2. Concept of contracts and Tenders
• Tender we often called as an invitation of trade / bid. Whereas Contract is an agreement which is enforceable
by law.
• Sometimes buyer / seller intend to procure/sell his/her requirements, subsequently, he / she usually request for
an offer / quotation from potential bidder. His / Her request consists of certain parameters to perform the
work, called as tender.
• Now, when buyer / seller submits their offer / quotation and if is accepted by the other party, then buyer /
seller send an formal agreement to go for performance the required parameters as agreed. This forms as a
contract.
• So, we can understand the chain of contract formation. First it is Tender, then offer, Offer +
Acceptance=Agreement, Agreement + enforceable by law=Contract.
3. Types of contracts
Lump Sum Contract
Unit Price Contract
Cost Plus Contract
Incentive Contracts
Percentage of Construction Fee Contracts
4. Formation of a Valid Contract
• According to the Contract Act, 1872, the requirements for a valid contract are the Agreement and
Enforceability:
5. Agreement
• The first recruitment of a valid contract is an agreement. Every promise and all set of promises, forming the
consideration for each other is an agreement. When a person to whom the proposal is made defines his assent,
the proposal is said to be accepted. A proposal, when accepted, becomes a promise.
6. Enforceability
• An agreement to mature into a contract must create legal obligation as per the provision of contract laws that
is a duty enforceable by law. Any agreement which does not create any enforceability, i.e. where the parties
do not have a right to approach the court of law to avail legal remedy for breach of contract will not be a
contract.
7. Procedure for submission and opening tenders.
• Submission of tender:-
1. According to the directions contained in the notice inviting tenders, the contractors are required to submit
their tender on or before the date and hour fixed for the same duly filled in, signed and witnessed.
2. Before that he has to deposit the earnest money in the manner prescribed in the Form .
8. • Opening of tenders:-
1. The sealed tenders received are to be opened in the presence of the contractors or their representatives tendering for the work at the
time and place already notified.
2. The Divisional accountant should also be request to be present on such occasion wherever possible.
3. The officer opening the tenders has to read out the rates offered in case of Item rate and percentage rate tenders and amount in case
of Lump sum tenders for information of all those present.
4. To avoid tampering in rates etc. in the original tenders, before a comparative statement is made out and put up to him by the office,
he has to attests the corrections, overwriting etc. in red ink, number them and put this initial at the foot of each page of documents
attached to the tenders.
5. Tenders containing unauthorized corrections and mutilations re liable to rejection.
6. The tenders which are not received in proper form duly filled in or signed or are not supported by the requisite earnest money are
to be summarily rejected and a record of such cases to be kept in the Register of tenders received.
