microsoft powerpoint - chapter 7 - tendering procedures.ppt [compatibility m
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PROFESSIONAL PRACTICE IPROFESSIONAL PRACTICE IPROFESSIONAL PRACTICE IPROFESSIONAL PRACTICE I
[QSD 289][QSD 289][QSD 289][QSD 289]
1Mohammad Mohammad Mohammad Mohammad NasharudineNasharudineNasharudineNasharudine ShuibShuibShuibShuib
SECTION DESCRIPTIONS LINKS
1 INTRODUCTION
2 WHAT IS TENDER?
3 WHAT IS TENDERING?
4 DIFFERENCE BETWEEN TENDER &
CONTRACT
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CONTRACT
5 TENDER NOTICE
6 OPEN TENDER
7 SELECTIVE TENDER
8 DIRECT NEGOTIATED TENDER
9 TENDER VALIDITY PERIOD
10 TENDER SUBMISSION
11 TENDER OPENING PROCESS
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1. The objective of tendering is to select a
suitable contractor at an appropriate time
and obtain from him an acceptable offer
upon which a contract can be let.
2. Generally there three (3) types of tendering2. Generally there three (3) types of tendering
used:
a. Open Tendering
b. Selective Tendering
c. Negotiated Tender
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� 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.specified works.
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� Tendering is the management and commercial
function of determining the tender based upon
the estimate and other details prepared by
contractor’s estimator and other personal.
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� People often use the same terms for different
things and different terms for the same thing.
The term tender formally means an invitation to
trade under the terms of offer. A contract is thetrade under the terms of offer. A contract is the
term used for when the parties have reached
agreement.
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Format of ideal Tender Notice
� Name of the Project.
� Name & Address of the Client.
� Name of work, materials or services.
� Place of work location.
Period of completion.� Period of completion.
� Date on which the Tender Document sale commences.
� Date and time up to which tender documents can be
obtained.
� The cost of tender documents.
� The date and time up to which the tenders to be
submitted and are to be opened.
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Base on degree of competition:-
� Competitive Tendering
i. Open Tender / Open Competition
ii. Selective Tender / Selective Competition
� Negotiation
Other Variables: continuity & stage or time of calling� Other Variables: continuity & stage or time of calling
tender
i. Serial Contract
ii. Term Contract
iii. Fast-Tracking
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Method of SelectionMethod of Selection
CompetitiveCompetitive
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Negotiated
Tendering
Competitive
Open
Tendering
Open
Tendering
Selective
Tendering
Selective
TenderingOthers
Serial Contract
Pre-Qualification
Factors to be considered when deciding on the method:-
� The building type & size
� Nature & complexity of projects
� Method of construction
� Extent of completion of design document
� Time available before a start on site
� Time required to complete the project
� Financial resources of the client
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Method of SelectionMethod of Selection
NegotiatedNegotiated CompetitiveCompetitive
Choose ContractorChoose Contractor
Select Basis for Select Basis for
Payment
OpenOpen SelectiveSelective
AdvertisementAdvertisement Invitation to BidInvitation to Bid
Tender Tender
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Sign ContractSign Contract
Payment
Select Basis for
PaymentTender Submitted
Tender Deposit
Tender Submitted
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Tender Deposit
Tenders OpenedTenders Opened
Evaluate Tenders
Tender Validity Period
Tender Validity Period
Specified Tendering
Period
Specified Tendering
Period
Late tenders
returned
Tender Closing Date
Tender Closing Date
Accepted Tender
Notify Successful
Tenderer
Prepare Contract Prepare Contract
Document
Reject all Tenders
Notify other
Tenderers
Return Deposits
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DocumentDocument
Sign ContractSign Contract
Tendering MethodsTendering Methods
CompetitiveCompetitive
Tendering methods consist of:-
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Negotiated
Tendering
Competitive
Open
Tendering
Open
Tendering
Selective
Tendering
Selective
TenderingOthers
Serial Contract
Pre-Qualification
Competitive
Tender
Most Effective
Way Obtaining
Competitive Rates
Complete Complete Maximum
Open To All
Contractors
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CHARACTERISTICSNecessary
Complete
Design is
Necessary
Maximum
Competition
Invitation Through
Advertisements
To Ensure
Accountability
�Open to all eligible contractorsInvitation to tenders through the mass media(e.g. general press)
� A tender that received a result of competitivetender.
�Maximum competition
� A tender document fee is required from eachcontractor.
� The system of invitation of tender by publicadvertisements through Newspapers or theInternet in the most open public manner iscalled the Open Tender System.
� This is most effective way of obtainingcompetitive rates.
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Advantages of Open Tendering
�No favoritism
� Introduction to new firms.
�Maximum competition.
Disadvantages of Open Tendering
� Is the lowest firm capable?
� Is it financially secure?
� Experience in tender submission?
�Cost of tendering increased as number of
tenderer increases
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Competitive
TenderObtaining
Competitive Rates
Obtaining Maximum
Open To All
Contractors
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ADVANTAGESObtaining
Lowest Price
Maximum
Competition
No. FavoritismAccountability
Is the Lowest
Capable?
Is the Lowest
Tenderers
Capable?Experience in
Construction?
Problems of Problems of No assurance
Is it Financially
Secure?
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DISADVANTAGESBest Tender
Problems of
Selecting the
Best Tender
No assurance
About Quality
Experience in
Tender Submission?
Higher Cost of
Administration:
Duplicating Documents
�As the name implies, a list of selected tenderers
is produced as a basis for this method of
obtaining tenders.
� The design team together with Client will
normally determine which contractors will benormally determine which contractors will be
invited to tender.
�Design team will take into account contractors’
track records, business record, financial
stability and capacity to carry out project.
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Fulfilled
Certain Criteria
Most Effective
Way Obtaining
The Best Tender
Complete Complete A Maximum of
Limited Number of
Contractors
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CHARACTERISTICSNecessary
Complete
Design is
Necessary
A Maximum of
6 Tenderers
Invitation Through
Invitation Letter
To Ensure
Accountability
Obtaining The
Best Tender
Obtaining
Lowest Price Quality
Experience in Experience in Financially
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ADVANTAGES
Cost of Tendering
reducedAccountability
Submission
Experience in
Tender
Submission
Financially
Secure
Favoritism during
selection of
Tenderers Higher Cost
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DISADVANTAGES
Collusion during
tender
Limited to Certain
Contractor Only
� Series of negotiation will take place between
the client and selected contractor. Normally
under design and build procurement.
� In this method the price to be paid in return of
the work to be done is negotiated with a singlethe work to be done is negotiated with a single
contractor.
� This , obviously, does not provide the owner
with a comparative prices.
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� Though the cost of a work will be higher in this
method, an owner may expect some advantages
from employing a particular contractor whose
policies and methods are known and who has in
the past proved capable of fulfilling his
obligations.obligations.
� The higher cost may be offset by better quality,
early completion, and smooth administration.
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� The negotiated construction bid procedure can
be adopted to the owner’s advantage if the
chosen contractor is one in which the Owner
and the Engineer have confidence, and which is
of known integrity and reliability.
�Moreover, the work to be carried out is within
his special scope and experience.
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Fulfilled
Certain Criteria
Most Effective
Way Obtaining
The Best Tender
Complete Complete A Maximum of
Only negotiated with
single contractor
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CHARACTERISTICSNecessary
Complete
Design is
Necessary
A Maximum of
6 Tenderers
Invitation Through
Invitation Letter
To Ensure
Accountability
Obtaining The
Best Tender
Early
CompletionBetter Quality
Work carried Work carried Financially
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ADVANTAGES
Cost of Tendering
reduced
Smooth in
Administration
experience
Work carried
out within
scope and
experience
Financially
Secure
FavoritismHigher Cost
Public
Accountability are
Rarely Satisfied
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DISADVANTAGES
not provide the
owner with a
comparative prices
Limited to Certain
Contractor Only
�QUANTITY SURVEYING: PRACTICE &
ADMINISTRATION (1983), DENNIS F TURNER,
U.S.A
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