microsoft powerpoint - chapter 7 - tendering procedures.ppt [compatibility m

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

2

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

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

19

� 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.

21

� 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.

23

� 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.

25

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.

27

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

40

Method of SelectionMethod of Selection

CompetitiveCompetitive

41

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

43

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

47

Sign ContractSign Contract

Payment

Select Basis for

PaymentTender Submitted

Tender Deposit

Tender Submitted

+

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

48

DocumentDocument

Sign ContractSign Contract

Tendering MethodsTendering Methods

CompetitiveCompetitive

Tendering methods consist of:-

50

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

52

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.

53

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

54

Competitive

TenderObtaining

Competitive Rates

Obtaining Maximum

Open To All

Contractors

55

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?

56

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.

58

Fulfilled

Certain Criteria

Most Effective

Way Obtaining

The Best Tender

Complete Complete A Maximum of

Limited Number of

Contractors

59


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

60

ADVANTAGES

Cost of Tendering

reducedAccountability

Submission

Experience in

Tender

Submission

Financially

Secure

Favoritism during

selection of

Tenderers Higher Cost

61

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.

63

� 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.

64

� 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.

65

Fulfilled

Certain Criteria

Most Effective

Way Obtaining

The Best Tender

Complete Complete A Maximum of

Only negotiated with

single contractor

66


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

67

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

68

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

70