3. PAGE 2
CONTENTS
1. Introduction of Tendering
2. Principles of Tendering
3. Types of Tendering
4. Tendering Process
5. Tender Documents
4. PAGE 3
AIM OF THE PROJECT
The aim of the project is study and get better knowledge about “Tender,
Tendering process and Tender Documents” and presented it in the classroom,
by using presentations. Also this helps to act as a team work.
6. PAGE 5
1. INTRODUCTION
The construction industry in both developed and developing countries may be viewed
as that sector of the economics which, through planning, design, construction
maintain, repair and operation, transform various resources into constructed facilities.
The types of public and private facilities produced range from residential and non-
residential buildings to heavy construction, and also these physical facilities play a
critical and highly visible role in the process of development. For this type of
construction projects, mainly, there are three group are participated. They are client,
consultant and contractor. Under this people, there are lots of stake holders; people
who are connected with the project directly or indirectly are working.
On the construction activities, crores of rupees are spent. Therefore, money is the main
factor of a construction project. Therefore, the client is looking for a select a best,
suitable and cheapener contractor for his works. For that, the acceptable and best
method is tendering method. Tendering is the formal, documental, structural process,
where the tender undertake to enter into a formal agreement with the client. There are
lot of things we have to understand about tendering. If we are going to work with
tendering process, we must have a better knowledge about tendering system. If not, we
will fail with the project, and also as a company and as quantity surveyor. Therefore,
we found lots of information about this topic and we got helps from internet and also
books like book of tendering printed by ICTAD. We would like to thanks Mr. Piumal
Amarasinghe, Lecturer in Quantity Surveying Practice for his advices. We did a
presentation before and this is the report of it. We make this report clearly as we can to
understand get knowledge about tendering to anyone who read this.
7. PAGE 6
TENDERING
WHAT IS TENDER?
DEFINITION
Tendering is the process of choosing the best and cheapest company to supply
goods and services by asking several companies to make offers for supplying
the goods and services.
Tender is an offer which incorporates the sum of money, time and other
conditions required to carry out the contract obligations in order to complete a
project or a part of it consisting of specified works.
8. PAGE 7
2. PRINCIPLES OF TENDERING
The purpose of these principles for Tendering is to provide a framework for the
effective, consistent and efficient management of tendering practices throughout any
construction project. The principles set out in this document can be equally applied to
any industry involving the delivery of a new product or service. Successful projects have
generally started with the use of best practice tendering processes.
These are the basic principles of tendering process,
• All aspects of the tendering process must be conducted with honestly at all
levels of the industry.
• A clear understanding of the rights and obligations of both parties.
• Parties must confirm to all legal obligations.
• Parties must clearly identify ownership.
• Parties must not submit tenders without a firm goal.
• Parties must not engage in any practice which gives improper advantage.
• Condition of tendering must be the same for tender on any particular project.
• Clients must clearly specify their requirements in the tender document and
indicate criteria for evaluation.
• All the information provided in the course of tendering must be protect.
9. PAGE 8
3. TYPES OF TENDERING
The majority builders still obtain much of their work by system of tendering. There are
three principle method of choosing a contractor. They are,
1. Open Tendering
2. Selective Tendering
3. Negotiated Tendering
1. Open Tendering
This usually takes the form of an advertisements in a national or local
newspapers inviting contractors to apply for tendering competition for carrying
out the work. The main characteristic of which are given usually the deposit is
required in order to discourage frivolous applications. The deposit is returnable
on submission of a tender. In this method allows any contractor to submit a
tender to an advertised project.
Process
Client advertises openly in the press or the trade publications inviting
contractors to apply for the project
Contractor that is able to undertake the project would request a tender
document
After receiving the tender from the architect, the contractor may be
required to give a deposit and to ensure a bona fide tender. This is done
to filter out the contractors who are not interested in submitting a tender.
Advantages
Keep competition from large number of applicant.
Possibility to get competitive price.
No chance for favourism.
Provide opportunities to new comers, unknown contractors to enter to the
market.
Disadvantages
Time and cost taken to review the large number of applicant.
The cost of tendering accumulated to the industry and general cost to the
industry is high.
Difficult to evaluate and select best one from wide range of applicant.
10. PAGE 9
2. Selective Tendering
Contractor apply to be included on an approved list maintain by an employing
body often an architectural practice, local authority or statutory body. These
organizations have extensive knowledge and experience of individual
contractors and regularly review contractor performs and approval list from
such list. There are able to select contractors most suited to the contract the
number invited will according to the value of the contract.
Note
Compile a list of preferred builders for the project.
Based on builders established skill. Reliability and proven
competence for the type of work given.
Each contractor is bend ask to provide a tender.
Advantages
Cost of tendering is reduced.
Time consuming for the tender evaluation is reduced.
Allow only capable and approved firms are to be tender.
Provide limited competition and easy to screen and select.
Disadvantages
Let’s competition forces high tender sum.
Opportunities for collusion among competitors and mislead the time.
Mis opportunities. ( new comers)
Industry complain those who have not short listed.
11. PAGE 10
3. Negotiated Tendering
In this process only well reputed contractors are been negotiated by inviting
them to submit their tenders. Client can contractors determine the perimeters for
negotiation before commencement of the project. The maintenance of positive
relationship during the negotiation process in essential.
Why client went to negotiate?
Business relationship
Contractor, finance project ( client find difficult to finance then negotiate
with the builders who is willing to finance the project)
Continuation of contract
Special circumstances ( only one contractor available to work )
Special expertise of equipment
Wish to take advantages of the builder’s specialized knowledge at the
design stage.
To have quick start
Advantages
Expected quality and functions can be achieve more.
Speed up the entire project.
The project objective and definition may be managed. (builders involvement of
the design stage)
Disadvantages
Non-competition forces for high tender sum.
Less formality make course more contract administration inquiries.
Lack accountability.
12. PAGE 11
4. TENDERING PROCESS
Tendering process can be divided in to six stages. These stages are shown in below
picture.
Stage 1: Preparation
Final completion of drawings, specification, measurement / take-off process.
Choose conditions of contract.
Parties involved: architect, engineers, QS, client, project manager
Stage 2: Approval to tender
Discussion and decision on type of tender to be used.
Selection of tender:
Open
Selective
Negotiate
Parties involved: client, consultant, project manager.
Stage 1:
PREPARATION
Stage 2:
APPROVAL
TO TENDER
Stage 3:
DOCUMENTATION
Stage 4:
INVITATION
Stage 5:
PROCESSING
Stage 6:
AWARD
CONTRACT
13. PAGE 12
STAGE 3: TENDER DOCUMENTATION
Letter of invitation to tender
Letter of acceptance
Bills of quantities
Relevant drawings
Schedule of rates
Stage 4: Invitation
Based on selection of tendering methods
Open / competitive / bid tender – produce tender notice
Selective – shot listed contractors will be invited to tender if they wish
Negotiated – only one contractor is approached- direct entry to project
Stage 5: Processing
Received tender submitted by contractor
Tender assessment / evaluation
Completed tenders are received
Arithmetical check
Reasonable tender sum
Reasonable completion time
Capabilities of tenderers under considerations
Tender recommendation / report – tender board
Stage 6: Award contract
Pre-award meeting with contractors – validation of lowest complying bid
Validate lowest bid - Pre-contract meeting with contractor for contract signing
Approval by tender board / treasury (tender exceeds RM10 mill.) – an
acceptance of tender form is issued to tenderer , signed by the authorized officer
14. PAGE 13
5. TENDER DOCUMENTS
Tender documents are prepared to seek tenders (offers).
Also tender document help to maintain & protect the relationship between client &
contractor.
Documents of tender
1. Invitation for bid
2. Instruction to bidder
3. Standard forms
4. Condition of contract
5. Form of tender
6. Bidding data
7. Contract data
8. Specifications / general and special
9. Bills of quantities (BOQ) with pricing preambles
10.Drawings
11.Schedules of additional information
Sample copy of letter of acceptance
Sample copy of bank guarantee for performance bond
Schedule of day work rates
Sample copy of bank guarantee for advance payment
Subsoil investigation report
Special/particular specifications
Notice to Tenderers
This document contains a Project Summary, a listing of Tender Documents, key
dates, validity period, contact details, number of copies required and details of
tender submission location and timing.
Conditions of Tendering
This document details the overall Tender Process including the Delivery
Method, Probity issues, Communication issues, the Criteria for Selection and
the Evaluation Process.
15. PAGE 14
Tender Form & Schedules
These documents request specific information from the Tenderers concerning the
works. For example, Tenders are generally required to provide an overall cost, a
breakdown of this cost, a program, details of manpower, plant and equipment,
personnel, subcontractors and methodologies. The Tender Form is a formal statement
of the Tenderer’s offer to supply services in accordance with the Tender Documents.
Conditions of Contract
This document contains the General Conditions of Contract which sets out the
contractual basis for carrying out the works. In addition, the Special Conditions are
sometimes included which are unique to the client and/or project.
Specification
Depending on the type of Delivery Method chosen, this document may be a Project
Brief or a detailed Specification of the works. These documents set out the
performance and technical criteria for the project.
Drawings
The number and standard of drawings provided.
The main tender document – BOQ
Item
No.
Description Unit Quantity Rate Amount
16. PAGE 15
CONCLUSION
We can conclude that tendering process and work with tendering method is a system
or process that should use advisably, intelligently. Basically, these things are the job,
duty and responsibilities of the Quantity Surveyor. As a Quantity Surveyor, we should
have a better knowledge about tendering. If not, it is directly affect to the client,
company and also our job of quantity surveying. If we use tendering method correctly
and select a suitable contractor for the project, it will helps to build the project at the
due time, with efficiently, quality and also can save money. For succeed these hopes
of the client, best way is use the tendering to select suitable contractor. In this
presentation and process of making this report, we got more knowledge about
tendering. And also, we tried our best to describe these information as correctly.
THANK YOU ..
