8/12/2019 Examining

1/4

EXAMINING &REPORTING ON TENDERS

Once the lowest tender is identified the Quantity Surveyor should proceed to look at it in detail. Inmost cases the supporting document will be the bills of quantities and some times the schedule ofrates which require careful scrutiny. The Quantity Surveyor when examining bills of quantities orschedule of rates will look for errors of any kind and for any anomalies or peculiarities which in hisopinion makes it unlike for the client to enter into a contractual relationship with the tenderer.

The reason for the examination of the tender in detail is because of the uses made of the componentparts of a tender subsequently that any errors in the bills of quantitiesschedule of rates need to beidentified and satisfactorily dealt with. Otherwise! problems will arise during the course of the contractand in the settlement of the final account. "nother reason is to reveal "rithmetic errors! which wouldnot be wise to hold the contractor to the tender sum because either the contractor will be working at amuch reduced profit or it would be unfair to the client to have to pay more than the #ob was worth.

The things which the Quantity Surveyor will look for when examining bills or schedule of rates will beof the following kinds.

Arithmetical errors

These may occur.

In the item extensions!

In the totalling of a page!

In the transfer of page totals to collections or summaries!

In the calculation of percentage additions on the $eneral Summary!

%y rounding&off the bill total when carrying it to the 'orm of Tender.

Pricing errors

These are patent errors not matters of opinion as to whether a rate is high or low. The patent error willoccur where in the transition from cube to superficial measurement or from superficial measurementto linear! the estimator has continued to use the basic cube rate for the superficial items! or the basicsuperficial rate for the linear items. "nother type of patent error is where apparently by an oversight!an item has not been priced at all which one would normally expect to be priced.

"gain! identical items in different sections of the bills may have been priced differently without therebeing any good reason. This is because the estimator has not remembered that an identical item hasoccurred before or has not bothered to look to see what rate had been used.

Pricing metho

Sometimes a tender will not price most or any of the preliminaries items! their value being included insome or all of the measured rates. This might create difficulties! should any ad#ustment of value ofpreliminaries become necessary.

Sometimes! contractors price all the measured items at net rates and shows the overhead and profitas an inserted lump sum on the $eneral Summary page of the bills. This is unsatisfactory when usingthe bill rates to value variations and the contractor must be asked to distribute the lump sum among

8/12/2019 Examining

2/4

the measured item rates or to agree to its being treated as a single percentage addition to all theprices.

The contractor may price some sections of the works which will largely completed in the early monthsof the #ob at inflated prices! balancing these with low rates in the finishing section. (is ob#ective is tosecure higher payments in the early valuations! to improve his cash flow positions. This procedure willtend to work against the client)s interest because if the contractor were to go into liquidation before the

contract was completed.

!asic "rice list

The contract provisions may require the contractor to submit a basic price list of materials upon whichhis tender is based. This will be used in order to ad#ust the contract sum for any fluctuations in thecosts of materials during the contract period. The list should be scrutini*ed to ensure that the pricesquoted are the current market prices of the materials named! including delivery to the site in full loads.

+oints to be noted in regard to tenders which are not based on bills of firm quantities are as follows,

Teners #ase on #ills o$ a""ro%imate uantities'

The rates for items of which the quantities are likely to be substantially increased upon measurementof the work as executed should be carefully scrutini*ed! as these may affect the total cost of the #obconsiderably.

Teners #ase on ra(ings an s"eci$ications'

The schedule of the principal rates which have been used in the preparation of the tender should belooked at closely as these rates will be used in the pricing of any variations which may besubsequently ordered. If there is likely to be much dayworks! the percentage additions to prime costswhich the tenderer has quoted may also become significant.

Teners #ase on )a hoc* scheule o$ rates'

The rates for items which are likely to be significant in terms of quantity need careful scrutiny. Theabove comment in regard to dayworks will also apply here.

Re"orting on teners

"s soon as the examination is over the Quantity Surveyor must report to the architect and the client.The purpose of the report is to enable the client to decide whether to accept any of the tenders and! ifso! which one.

The form of report will vary according to the nature of the tender documents. but usually will include

the following-

The opinion of the Quantity Surveyor as to the price level that is the tender is high! low! or

about the level expected.

The quality of the pricing including any detectable pricing method or policy.

The extent of errors and inconsistence in pricing and the action taken in regard to them.

The details of any qualifications of the tender

8/12/2019 Examining

3/4

The likely total cost of the pro#ect if not a lump sum contract.

" recommendation as to acceptance or other wise.

Dealing (ith errors etc.

The section + of ode of +rocedure for Single Stage Selective Tendering recommends twoalternative methods of dealing with errors in contract bills.

The first is the traditional procedure of informing the tenderer of the errors and asking him whether hewishes to confirm his tender! notwithstanding the errors or whether he wishes to withdraw it. Thisprocedure accords with the basic principles of the law of contract! where an offer is made to providegoods or services for a certain consideration and the offer may be withdrawn at any time beforeacceptance.

The second course of action is to inform the tenderer of the errors and to ask him whether he wishesto confirm his tender notwithstanding the errors or whether he wishes to correct genuine errors. If hechooses to correct his errors and revised tender sum is higher than the next on the list! then histender will be set aside and the one now lowest will be proceeded with similar way instead. Section ,of the ode of +rocedure Two Stage Selective Tendering contains similar alternatives in relation tofirst stage tenders.

One reason why the second alternative has been introduced is that because of the large sumsinvolved in most construction pro#ects. It is client)s interest to allow the correction of such errors ashave the effect of increasing the tender sum! if to do so! leaves the tender still in the lowest position.

/hen the contractor elects to confirm his tender his errors must still be dealt with so that the priceddocument is arithmetically correct and consistent throughout. The correction of errors must be done inconsultation and agreement with the contractor.

The "roceure $or the correction o$ errors in #ills is as $ollo(s'

a0. If the original text has been altered with out authori*ation the alteration should be detected andprices ad#usted accordingly to the form of tender.

b0 "ll errors of the kinds described earlier should be corrected and the corrections carriedthrough from page totals to collections! from collections to summaries and from summaries togeneral summary. The incorrect amount should be ruled through with the single line and thecorrect one written above neatly and clearly.

c0. " sum! equal to the net amount of the aggregated errors! should be inserted on the $eneralSummary immediately before the final total as an addition or deduction! as appropriate. Thiswill have the effect of ad#usting the corrected bill total to the amount stated on the 'orm of

Tender.

This net addition or deduction to be equal to the errors is the aggregate of ad#ustment to every rateand price in the bills! excluding any provisional sums! prime cost sums! contingency sums andpreliminaries. "ccordingly! any subsequent use of a rate or price from the bills or of one based uponrates or prices in the bills must be sub#ected to an equivalent ad#ustment. To facilitate this! thebalancing sum 1the net amount of the errors0 is calculated as a percentage of the value of the builderswork.

8/12/2019 Examining

4/4

"ll Quantity Surveyors do not agree on what constitutes #uiler*s (or-for the purpose of calculatingthe ad#usting percentage referred to above. The code says that in addition to the fixed sumsmentioned above! the value of preliminaries items should also be excluded.