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Introduction
Project Stakeholders
Owners Approach
Tendering Stages
Types of Contract
Tendering work flow
Session # 1 – Tendering Concepts & Types
Owner Contractor
Invitation…
.
…
…
Proposal
Contract
Tendering is the process of preparation and submission of Competitive Proposal /
Offer / Bid or expressing interest by the Contractors in response to an invitation /
request for tender by the Employer / Owner
INTRODUCTION TO TENDERING
 Owners/ Employer : Intend to invest/develop a facility
 Consultants : Enables the process in realizing the
intended facility by the Owner
 Contractors : Responsible for physical completion/
realization of the facility
 Service Providers : Requirement for fulfillment of the needs of
Owner/Consultant/Contractor
 Regulatory authorities : Enforcement regulating businesses in the
public interest
PROJECT STAKEHOLDERS
Owners
1. Govt. Organizations
2. PPP – Developers
3. Private Organizations
4. Individuals
Contractors
1. Individuals
2. Company/Firm
3. JV / Consortium
PROJECT STAKEHOLDERS
Consultants
1. Design
2. Project Management
3. Supervision
PROJECT STAKEHOLDERS
Service Providers
1. Architects
2. Insurance Companies
3. Legal
Regulatory Authorities
1. MOEF ( Ministry of Environment & Forests)
2. CRZ (Costal Regulatory Zone)
3. NHB (National Highways Tribunal)
4. AERB (Atomic Energy Regulatory Board)
5. City corporation planning cell
PROJECT STAKEHOLDERS
EOI
PQ / RFQ
NIT / RFP
Expression of Interest
Willingness to undertake project
Prequalification / Request for
Qualification
Process of Short listing interested
party to undertake Owners proposal.
Notice Inviting tender/Request for
Proposal
Formal invitation from Owner inviting
intending parties to submit Offer
(Technical & Commercial)
OWNERS APPROACH
• Whether willing to undertake the Project
Willingness
• Providing Technical Suggestions &
Recommendations for Tender formulation
Suggestions & Inputs
• Accepting the offer to finance the Project
Financing
• Accepting the offer to technically carry the
Project
Functionality
• Commercially interested to sell after
development
Commercial
• Willing to take business risks involved
Business Risk
EXPRESSION OF INTEREST
To bring level playing
field
To minimize unwanted
competition
To impose capability
standards
To impose collaboration
partnership conditions
To increase International
participation
Technical Capability
Financial Capability
Experience
Resource
Sound Engineering Bid
Avoid abnormal price
Realistic bid & Avoid
failure
• What is Disqualification?
• Improper and Inadequate
documentation can also form the basis
for dis-qualification.
PRE QUALIFICATION
Purpose Selection Basis Results in…
1 • Project Location
2
• Promoter/Owner
3
• Estimate Value
4
• Bidder’s eligibility criteria
5
• Issuing authority & procedures
6
• Bid Security / EMD Value
7
• Submission procedures
Advertisements in
newspapers
Formal invitation
from Owners
Web sites & Portal
Well wishers
NIT
Contents Source
• Single Stage
• Two Cover
Option # I
• Two Stage
• Two Cover
Option # II
TENDER INVITATION OPTIONS
# 1
Project Feasibility Study
Detailed Project Report (DPR) & Approval
Tender Preparation
# 2
# 3
# 4
# 5
Publish NIT
# 6
Pre bid clarifications
# 7
Receive Bid
Award
TENDERING STAGES
Types
of
Contr
act
Item
rate
%
Rate
Cost
plus
EPC &
LS
Turnk
ey
BOT /
BOOT/
PPP
TYPES OF CONTRACT
ITEM RATE
- Detailed BoQ by Client
- Rates offered and accepted for individual items
- Payments for actual quantities of work done
PERCENTAGE RATE
- % over Schedule of Rates [SOR] / Client Estimate
- Chances of unbalanced tender is less
COST PLUS
- A fixed & pre-determined % above actual costs
- Resorted to when Scope not defined properly
- Unable to estimate the costs before hand
TYPES OF CONTRACT
EPC
- “Design and Build” Contract as per Client Spec.
- Quoting on LS basis
- Quantity variation not payable
TURNKEY
- From concept to commissioning
- Formulation of Detail specification
- Includes O&M for a specific period
BOT / BOOT / PPP
- Concession for 15-30 years
- Financing by Concessionaire
- Revenue Recognition after construction
- High Risk
TYPES OF CONTRACT
•Bid schedule
•Site
Investigation
•Design
Consultant
•Statutory
Compliance
•Design
•Construction
Methods
•Resource
•Estimation &
Costing
•Taxes & Duties
Risk Assessment
& Bid submission
Designing
& Estimation
Planning
& Scheduling
Bid Documents
Review
•Risk Assessment
•Competitors
Analysis
•Legal advice
•Management
Approval
•Bid Submission
Reading the documents giving importance to minute details will
make you better estimators
• Scope of works & Specification
• Contractual clauses
Every project is unique. So are the Contract documents
•Formation of
Bidding team
•Preparation of
CAD
•Bid requirements
& strategy
•Pre bid Queries
TENDERING WORK FLOW
Tenderin
g Team
Site /
Operatio
n Team
EDRC /
Consulta
nt
Finance
Resourc
e &
Service
Dept
Legal
Quality
& Safety
Indirect
Tax
TENDERING TEAM
TENDERING SCHEDULE
Item Period
W1 W2 W3 W4 W5 W6 W7 W8
Month # 1 Month # 2
Receipt of NIT / RFP -
Finalize Consultants 02
Site Visit & Survey 01
Design 03
SC / Vendor Offers 02
Estimation & Costing 03
Management Review -
Finalize Price & Bid
Submission
08
End of
Session # 1
Notice Inviting Tender (NIT)
PQ Criteria – Financial
PQ Criteria – Technical

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Session 1 Tendering Concepts in construction

  • 1. Introduction Project Stakeholders Owners Approach Tendering Stages Types of Contract Tendering work flow Session # 1 – Tendering Concepts & Types
  • 2. Owner Contractor Invitation… . … … Proposal Contract Tendering is the process of preparation and submission of Competitive Proposal / Offer / Bid or expressing interest by the Contractors in response to an invitation / request for tender by the Employer / Owner INTRODUCTION TO TENDERING
  • 3.  Owners/ Employer : Intend to invest/develop a facility  Consultants : Enables the process in realizing the intended facility by the Owner  Contractors : Responsible for physical completion/ realization of the facility  Service Providers : Requirement for fulfillment of the needs of Owner/Consultant/Contractor  Regulatory authorities : Enforcement regulating businesses in the public interest PROJECT STAKEHOLDERS
  • 4. Owners 1. Govt. Organizations 2. PPP – Developers 3. Private Organizations 4. Individuals Contractors 1. Individuals 2. Company/Firm 3. JV / Consortium PROJECT STAKEHOLDERS
  • 5. Consultants 1. Design 2. Project Management 3. Supervision PROJECT STAKEHOLDERS Service Providers 1. Architects 2. Insurance Companies 3. Legal
  • 6. Regulatory Authorities 1. MOEF ( Ministry of Environment & Forests) 2. CRZ (Costal Regulatory Zone) 3. NHB (National Highways Tribunal) 4. AERB (Atomic Energy Regulatory Board) 5. City corporation planning cell PROJECT STAKEHOLDERS
  • 7. EOI PQ / RFQ NIT / RFP Expression of Interest Willingness to undertake project Prequalification / Request for Qualification Process of Short listing interested party to undertake Owners proposal. Notice Inviting tender/Request for Proposal Formal invitation from Owner inviting intending parties to submit Offer (Technical & Commercial) OWNERS APPROACH
  • 8. • Whether willing to undertake the Project Willingness • Providing Technical Suggestions & Recommendations for Tender formulation Suggestions & Inputs • Accepting the offer to finance the Project Financing • Accepting the offer to technically carry the Project Functionality • Commercially interested to sell after development Commercial • Willing to take business risks involved Business Risk EXPRESSION OF INTEREST
  • 9. To bring level playing field To minimize unwanted competition To impose capability standards To impose collaboration partnership conditions To increase International participation Technical Capability Financial Capability Experience Resource Sound Engineering Bid Avoid abnormal price Realistic bid & Avoid failure • What is Disqualification? • Improper and Inadequate documentation can also form the basis for dis-qualification. PRE QUALIFICATION Purpose Selection Basis Results in…
  • 10. 1 • Project Location 2 • Promoter/Owner 3 • Estimate Value 4 • Bidder’s eligibility criteria 5 • Issuing authority & procedures 6 • Bid Security / EMD Value 7 • Submission procedures Advertisements in newspapers Formal invitation from Owners Web sites & Portal Well wishers NIT Contents Source
  • 11. • Single Stage • Two Cover Option # I • Two Stage • Two Cover Option # II TENDER INVITATION OPTIONS
  • 12. # 1 Project Feasibility Study Detailed Project Report (DPR) & Approval Tender Preparation # 2 # 3 # 4 # 5 Publish NIT # 6 Pre bid clarifications # 7 Receive Bid Award TENDERING STAGES
  • 14. ITEM RATE - Detailed BoQ by Client - Rates offered and accepted for individual items - Payments for actual quantities of work done PERCENTAGE RATE - % over Schedule of Rates [SOR] / Client Estimate - Chances of unbalanced tender is less COST PLUS - A fixed & pre-determined % above actual costs - Resorted to when Scope not defined properly - Unable to estimate the costs before hand TYPES OF CONTRACT
  • 15. EPC - “Design and Build” Contract as per Client Spec. - Quoting on LS basis - Quantity variation not payable TURNKEY - From concept to commissioning - Formulation of Detail specification - Includes O&M for a specific period BOT / BOOT / PPP - Concession for 15-30 years - Financing by Concessionaire - Revenue Recognition after construction - High Risk TYPES OF CONTRACT
  • 16. •Bid schedule •Site Investigation •Design Consultant •Statutory Compliance •Design •Construction Methods •Resource •Estimation & Costing •Taxes & Duties Risk Assessment & Bid submission Designing & Estimation Planning & Scheduling Bid Documents Review •Risk Assessment •Competitors Analysis •Legal advice •Management Approval •Bid Submission Reading the documents giving importance to minute details will make you better estimators • Scope of works & Specification • Contractual clauses Every project is unique. So are the Contract documents •Formation of Bidding team •Preparation of CAD •Bid requirements & strategy •Pre bid Queries TENDERING WORK FLOW
  • 17. Tenderin g Team Site / Operatio n Team EDRC / Consulta nt Finance Resourc e & Service Dept Legal Quality & Safety Indirect Tax TENDERING TEAM
  • 18. TENDERING SCHEDULE Item Period W1 W2 W3 W4 W5 W6 W7 W8 Month # 1 Month # 2 Receipt of NIT / RFP - Finalize Consultants 02 Site Visit & Survey 01 Design 03 SC / Vendor Offers 02 Estimation & Costing 03 Management Review - Finalize Price & Bid Submission 08
  • 21. PQ Criteria – Financial
  • 22. PQ Criteria – Technical