Public works
Public works range from building schools, hospitals, highways, dams, or water networks to the upkeep and maintenance of that infrastructure. What sets them apart from private construction is not the type of work but who commissions it and with what money: a public-sector agency or entity spending public budget (federal, state, or local, under the applicable laws).
Public works are governed by a country's public procurement laws and regulations. These laws require the contracting agency to justify every line item, which is why the unit price analysis, the bill of quantities, and the measurement sheets are formal contract documents, and payment is made through progress billings against physical progress verified on site.
The general rule for awarding a contract is open competitive bidding (a public tender), a transparent procedure that seeks the best conditions of price, quality, financing, and timing for the government. Only in the specific cases the law allows may an agency use a limited invitation to a few bidders or a direct award. The contract can be set on unit prices, a lump sum, or a mixed basis.
Public works impose controls that private construction does not always require: guarantees (advance-payment, performance, and latent-defect bonds) provided through surety, retainage, amortization of the advance, a project logbook (increasingly a digital one), and a formal final settlement. These requirements make traceability of cost and progress critical for the contractor.
Example
A municipality tenders the construction of a road bridge with public funds. It posts the call for bids on the government procurement portal and provides the bill of quantities and the terms; contractors submit a technical and financial proposal with the unit price analysis for each item. The contract is awarded to the most advantageous responsive bid, a unit-price contract is signed, an advance is secured with a surety bond, and payment is made through monthly progress billings against actual physical progress.
Frequently asked questions
What law regulates public works?
Each country has its own public procurement legislation that governs how government agencies contract construction. It typically sets the rules for competitive bidding, mandatory cost breakdowns, progress billings, bonds, and the project logbook, with additional local or regional rules for projects funded at those levels.
What is the difference between public and private works?
The difference lies in who commissions the project and where the money comes from: public works are contracted by the government with public funds and are bound by procurement law (competitive bidding, mandatory unit price analysis, progress billings, bonds, and a logbook), whereas private works are commissioned by a private party with its own funds and allow far more contractual freedom.
How is a public works contract awarded?
The general rule is open competitive bidding, a public tender awarded to the most advantageous responsive bid for the government. Only in the specific cases set by law can an agency resort to a limited invitation to a few bidders or a direct award.