This document discusses the tendering process for construction projects. It defines tendering as including: 1) inspecting contract documents, 2) estimating costs, 3) adjusting bids, and 4) submitting tenders. The key components of contract documents are identified as instructions to bidders, drawings, specifications, bills of quantities, contract conditions, and bid forms. The document also outlines the process of estimating tender prices, including calculating direct costs, indirect costs, overhead, and profits. It provides an example of preparing a balanced versus unbalanced bid.

1. Ahmed Elyamany, PhD
October 24/27, 2010

2. • •
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3.  By the end of this lecture, you will:
1. Define the steps of Tendering.
2. Define the components of contract
documents.
3. Estimate Tender price.
4. Prepare a balanced and unbalanced bid.
3

5. 




Initial Bond 
Contract Bond

6. 1.Decision No
to Tender
Yes
1.Inspecting Contract Documents Do nothing
2.Decision
to Tender No
Yes
3.Estimating Process
4.Tender Adjustment
5.Submitting Tender

7. 

Mobilization and demobilization - 


- 



8. Include:
1. Instruction to Bidder
2. Drawings
3. Specification
4. Bill of Quantity
5. Contract conditions
6. Letter of offer/Proposal/Bid form

9. 1. Instruction to Bidder










– ◦
– ◦

10. 2. Drawings

– – – –
Workshop drawing
3. Specification

11. 4. Bill of Quantity
10,000 2.5 4,000 m3

12. 5. Contract conditions

(General Conditions) 
(Supplementary Conditions) 
◦
◦
(Claims ) ◦
(Change orders) ◦

13. 6. Letter of offer/Proposal/Bid form





– – – – ◦
–

14. 


(Estimating process)


15.  Tender Price:
 Direct cost
= Material+ Labor+ Equipment+ Subcontractor
 Indirect cost (site-overhead)

– – – – – – – 
–
 General- overhead

– – – – –
 Profit & Risk



16. Senior Managers





17. .1
(Balanced Bid) .2
(Unbalanced Bid) .3

18.  Tender price = Direct cost + Indirect cost +
General- overhead + Profit & Risk
 Alternative Structures of Tender Price
Construction
Construction
Direct Cost Direct Cost
Cost
Cost
Net Cost
Tender Price
Tender Price
Indirect Cost Indirect Cost
General Overhead General Overhead
Markup
Profit and Risk Profit and Risk

19. Performance bond
Bid bond Performance bond Payment bond

20.  Letter of Offer
 Bill of Quantity (BOQ)






21. Direct cost
Item Unit Quantity
Material Equipment labor S/C
1 m3 150 1000 11200 4000 -
2 m3 180 1800 1000 4000 -
3 m3 40 960 400 3200 -
4 m3 60 1200 600 4800 -
5 L.S. job - - - 2000
Site overhead =10 % D.C.
General overhead =5 % construction cost
Profit risk =5 % net cost

22. Direct cost Item
Item Unit Quantity DC
Material Equipment labor S/C
1 m3 150 1000 11200 4000 - 16200
2 m3 180 1800 1000 4000 - 6800
3 m3 40 960 400 3200 - 4560
4 m3 60 1200 600 4800 - 6000
5 L.S. job - - - 2000 2000
35560
 Total Direct Cost= LE 35,560
 Construction Cost= 1.05 * TDC
 Net Cost= 1.05 * CC = 1.05 * 1.05 * TDC
 Tender price=1.10 * NC=1.10*1.05*1.05* TDC
 Tender price=1.21275 * TDC = L.E. 43,125.4

23. Price Factor
= 1.21275 / Quantity
Balanced item price Unbalanced item price
Item Item D.C.
Total Unit Total Unit
1 16,200 19646.5 130.98 200465
2 6,800 8246.7 45.82 8246.7
3 4,560 5530.1 138.25 5530.1
4 6,000 7276.5 121.28 7276.5
5 2,000 2425.5 2425.5 2025.5
Total 35,560 43125.4 43125.4
- 400
+ 400

24. Questions?
24