1. International Burch university Course : Building Construction Technology I
Architecture department Date : xx / xx / xxxx
Sarajevo
LECTURE NO.4
OFFER – TENDRING – PLANNING
Building Construction Technology I
Professor : Prof.dr.Nerman Rustempasic
Assistant : M.Sc. Ahmed El Sayed
2. INTRODUCTION
Offer – tendering and construction site are very important
themes for every engineer. Without understanding these
terms and process, a lot of problems will occur such as :
why we didn’t get this project? Why the other company or
designers are getting the jobs and not us?
This kind of questions can be answered if the designer (
engineer ) learns the realtion between designing and
winning in tender.
Without the tenderation there are no projects, which means
that designers will have no jobs to do.
3. TENDER OFFER FROM THE CLIENT'S AND
ARCHITECT'S PERSPECTIVE
Perception of the stages of a construction project often
varies between the client/architect and the contractor.
Client and architect are involved in the project for months
before the actual construction work commences, for a
contractor however stages of the project include only the
tender offer and construction stages.
Tender procedure, from client’s and architect’s point of view,
is regulated by NJCC (National Joint Consultative
Committee for Building).
4. TENDER OFFER FROM THE CLIENT'S AND
ARCHITECT'S PERSPECTIVE
Most small projects apply the "Single Stage Selective
Tendering” which can be characterized in the following way:
Invitation to tender – the contractors are contacted if they would be
willing to tender. The enquiry is issued in writing 4-6 weeks before
the tender and it should contain a brief description of the investment
and the commencement date.
Number of contractors tendering – recommended maximum
number of contractors is 6, with additional in reserve. The limitation
is due to the fact, that the tenders tend to be expensive and it is
irresponsible to unnecessarily inflate prices in the construction
industry.
5. TENDER OFFER FROM THE CLIENT'S AND
ARCHITECT'S PERSPECTIVE
Tender documentation – the aim of tender documentation all offers
will be presented on the same basis, so the competition may only be
about the price. It is assumed that each contractor will complete
works in a way specified in documentation.
Time to prepare tender offer – in smaller projects it is usually 3-4
weeks, in bigger and more complex investments it can take longer.
Changes in tender documentation – contractors should not make any
changes. They should instead send an enquiry min. 10 days before
the tender date. Architect should send a reply to all contractors to
provide them all the same chances.
6. TENDER OFFER FROM THE CLIENT'S AND
ARCHITECT'S PERSPECTIVE
It is often disregarded in practice, due to the short time
allowed to prepare an estimate or vagueness.
Withdrawal of the offer – tender offer can be withdrawn by the
contractor at all times, as long as it has not been chosen by the
investor. Acceptance of an offer constitutes an agreement between
the investor and contractor.
Tender offers analysis – tender offers should be analyzed soon after
they were returned. After the contract is awarded architect should
inform all participants about the offers received, without naming the
companies, which put them forward. Even though it gives contractors
an insight into competitor’s pricing policy, it is often disregarded.
7. TENDER OFFER FROM THE CLIENT'S AND
ARCHITECT'S PERSPECTIVE
Error check – the winning estimate is checked and the erroneous
calculations are sent back to the contractor. There are two
procedures to resolve those: "Alternative 1" – where the contractor
can confirm or withdraw the offer and "Alternative 2" - where the
contractor can confirm the offer or correct mistakes.
Price negotiation – procedures allow pricing negotiations leading to
lowering the prices if the lowest offer exceeds investor’s budget.
8. BASICS OF COST ESTIMATE PREPARATION
Preparation of tender offer requires various documentation
types, as specified by an architect or an investor. They
involve different terms of settlement and risk.
Regardless of the type of documentation one should take
into account costs not directly connected with corresponding
construction works, e.g. cost of the toilet, on-site safety,
company standing costs etc. Those costs are usually
included in the "Preliminaries", at the beginning of the
estimate.
9. SPECIFICATION & DRAWINGS
This type of documentation contains drawings and
specification; it can also contain a separate scope of works
to clarify the full costs.
Contractor is responsible for surveying the works. Any errors
in measurements and cost estimates will not be taken into
consideration and the contractor will be required to conduct
all the works indicated in the documentation, regardless of
whether they are specified by the scope of work. It means
that contractor needs to check all documentation carefully,
since each its element included in any part of
documentation constitutes part of contract and needs to be
completed.
10. BILL OF QUANTITIES
In case of bigger projects, tender documents often consist of
"Bill of Quantities" (BoQ). It is a list of all required works
(with all measurements already made) – the contractor
needs to provide their rates for each of the works.
BoQ is prepared by "Quantity Surveyor" employed by the
investor, according to Standard Method of Measurement -
SMM.
The latest version is SMM7, but the smaller project still often
use.
11. BILL OF QUANTITIES
The rates given in BoQ will be used to calculate the cost
of additional works of the same type during the project,
it is therefore worth to try to foresee potential additional
works and raise the rate for the corresponding type of
works.
The errors in the BoQ are the liability of the investor – the
contractor needs to be paid for all works required, even if
they are erroneous or if some works are omitted. Because
of that BoQ is not used often anymore.
If the investor cannot state exact measurements, the
approximate quantities are applied.
12. SCHEDULE OF RATES
"Schedule of Rates" is the list of the rates and it’s used very
rarely, only in case if the scope of work is impossible to define.
The contractor is accountable for completed works according to
the time and agreed hourly or daily rates.
It is of course an ideal basis for cooperation from contractor's
point of view, because they are not at any risk and all the
materials and employees working time is being paid for.
In case of such cooperation form it is crucial to keep a detailed
record of time and resources spent during the project. Those are
necessary to establish the payment and eliminate potential
conflicts between contractor and investor.
13. SCHEDULING AND PLANNING CONSTRUCTION
WORKS
Without proper planning it is difficult to make a construction
project run smoothly and be completed on time and within
budget. Of course, smaller and less complex projects very often
do not have a formulated formal plan or schedule, since all
planning takes place in manager’s head.
It is an acceptable solution, however everyone’s perception has
its limits, and in most cases it is impossible to manage all aspects
of a months-long project without the use of additional tools. The
main reasons for planning in construction works can be summed
up as:
Improved management of works and resources, their sequence and
consequences of any changes that may take place
Ability to establish a realistic completion date
Improved efficiency control
Facilitated risk assessment process of the project
Basis for solving contractual claims resulting from delays
14. SCHEDULING AND PLANNING CONSTRUCTION
WORKS
Appropriate schedule of works allows to establish
completion dates for all stages and elements of works, e.g.
when will the electrician be needed, when will the garden
door be installed, floor panels delivered etc. Of course,
scheduling is not about planning works a week in advance –
this can be done by every skilled worker.
A correctly designed work schedule allows such information
to be provided months in advance. Such information often
proves crucial, especially when orders have to be made
long before the delivery.
15. PLANNING TECHNIQUES
The only technique commonly applied in small and middle
sized projects is “Gantt chart" or "Bar chart” (both names
refer to the same method).
Other techniques (arrow diagrams, precedence diagrams,
line of balance, time-chainage diagrams) are only applied to
large projects, often involving infrastructural works. Please
contact us for further information about these methods.
16. GANTT CHART
Gantt or Bar chart is the easiest available planning
technique, and probably the only one commonly understood
without prior training. Despite its simplicity, a correctly
designed chart will provide a lot of information necessary to
complete the project.
Each line on the chart indicates a task or group of tasks
necessary in the project. The length of a bar is relative to
the time necessary to carry out a task.
Individual tasks stand in dynamic dependency relationships
that reflect the order of completion. This allows for a fast
check of how, e.g. a delay of task A will influence the
completion of task C, taking place 2 months later.
17. GANTT CHART
Appropriately prepared chart indicates the critical tasks, i.e.
the ones that determine the timely completion of the entire
project. These form a "critical path". This allows for more
attention to be given to the most important tasks.
Each task can be assigned necessary resources, workers,
equipment and material, which facilitates the procedures of
placing orders and workforce management.
Additionally, the chart may include, or be the basis for a
detailed analysis of financial flow in the project and risk
management.
19. TYPES OF SCHEDULES
Schedules can be classified depending on the type and precision of
information provided.
Master program : It is a general project plan, which does not include
any details, and only shows the main stages of works. It is mainly useful
for the clients and architects supervising the completion time. The
master program must be provided to architect by the contractor.
Detailed program : It is an expansion of a master program, which
includes all activities and details of works completion. It is used by the
contractor to manage works and resources. Usually it is not passed on
to client or architect. Due to the large amount of information it contains,
the detailed program is often prepared to only embrace a specific period
of time (e.g. 1 or 2 weeks of works).
20. TYPES OF SCHEDULES
Purchase Schedule : Additional schedules are created as
necessary by filtering the data included in “Detailed
program”. The most popular is "the purchase schedule",
which indicates the deadlines for making orders. All data is
dynamically related, and therefore if the installation of
windows, which have to be ordered 4 weeks in advance, is
delayed, the schedule will automatically suggest new order
date.
Using schedules greatly facilitates site management and
reduces risk of making a mistake or missing out important
tasks.
21. SOFTWARE
The development of computers and scheduling software has made
preparing and updating of schedules much easier. There are many
programs available, differing in functions advancement, user-
friendliness and price.
Probably the most popular tools available for MS Windows are:
MS Project
Asta PowerProject
Primavera
Choosing appropriate planning software depends on individual needs
and preferences. It’s worth to have a look around and choose among
many available additional options. One very useful additional feature is
the possibility to synchronize tasks with calendar, or sharing the plan
among several employees.
22. RISK MANAGEMENT
Using planning software makes it possible to expand the
functions of schedules to include project risk management. Easy
scenarios analysis processes allow preparation of many variants
of project, e.g. what will the consequences of a delay for a
particular task be and how to deal with them. This kind of
theoretical analysis allows better understanding the mechanisms
behind the project and preparing alternative plans, should
problems emerge.
Risk analysis can be summed up with the following:
Hazard identification ( Identification of dangerous things )
Probability and consequences estimate
Deciding on risk management method (avoidance, reduction, sharing
and retention)
Management and supervision
Conclusion and report
23. PROBLEMS WITH SCHEDULES
Planning and schedules are not problem-free and, as it happens, their
benefits are not fully used.
One must bear in mind that schedule is a dynamical tool which needs to
be regularly updated in order to serve us most efficiently. Every
construction plan is appropriate only until the project has started. It can
be often seen, that our plans do not reflect reality, in which case the plan
must be updated, otherwise it will lose its adequacy.
Plan is only as good as the person who created it. Software is only a
tool, not a magical solution to all our problems. If the project deadline we
set is not realistic, there is no plan which will make completion on time
possible.
