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The bid bond prequalifies the principal and provides the necessary security to the owner (or general contractor), also known as the “obligee”. This helps prequalify contractors and protects the bid letting by guaranteeing that the principal will enter into the contract, for the amount of the bid, if it is awarded.
Construction bidding is the process of submitting a proposal to undertake, or manage the undertaking of a construction project. The process starts with a cost estimate from blueprints and material take offs .
The EPC contractor coordinates all design, procurement and construction work and ensures that the whole project is completed as required and in time. They may or may not undertake actual site work. EPC companies are often used in large-scale projects, such as power plants, refineries, chemical processing facilities, infrastructure projects, and ...
Construction law builds upon general legal principles and methodologies and incorporates the regulatory framework (including security of payment, planning, environmental and building regulations); contract methodologies and selection (including traditional and alternative forms of contracting); subcontract issues; causes of action, and liability, arising in contract, negligence and on other ...
A retention is money withheld by one party in a contract to act as security against incomplete or defective works. They have their origin in the Railway Mania of the 1840s but are now common across the industry, featuring in the majority of construction contracts. A typical retention rate is 5% of which half is released at completion and half ...
In traditional construction contracts (known as design–bid–build contracts) the principal contractor is only engaged when a detailed design is complete. An invitation to tender is published and a number of contractors will price the construction of the design, from which a single winner will be chosen to complete the works. Contractors are ...
In the United Kingdom, performance bonds [6] are commonly required for construction projects. These bonds provide financial security and peace of mind for all parties involved in the project, including the contractor, project owner, and suppliers. Performance bonds ensure that the contractor completes the project as specified in the contract.
A bill of quantities is a document used in tendering in the construction industry in which materials, parts, and labor (and their costs) are itemized.It also (ideally) details the terms and conditions of the construction or repair contract and itemizes all work to enable a contractor to price the work for which he or she is bidding.