Infection control.
• Sign protection.
• Work hours.
• Protective covers.
• Daily cleanup.
• Barricades.
• Advance notices for shutdowns.
• Observation of construction by the University's Representative.

Projects are expected to monitor issues that may pose risks to schedule, budget, or quality.  The project team should track risks and regularly assess them.  Potential actions to mitigate risks should also be tracked, and potential triggers for instigating responses should be identified.  Specific tracking tools may include a Project Risk Register, containing information about risk probability, impact, and events that would lead to the risk becoming an actual threat to a project. A Risk Report should be developed that contains identified risks, potential responses, and risk lead responders who would take control of implementing a risk response plan. Mitigating actions should be considered before a risk becomes real.  In some cases, a minimal cost or effort could be enough to mitigate a risk before it truly develops.  In other cases, the cost of mitigation may be substantial, and a trigger should be identified where the risk becomes great enough to enact the mitigating measure (see RD - Risk Monitoring Report). 

The Facility is responsible for making prompt payments to the contractor for work performed. This chapter discusses payments from application by the contractor to actual payment by the Facility after consideration of retention, stop notices, and liquidated damages.

Within 10 days after receipt of the Notice of Selection as the Apparent Lowest Responsible Bidder, if required by the contract, the contractor is required to submit to the University a breakdown of all costs that constitute the contract sum. This cost breakdown must itemize as separate line items the cost of each work activity and all associated costs, including but not limited to warranties, as-built documents, overhead expenses, and the total allowance for profit. Insurance and bonds shall each be listed as separate line items. The Cost Breakdown form is Schedule 1 of the contractor's Application for Payment, which is submitted monthly. The costs listed for each activity on the Cost Breakdown form do not change during the course of construction; they are the basis for determining the amount due the contractor each month. Each work activity is compared to the percentage of completion for that line item. The sum of those amounts, minus the amount previously paid, minus retention and other deductions, equals the amount due.

The University will pay the contractor monthly an amount equal to 95 percent (95%) of the cost of the work in place; the remaining 5 percent (5%) is held as retention.

The contractor starts the monthly payment process by preparing an Application for Payment on the University-approved form. The contractor must itemize the application using the Cost Breakdown submitted with the construction Agreement, as modified by fully executed change orders. The University's Representative participates in the preparation of the application by holding a monthly progress payment meeting where agreement is reached on the percentage of work completed. When the work is found to be complete, the contractor makes a final Application for Payment.

The Certificate for Payment is a document prepared by the University's Representative that authorizes payment to the contractor. The University's Representative must certify that the application is correct and must check the accuracy of the following:

• Percentage of work complete for each line item. Arithmetic for the entire form including the cost breakdown of the contract sum (see Cost Breakdown).
• The University's Representative must also verify that the items listed in General Conditions, Article 9, have been accounted for in the preparation of the certificate. The certificate is prepared on the University-approved form and submitted to the appropriate Facility office for signature and processing.
• The University's Representative must be made aware that time restrictions are specified in General Conditions, Article 9, to ensure that the payment is processed in a timely manner.

Retention of a portion of the cost of work in place is held by the University as leverage to ensure that the work is completed and also as protection should the contractor fail to pay subcontractors or suppliers. Retention differs from the withholding of funds due to incomplete or defective work or other similar conditions listed in General Conditions, Article 9.

University withholds 5 percent (5%) of the monthly progress payment due the contractor and retains those funds in the construction account, or an escrow account as noted below.

Instead of withholding a percentage of the contractor's progress payment, the contractor may deposit into an escrow account securities in the amount of the required retention. If the contractor chooses this procedure, the contractor is required to comply with the requirements of General Conditions, Article 9, and the Escrow Agreement. The terms of the Escrow Agreement may not be changed without approval of UCOP and UCL. A letter of credit is not appropriate collateral and cannot be accepted as an item of security to deposit in lieu of retention. At the request and expense of the contractor, the University will deposit retention held in the normal manner (see Normal Retention) directly with an escrow agent. The contractor may direct the investment of such deposited retention into interest-bearing accounts or securities. The contractor and its surety shall be at the risk of failure of the bank selected. (See RD - Flow Chart: Deposit of Securities in Lieu of Retention and Deposit of Retention Into Escrow.)

The final Certificate for Payment is used to detail the amount of retention to be released with the contractor's final payment.

If the contractor fails to complete the work within the contract time, the contractor is assessed as "liquidated damages" and not as a penalty, a sum specified in the Agreement for each day the work remains incomplete beyond the expiration of the contract time. After Substantial Completion the rate will be reduced to the figure specified in the Agreement. Liquidated damages are assessed by making a deduction on the Certificate for Payment. The amount deducted is itemized on the certificate. Liquidated damages may be automatically withheld from the progress payment for each day the project is beyond the contract time. See University policy: "Liquidated Damages for Construction Contracts."

The following procedures should be used for assessing liquidated damages:

1. Inform the contractor during payment determination that liquidated damages will be assessed (a letter is not required).
2. Reduce the amount of payment certified by deducting liquidated damages on the Certificate for Payment.
3. Assess the liquidated damages through the Facility's accounting office. This office will pay the reduced amount on the Certificate for Payment.

A change order is not required to change the contract sum because the mechanics for assessing liquidated damages are already established in the Agreement and the General Conditions.

The General Conditions provide procedures for resolving contractor disputes. The University's Representative is required to review change order requests and render a decision on the request. Mediation or litigation may follow this decision. Continuous negotiation is required throughout the dispute process.

A claim is a written demand or assertion by the contractor seeking adjustment or interpretation of the terms of the contract documents, payment of money, extension of time, or other relief with respect to the contract documents, including a determination of disputes or matters in question between the University and contractor regarding the contract documents or the performance of the work. A false claim is defined in the California Government Code sections 12650 et seq. A representative of the University shall not assert that a contractor has made a false claim without first consulting with the UCL to ascertain the accuracy of such assertion. Any assertion that a contractor has made a false claim must be made in good faith and shall be made only after the aforementioned consultation with General Counsel.

Before asserting a claim, the contractor must submit a Change Order Request.

The contractor submits a Change Order Request if contractor asserts it is entitled to an adjustment of the contract sum or contract time, or other monetary relief, as a result of (1) extra work; or (2) materially differing site conditions; or (3) delays to final completion. The University's Representative makes a final decision on change order requests.

Negotiation is the first step towards and probably the best method of resolving most claims. Successful negotiation results in a resolution that is agreeable to both the contractor and the University; therefore, the University's Representative does not have to make a decision that could be later disputed (see Decision on Claims), and administrative and other costs associated with mediation or litigation are saved. Negotiation may also be used after a decision on the claim is made by the University's Representative.

If negotiation is unsuccessful, the University's Representative issues a decision on a contractor's claim. Failure of the University's Representative to render a decision within a specified time period is deemed a denial of the claim. Either the University or the contractor may dispute the decision of the University's Representative, and may elect mediation or litigation. At any time after the decision by the University's Representative, the University and the contractor may resolve their differences using negotiation or mediation.

Mediation is a voluntary procedure that may be used where both parties agree to use a facilitator to assist them reach a settlement.

If either party to the contract has given a timely notice of election to litigate, either party may litigate a claim or the aggregate of unresolved claims totaling $100,000 or more.

This chapter addresses procedures to follow when the University wishes to occupy or use part of the work before it is completed (Beneficial Occupancy), or when the contractor requests to be relieved of certain responsibilities because the work is mostly completed (Substantial Completion).

Beneficial Occupancy is the term used to describe the procedure when the University occupies or makes use of any part of the work prior to Substantial Completion or, if no Notice of Substantial Completion has been issued, then Final Completion. The presence of the University at the project site may cause disruption of the contractor's activities; therefore, Beneficial Occupancy is subject to conditions set forth in the General Conditions.

The University is not required to take Beneficial Occupancy and may wait for Final Completion to occupy and use the site. However, if the University decides to occupy any portion of the project space prior to Substantial Completion or, if no Notice of Substantial Completion has been issued, then Final Completion, the University is required to issue a RD - Certificate of Beneficial Occupancy. A Certificate of Beneficial Occupancy shall be issued with concurrence of the Designated Campus Fire Marshal and the Certified Building Official if Beneficial Occupancy will occur prior to Substantial Completion.  If the University takes Beneficial Occupancy of a portion of a project, the University assumes maintenance and security for items within that area.  It is important to clearly identify on the Certificate of Beneficial Occupancy what is included within the area and what is not.

Coverage under University's Builder's Risk insurance will end on the date of Final Completion recited in the Notice of Completion filed by University, not on Beneficial Occupancy or Substantial Completion. See Termination of Builder's Risk Coverage.

Substantial Completion means that stage in the progress of the work, as determined by the University's Representative, when the work is complete and in accordance with the contract documents except only for completion of minor items which do not impair the University's ability to occupy and fully utilizing the work for its intended purpose. See RD - Substantial Completion and Contract Closeout Flowchart. 

A Certificate of Substantial Completion shall not be issued until after a RD - Certificate of Occupancy is issued by the Certified Building Official, unless in case of Beneficial Occupancy, all work is in place, all required agency approvals have been received, and all systems and equipment are fully functioning. Minor items (punch list) shall include only patching, repair or replacement, and clean-up. Examples of acceptable punch list items include replacement of light switches, touch-up painting, repair of scratches on walls or floors, replacement of locks which do not function properly, replacement of filters or light bulbs, and other similar items.

The University and contractor agree that items to be finished after issuance of the Certificate of Substantial Completion can be accomplished while the University fully occupies and utilizes the facility for its intended purpose. University may accept responsibility for utilities, security, and maintenance upon the issuance of the Certificate of Substantial Completion.

If contractor gives notice to University's Representative that the Work is substantially complete, unless University's Representative determines that the Work is not sufficiently complete to warrant an inspection to determine Substantial Completion, University's Representative will review the Work, and prepare and give to contractor a comprehensive list of items to be completed or corrected before establishing Substantial Completion. Contractor shall proceed promptly to complete and correct items on the list. Failure to include an item on such list does not alter the responsibility of Contractor to complete all Work in accordance with the contract documents. University's Representative will review to determine whether the Work is substantially complete. If University's Representative's inspection discloses any item, whether or not included on the list, which must be completed or corrected before Substantial Completion, contractor shall, before issuance of the Certificate of Substantial Completion, complete or correct such item. Contractor shall then submit a request for another inspection by University's Representative to determine Substantial Completion. Costs for additional inspection by University's Representative shall be deducted from any monies due and payable to Contractor.

When University's Representative determines that the Work is substantially complete, University's Representative will arrange for inspection by the Designated Campus Fire Marshal, the Certified Building Official, and other officials (e.g., those from Environmental Health and Safety), as appropriate, for the purpose of issuing a Certificate of Occupancy. After a Certificate of Occupancy has been issued by the Certified Building Official, the University's Representative will prepare a Certificate of Substantial Completion on University's form, which, when signed by University, shall establish the date of Substantial Completion and the responsibilities of University and Contractor for security, maintenance, utilities, insurance, and damage to the Construction Work.

The Building Official shall not issue an RD - Certificate of Occupancy without the concurrence of the Designated Campus Fire Marshal. All work must be completed in compliance with building codes and the contract documents.

Builder's risk insurance coverage terminates on the date of Final Completion in the Notice of Completion filed by the University when the construction of the project is complete. (Coverage terminates for a Job Order on the date of Final Completion in the Inspection Acceptance issued by the University, and for all Job Orders on the date of Final Completion in the Notice of Completion for the entire project covered by the JOC contract). If construction of the project is complete at the time of Beneficial Occupancy or Certificate of Occupancy, but the Notice of Completion will not be filed contemporaneously, project managers must so inform their campus contract administrator, UC Risk Services, and the University's insurance broker to determine whether termination of Builder's Risk Insurance coverage is appropriate. Submission of the Request to Extend or Terminate Builder's Risk Insurance at least 10 days prior to the date of termination on the certificate of insurance will prevent an accidental lapse of coverage if construction is not completed by the originally anticipated date and will stop the accrual of premiums if the project is completed early. A Facility will need to provide evidence of completion of construction when requesting cancellation of Builder's Risk insurance for a project.

The University, at its discretion, may reduce the per-diem charge for liquidated damages (see Liquidated Damages) assessed for delays (see Time Extensions Resulting From Delays) that occur after the date of Substantial Completion.

The University standard contract documents have been developed to provide University Facilities with necessary forms, data, and procedures to complete a project. This chapter reviews the procedures required to complete the construction project. See RD - Substantial Completion and Contract Closeout flowchart.

As-built documents are copies of the Drawings, Specifications, and all other contract documents that have been updated by the contractor to reflect changes that occurred since these documents were issued to bidders. Changes could have been made by addendum, field order, change order, or by the contractor's actual construction. The contractor is responsible for ensuring that all changes are documented on the as-built copy of the contract documents kept at the project site. The contractor is required to deliver the as-built documents to the University's Representative as a condition for final payment and the release of retention. The design professional, who may also be the University's Representative, is required to complete the record documents (final copies of construction documents including addenda, bulletins, field orders and other records of changes to the work), stamp and sign the documents and deliver them to the University.  If required by the Executive Design Professional Agreement, the design professional will update the record documents with information from the contractor’s as-built documents.

The University's Representative is responsible for receiving operating and maintenance data from the contractor and for ensuring that the data are complete. When complete, the operating and maintenance data are delivered by the University's Representative to the Facility. Operating and maintenance data are information about the equipment incorporated in the project. Data should include the following:

• Identification of equipment installed.
• Maintenance procedures for each system and each piece of equipment.
• Spare parts lists indicate where parts may be obtained. Included should be the manufacturer or supplier’s name, address, telephone number, and the name of a contact person.
• Installer name, address, telephone number, and the name of a contact person.

General Conditions, Article 12, requires the contractor to correct defective work that becomes apparent during the progress of the work or during the Guarantee to Repair Period. The Guarantee to Repair Period is a period of one year commencing with the date of Beneficial Occupancy, the date of Substantial Completion, or the date of Final Completion, as applicable. A Guarantee to Repair Period longer than one year may be specified. Note that this Repair Period does not limit subsequent claims for patent and latent defects. Contact the UCL for post-guarantee period defective work issues.

Frequently, the Guarantee to Repair Period for selected items is desired for a period longer than one year. In these cases, the Guarantee form included in the Specifications must be used. The University's Representative must check each section of the Specifications to determine if an individual section requires a special guarantee to be submitted. The University's Representative is responsible for assembling and supplying all special guarantees to the Facility.

The University's Representative performs a final inspection upon receipt of written notice from the contractor that the work is ready for final inspection and acceptance. Final Completion shall be when the University's Representative accepts the work as fully completed and in accordance with the contract documents, and a Certificate of Occupancy has been issued by the University's Building Official. The Facility must file a Notice of Completion within 15 days after the date of Final Completion. The date of Final Completion is entered on the Notice of Completion.

The Facility must file a Notice of Completion for contracts over $25,000 according to the following procedures and stipulations: 

• Where to File. Record the Notice of Completion at the County Recorder's Office for the county in which the project is located, and place within the Project file.
• Form to Use. A Notice of Completion form with three versions depending on University's role (owner or lessee) is part of each contract family; only one must be filed and should be used as appropriate for the chosen delivery method. Select the correct version of the Notice of Completion based on the following project scenario:
  • University owns the land and the improvements (typical).
  • University is the lesse, not the owner (e.g., lease).
  • University owns land but not improvements.
• Time for Filing. Record the Notice of Completion within 15 days after Final Completion. If the Notice of Completion cannot be recorded within 15 days after Final Completion, it should not be recorded. It must, however, still be placed in the Project file and forwarded to the contractor to comply with various requirements in the General Conditions.
• Completed Work. The filed Notice of Completion signifies that the work has been completed according to the terms of the contract.
• Completion Includes All Work. All work includes final cleaning (see Determining Substantial Completion), punch list items, operating manuals, as-built documents, warranties, guarantees, and work added by change order. The person signing the Notice of Completion is responsible for determining that the work has actually been completed. The facts stated in the Notice of Completion are declared to be true and correct under penalty of perjury by the person executing the document on behalf of the University.
• The contractor has no obligation to complete work (other than work covered by guarantees or warranties) after a Notice of Completion has been filed. If work required by the contract documents is performed after a Notice of Completion has been filed, the notice is invalid, leaving the Facility vulnerable, since work has been certified as received and warranty or guarantee periods have started. If the Facility wishes to file a Notice of Completion before all of the work of the contract has been completed, then the Facility must execute a deductive change order to exclude the incomplete work from the contract.
• Outstanding Claims. Resolution of outstanding claims is not a condition of contract completion. File the Notice of Completion within 15 days after Final Completion even if outstanding claims are not yet resolved.
• Stop Payment Notices. Filing the Notice of Completion or Notice of Cessation within 15 days of final completion starts the 30-day stop payment notice period. If the Notice of Completion or Cessation is not filed within 15 days of Final Completion, the stop payment notice period is extended 60 days for a total of 90 days from the date of acceptance (Final Completion).
• The University is required to provide stop payment notice claimants with the date of acceptance (Final Completion) of the Project or the recordation of the Notice of Completion or Notice of Cessation. The Project Manager must inform the Campus Plant Accountant of the status of acceptance (Final Completion) and of recordation of the Notice of Completion or Notice of Cessation within fifteen (15) days of acceptance (Final Completion) of the Project. See California Civil Code sections 9200-9208, 9356. 

When the work is found to be complete, the contractor makes a final Application for Payment. The University's Representative then issues a final Certificate for Payment  constituting final acceptance of the work by the University. Final payment and any remaining retention becomes due after the contractor submits the following to the University's Representative:

• Final Application for Payment and all required submittals.
• Conditional releases from contractor and subcontractors entitled to receive any portion of the final payment. (optional)
• As-built documents.
• All operating and maintenance data for equipment installed in the project (see Operating and Maintenance Data).
• All guarantees (see Correction of Defective Work) and warranties from the contractor, from subcontractors, and from suppliers.
• All other submittals required by the contract documents.

The final payment shall be paid not more than 10 days after University's Representative issues the final Certificate for Payment. Retention shall be released 35 days after the Notice of Completion is recorded. Acceptance of final payment by the contractor constitutes a waiver of all claims except those previously made in writing and identified by the contractor as unsettled at the time of final Application for Payment.

A stop payment notice is a legal notice submitted to the University by a construction subcontractor, supplier, manufacturer, distributor, or another party to withhold amounts due the contractor in an amount sufficient to satisfy stop payment claims regarding labor and materials furnished to the contractor for the work. Stop payment notices are processed by the Facility's accounting office, and stop payment notice procedures are given in the University of California Accounting Manual. Stop payment notices received by the Facility must be sent in a timely fashion to the Facility's accounting office. The Facility withholds funds equal to 125 percent of the stop payment notice amount. The bidding documents must specify the office name and address where stop payment notices and preliminary notices are to be received for the project. This information is to be included in the Project Directory. Procedures for Stop Payment Notices regarding plant accounting are available in the plant accounting policy document.

This chapter addresses procedures required by the Facility that extend beyond the requirements of the construction contract.

When each capital improvement project is completed, and the account containing the project funds is closed out, the project budget is amended as required to show actual costs in each category.

Post-Grant Administration. Contact the applicable grant agency or agencies to verify that all reviews and approvals have been completed.

Post-Construction Space Audit. Contact the applicable federal grant agency to ensure that all post-construction space audits have been completed.

The state civil code establishes specific obligations of the contractor to correct defective work, that is, patent and latent defects.

A patent defect is a defect that is known or observable during the course of construction and before Final Completion. A latent defect is a defect that is not visible or active during construction or before Final Completion. The California Code of Civil Procedure Sections 337.1 and 337.15 contains statutes of limitations on patent and latent defects. For patent defects, the University has the right to recover damages up to four years after the defect is discovered. For latent defects, the University has the right to recover damages up to 10 years after the date of Final Completion.

Defects and deficiencies are sometimes discovered by Facility operation and maintenance personnel during the Guarantee to Repair Period or within the statutes of limitations for correcting defects. Defects and deficiencies must be reported to UCL. The procedures for reporting defects and deficiencies are contained in Volume 6: Plant Operations and Maintenance because the project is turned over to the Facility's operation and maintenance department upon Final Completion.

Defects or deficiencies in the work may result from inadequate design or poor construction. The statutes of limitations discussed in Patent and Latent Defects apply to property damage but not to personal injury. There is no statute of limitations for personal injury damage. For example, if a wall collapses 20 years after the wall is completed, and the reason for the collapse is found to be inadequate design, the design professional is still liable for any personal injury caused.

During the eleventh month following substantial completion or final completion, the University conducts a walk-through for the purpose of detecting deficiencies and reviewing guarantees, warranties, bonds, and service and maintenance contracts. A list of all deficiencies noted must be issued to the contractor along with instructions to make corrections as required and in accordance with the terms of the General Conditions of the construction contract.

This chapter sets forth requirements and procedures for establishing the construction phase portion of a Project Quality Management Program. Quality requirements for construction projects are established first by The Regents, next by the President, and then by the Facilities. Quality is measured by conformance to requirements established by facilities management personnel. Project quality is ultimately appraised by the Facility client.

The goal of the construction phase of the Project Quality Management Program is to ensure that the construction of a project meets the quality requirements established by a Facility. To accomplish this goal, facilities management personnel must perform the following functions for the project team to ensure the desired quality of the constructed project:

• Establish requirements
• Build teamwork
• Supply resources
• Evaluate performance

During the pre-design and construction phase the project team should consist of the following principal parties and their associates:

1. University 
   • Client
   • University's Representative
   • Planning staff
   • Budgeting staff
   • Facilities management staff
   • Facility Fire Marshal
   • Facility police
   • Facility environmental, health, & safety staff
   • Project Manager (University employee)
   • Project Manager (outside professional)
   • Construction Manager (outside professional or University employee)
2. Design Professional 
   • Executive design professional
   • Design professional's consultants
   • University design consultants
3. Constructors 
   • Construction contractor
   • Subcontractors
   • Project representatives
   • Construction Manager (acting as contractor)

During the construction phase, a Project Quality Management Program includes the following:

• Quality management planning and implementing policies, procedures, and requirements.
• Quality control, ensuring that work is being performed and that work is being checked prior to its acceptance.
• Quality assurance verifying that quality control tasks are being performed.
• Continuous quality improvement, continually pursuing improvement in the quality of the construction process.
• Quality costs redoing a construction item, even when this increases the item's cost.

The first and most basic step in establishing the construction phase portion of the Project Quality Management Program is to formulate written requirements that specify the roles and responsibilities of project participants. The Facilities Manual establishes basic University requirements; additional requirements should be established by the respective Facility or by the project team through a partnering effort.

A Project Quality Management Program should not only address technical issues but should also address people-related issues and encourage teamwork. Construction technical issues include checklists, inspections, interdisciplinary plan checks, other reviews, and possibly value engineering. People-related issues include encouraging commitment to the project, building teamwork, defining expectations, and "partnering.” Cooperation within the project team should have started early in the project process.

In the context of the construction phase portion of a Project Quality Management Program, "partnering" means:

• Defining expectations of the University, the design professional, and the Contractor's project manager or construction manager.
• Reviewing procedures ensuring that procedures reflect each project team member's expectations.
• Resolving conflicts reviewing and modifying mechanisms set up early in the project for resolving conflicts and for periodic progress reviews.

At minimum, the Facility should provide the budget, personnel, and time necessary to meet quality requirements for each project phase (see Program Requirements and Procedures). This task is accomplished through decisions made by facilities management staff.

Periodically during active construction and upon completion of the construction phase, members of the project team should evaluate the team's performance as a whole. In evaluating a project for quality, the project team should:

• Define expectations.
• Define problems.
• Determine what is needed to rectify problems.
• Estimate needed resources.
• Determine if the project cost or program needs refining.

Team evaluation will assess team performance in accomplishing project quality goals by considering the team's:

• Effectiveness in relation to established quality requirements.
• Efficiency (staying within budget).
• Timeliness (remaining on schedule).
• Compliance with imposed constraints as stated in policies, procedures, and programs.
• Teamwork.

Evaluations can be made by completing evaluation forms predesigned with questions and data entry requests developed on an objective basis.