Part 35 Ordering New Apparatus and Protecting Your Department's Assets: Understanding Performance Bonds and Bid Bonds After many months of meetings and planning, your fire department is about to go out to bid for the new pumper. Some would think that the majority of the hard work is about to wind...
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Part 35 Ordering New Apparatus and Protecting Your Department's Assets: Understanding Performance Bonds and Bid Bonds
After many months of meetings and planning, your fire department is about to go out to bid for the new pumper. Some would think that the majority of the hard work is about to wind down, but unless your apparatus committee has taken the time to carefully read the "Instructions to Bidders" or boiler-plate portion of your specifications, you may find out that you are missing some important items that can protect the department's interests once the contract is signed with the successful bidder.
Some departments make the mistake of using a manufacturer's standard specifications to incorporate into their final published specifications. While this might provide for a starting point for further discussions, understand that most if not all of this specification language will generally favor the manufacturer and may leave out some of the more important requirements that the department would want to have stipulated within their specifications. Without question the specifications should require that all aspects of the completed apparatus be in compliance with the current edition of the National Fire Protection Association (NFPA) 1901 Automotive Fire Apparatus Standard. You should not allow any bidder to take exception to a portion of your specifications that would violate any NFPA standard and where the specifications call for components or equipment that are above the minimum NFPA requirements these should be noted as well.
One important aspect is to outline how bidders will note exceptions and clarifications to your specifications. An exception should be noted for every item where the bidder cannot meet the intent of the requirement by make or model of a component or cannot provide the requested component or design. The exception should be noted on a separate page within the bid and explained in detail what the bidder intends to provide. A clarification should be offered only where there may be a model-number change or other component upgrade for a specified item within the specifications; i.e., the model of self-contained breathing apparatus (SCBA) seat has changed due to product improvement. Include this statement: "Proposals taking total exception to the published specifications or stating that the bidders proposal takes precedence over the published specifications will be immediately rejected as being non-responsive without further explanation." This protects the fire department from allowing bidders to submit their own specification without having to detail the differences between the department's specifications and the bidder's proposal.
Over the past year, there have been several unfortunate incidents where both communities and departments have made full or partial payments to manufacturers only to have the builders declare bankruptcy or otherwise delay the completion of apparatus without recourse. In some cases, departments have lost all of their money and have nothing to show for their effort, in addition to having to face the public embarrassment of not adequately securing their funds in the process.
There are several methods that you can use to ensure the financial stability of the manufacturer that you are considering to build your new apparatus. First, your specifications should require that each bidder submit a Dun & Bradstreet financial report with the bid proposal. This will provide the department with a good picture of the bidder's financial backing and stability and can assist you in making a wise purchasing decision. Also, if a concerned citizen asks what you have done to protect the governing body and the taxpayers if something goes wrong, you can honestly say you have done all that you can. In addition, the bid should require a bid bond in the amount of either 5% or 10% of the total bid. This bond provides insurance to the department that if chosen, the manufacturer will enter into a contract for the apparatus at the stated price. Any reputable manufacturer is capable of providing a bid bond to back up their ability to successfully offer bids for new apparatus.