(f) Time of Completion.-A time of completion should be specified in the contract. If time is of the essence, the contract should so state and a liquidated damages clause should be included. (g) Method and Result.—It is improper to specify both the specific method and a guaranteed result for a particular operation. If the results are specified and a method of construction is desired, the method should be in the form of a suggestion for adoption in the contractor's discretion. In such instances, however, any alternate method suggested by the contractor should be subject to the approval of the owner. (h) Unit Price Payments.-Extreme care should be utilized in phrasing the payment items for unit price contracts. They must be carefully correlated with typical details for pay items shown on the plans, and should clearly indicate the method of measurement to be employed. (i) Performance, Payment Bond.-Performance and payment bond in the amount of 100 percent of the contract price shall be required by the owner. (j) Damage to Property.-The contractor should be responsible for damage to property consisting of structures, materials, and supplies required for the work until acceptance by the owner. The contractor should be relieved of responsibility for completed work upon acceptance by the owner. Builders Risk insurance in the name of the contractor and the owner as his interest may appear shall be furnished and paid for by the contractor or owner at the owner's option. (1) The following forms of casualty insurance with minimum liability limits based on exposure should be carried by the general contractor and all subcontractors: (1) Statutory Workmen's Compensation (2) Contractor's Public Liability and Property Damage (3) Automobile Public Liability and Property Damage. 4. BIDDING (a) Advertsing.-Bids must be solicited by public advertisement in newsapers or trade publications. (b) Contract Documents.-Each Prospective bidder should be furnished at least one set of the contract documents. In unusual cases where bidding time is short or the work is complicated, it may be to the owner's interest to provide one or more additional sets. If the bidder desires further additional sets for preparing his bid, the engineer should provide them to him at cost. The bidder should be allowed to retain this set or sets until the contract has been let, or until he is definitely out of the competition, whereupon the documents shall be returned to the engineer. Where local practice dictates, a deposit should be required on each set of bidding documents issued, to be refunded to him upon prompt return of the documents in good condition. The contract documents should be available for examination by prospective bidders, sub-bidders and material suppliers at the engineer's or owner's offices, or at other central locations. Documents should be issued, however, only from one office and an accurate public list of the names and addresses of those taking documents should be maintained. (c) Composition of Contract Documents.-Ordinarily, a complete set of contract documents consists of at least the following: (d) Notice to Contractors.-The advertisement or Notice to Contractors should give the owner's name, location and general nature of the work, the approximate quantities of the major items, the time and place for the receipt of bids, and the availability of contract documents. (e) Instructions to Bidders.—Instructions to bidders should give detailed instructions as to the method and form of bidding and award. (f) Proposal Forms.-Proposal forms should be prepared by the engineer and copies furnished to each prospective bidder for submission of his bid, including one for his own records. Proposal forms should be addressed to the owner, provide for the signature by the bidder and contain a statement that the bidder proposes to undertake the work for the amount or amounts stated. In unit price contracts, the approximate quantities, the designation of the item and the unit of measurement for each item should be indicated in a schedule of unit prices in tabular form. Space should be provided for the insertion of each unit price, a column for the extensions and one for the estimated total price. In all cases, it is preferaable that bid prices submitted by the bidder be both in figures and in writing. The written price shall govern. (g) Bid Rejection.-Bids which are not submitted on the specified form of proposal should be rejected. (h) Alternate Methods and Quantities.-Alternate methods of construction and quantities of work should be requested only where they are believed to be of special importance as a means of insuring a bid within a limited sum. (1) Time for Preparation.-A reasonable time should be allowed for preparing bids. In general, this should be not less than three weeks. In large or complicated work a longer time may be desirable. If extension of the time for bidding becomes necessary, bidders should be notified of the new opening date at least four days prior to the original opening date. Adequate time in which to prepare estimates is essential to sound and effective price competition. Except in cases where speed is an urgent necessity, it will be unwise to attempt to save a few days by unduly curtailing the time allowed to contractors and sub-contractors for the preparation of their bids. It is equally important that bidders should take full advantage of the time allowed. So far as practicable, engineers should cooperate to avoid conflict of bidding dates for important projects. (j) Bid Delivery.-Bids should be delivered at a designated place and not later than a designated time, but not on a legal holiday or the day following. Bids should be opened and read in the presence of bidders and a tabulation of all bids received should be furnished to each bidder. (k) Award of contract should be made without delay.-Under no circumstances should a bidder be permitted to alter his bid after the time designated for receipt of bids. (1) Right to Reject Bids.-The owner should reserve the right to reject any or all bids for justifiable reasons. (m) Bid Guarantee.-A bid guarantee should be required to compensate the owner for losses suffered in the event an irresponsible bidder submits the low bid. Bid guarantees may be in the form of certified checks or bid bonds, generally in an amount not in excess of 10 percent of the bid. (n) Identical Information.-Extreme care should be taken that all prospective bidders base their bids on identical information. To that end, the engineer, owner or others familiar with the work should not make interpretations of the contract documents in reply to questions from bidders except in writing in the form of addenda. Addenda should be issued where questions arise which might affect the bids. The engineer should be certain that all prospective bidders receive the addenda and they should be delivered either by hand or by registered mail. Addenda should be issued for receipt by the bidders not less than four days before the time which bids are to be received. Receipt of addenda should be acknowledged as part of the bid submitted. 5. SEPARATE CONTRACTS (a) Establishing Responsibility. When all work necessary for a complete project is included under a general contract, single responsibility for completion is secured. When portions of the work are let by the owner separately, it is important that the specifications and plans make clear the elements of the work so handled and the connection of the general contractor's work thereto. (b) Responsibility for Work. Each general contractor should be responsible for his own work and that of his subcontractors and for proper cooperation with the other contractors involved and should recognize this responsibility in preparing his bid. A GUIDE TO CONTRACT AWARD POLICY TO BE USED ON WATER, SEWER, AND WASTE TREATMENT PROJECTS The four agencies involved in providing grant and loan assistance to communities for the development of water, sewer and waste treatment projects have adopted "A Guide to Bidding Policy" for use on such projects. That Guide spec ifies how materials will be selected and how bids on such materials will be taken. The following guide to contract award policy, to be used in conjunction with the "Guide to Bidding Policy," provides the basis on which successful contractors will be selected and the contract awards made on projects being assisted under the water, sewer and waste treatment programs of the four agencies involved. Whether two or more materials have been specified in the bidding documents for the project (multiple base bid) or a single material has been specified (single base bid) the award will be made to the responsible bidder submitting the lowest responsive bid. Where alternate methods of construction or quantities of work have been used because of their special importance as a means of insuring a bid within the funds available for the project, the award will be made on the basis of the lowest responsive bid obtained by use of necessary alternates taken in the order spe. cified to come within the available funds. The amount of funds available will be indicated prior to bid opening. The position of the bidders may be changed only in acceptance of alternates necessary to bring the bid within available funds. Selection of alternates beyond this point may not change the position of the bidders. If no bids are received within the funds available and such funds are to be augmented to allow award, the award must be made to the low bidder on the basis of the lowest responsive bid. The option to make an award on any basis specified above must be clearly stated in the bidding documents. Approved by the Interagency Committee to Provide Continuing Coordination of Water and Sewer Programs September 22, 1970. AMERICAN INSTITUTE OF MERCHANT SHIPPING Hon. EDMUND S. MUSKIE, AMERICAN INSTITUTE OF MERCHANT SHIPPING, U.S. Senate Committee on Commerce, Subcommittee on Air and Water Pollution, 221 Old Senate Office Building, Washington, D.C. DEAR SENATOR MUSKIE: The American Institute of Merchant Shipping has been following with considerable interest the Senate Public Works Subcommittee hearings on S. 523. AIMS shares your concern for the need to prevent pollution, and applauds your efforts and those of your Senate colleagues to implement comprehensive water quality legislation. It is AIMS' concern that any new legislation, in addition to being comprehensive, also should be effectual. Therefore, we are submitting for consideration and insertion in the record of Subcommittee hearings the enclosed statement in which we comment on the proposed "hazardous polluting substances" provision, in Section 8 of S. 523, and on a suggestion on your Opening Statement convening hearings on the aforesaid bill in which you propose that liability for oil pollution discharges be unlimited. Briefly, our recent experience with state water pollution laws indicates that no insurance company will provide insurance to cover unlimited liability for either oil or hazardous polluting substance discharges. Imposition of such improbable liability actually defeats any effort to achieve maximum pollution protection. Moreover, if unlimited liability is imposed, it probably would give rise to efforts to create many single-vessel corporations whose over-all maximum liability would be limited to the value of the vessel and any freight pending on the cargo as the principal corporate assets. The present high, but insurable Federal limits of liability for oil pollution are adequate, and in addition would be equally adequate if imposed for hazardous polluting substance discharges. The imposition of "punitive" unlimited liability will not prevent accidental discharges, but probably would result in a diminution of maritime trade within and with the United States. We also wish to comment on the recent proliferation of state water pollution laws which attempt to impose liability upon vessels in interstate and foreign commerce. These state statutes are of questionable constitutionality, directly conflict and interfere with the harmonious, uniform federal regulation of the merchant marine, and impose additional administrative and economic burdens detrimental to maritime commerce on both domestic and foreign vessels owners and operators. AIMS believes that to insure efficient, low-cost waterborne transportation, and to prevent retaliatory measures by foreign governments, states should be pre-empted from enacting and enforcing duplicative maritime pollution laws. In addition to existing Federal liability for water pollution, voluntary programs such as TOVALOP and CRISTAL, now afford more than adequate coverage of pollution discharges. Comprehensive international schemes of liability in the form of the 1969 Brussels International Convention on Civil Liability for Oil Pollution Damage and the proposed International Compensation Fund for Oil Pollution Damage are close to realization, and if implemented, would replace the voluntary schemes. We are grateful for your having afforded us this opportunity to comment on the legislation and proposals which your Subcommittee has under consideration. Sincerely, Attachment: JAMES J. REYNOLDS, President. (1177) STATEMENT OF AMERICAN INSTITUTE OF MERCHANT SHIPPING By JAMES J. REYNOLDS, President THE FEDERAL WATER POLLUTION CONTROL ACT Existing Oil Pollution Liabilities Adequate and Insurable. Recommended Hazardous Polluting Substances Liability Amendment is Uninsurable. Unlimited Financial Liability Provision Offers Illusory Maximum Protection and Actually Less Protection Than Does Existing Law and Voluntary Plans. Adequate Pollution Protection is Now Available and Comprehensive International Plans for Protection are Close To Realization. Pre-Emption of State Laws is Imperative. My name is James J. Reynolds, and I am President of the American Institute of Merchant Shipping, an organization commonly referred to as AIMS. AIMS is the national trade association of the American steamship industry and is composed of 35 United States companies which own and operate about 520 U.S.-flag, ocean-going vessels of all types in the foreign and domestic trades of the United States. On behalf of the American Institute of Merchant Shipping, I would like to thank you for this opportunity to make our views a part of the public record with regard to S. 523 and other legislative matters to be reviewed by this Committee following the hearings. This Committee, and other concerned Committees of Congress are to be commended for their efforts in enacting responsible legislation over the past several years to control water pollution. The American Institute of Merchant Shipping shares the concern and interest of Congress in the continuing development of responsible water pollution legislation. We wish to express our views on two proposed changes the Committee is entertaining in the Federal Water Pollution Control Act and on one change AIMS is recommending in said Act. All three proposed changes would have an important effect on ocean-going vessels in domestic and foreign waterbone trade of the United States. The changes the Committee is entertaining would effect the limits of liability for vessel pollution discharges. With regard to oil pollution, Senator Edmund S. Muskie, in his Opening Statement, page 2, item 3, convening the hearing on S. 523. March 15, 1971, recommended that the Committee entertain the idea of removing the limits of liability for oil pollution discharges (no provision appears in the bill as introduced which would effect this change). With regard to hazardons polluting substances, Section 8 of S. 523 (pages 46 and 47), if enacted into law, would impose absolute legal liability upon the owner or operator of a vessel. Also, as now worded there exists the possibility that Section 8 might be construed so as to impose liability in an unlimited amount for acidental discharges of hazardous polluting substances from vessels. If enacted and so construed, these legislative proposals would cause grave economic injury to vessel owners because most would be unable to assume the risk of a catastrophic discharge subjecting them to liability above and far beyond the evidence of financial responsibility they are able to provide. AIMS is concerned also with the increasing proliferation of confusing and conflicting state maritime vessel pollution laws. This proliferation of unnecessary duplicative state law, inconsistent with federal law, only adds to the cost of waterborne transportation without providing any additional protection against pollution. In several states the laws are so harsh they are considered uninsurable by the insurance industry. Although a vessel owner has complied with the federal requirements for certification. he can be refused his right to enter and traverse United States navigable waters over which a state is attempting to assert primary jurisdiction and to require of the vessel owner additional financial certification which he may find impossible to comply with. Ocean-going vessels in interstate and foreign commerce should be subjected only to a single, uniform law, which law according to the Admiralty Clause of the Constitution, should be within the exclusive and paramount jurisdiction of the Federal Government as administrator and enforcer. |