sample tender bidding

8/2/2019 Sample Tender Bidding

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(ASSIGNMENT TEMPLATE ENGLISH VERSION) (COVER PAGE)

FACULTY OF SCIENCE AND TECHNOLOGY

MAY / 2011

SAMPLE

EBTK 3103

TENDER AND CONTRACT MANAGEMENT

MATRICULATION NO :

IDENTITY CARD NO. :

TELEPHONE NO. :

E-MAIL :

LEARNING CENTRE :


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TABLE OF CONTENTS

DESCRIPTION PAGE

INTRODUCTION.. 2

TENDER ADVERTISEMENT.. 4

INSTRUCTION TO TENDER.. 5

TENDER DOCUMENTS.. 10

TENDER EVALUATION AND SELECTION PROCESS.. 12

EVALUATION CRITERIA.. 15

FORMATION OF CONTRACT... 16

CONTRACT AWARD.. 16

APPENDIX 1 (INVITATION LETTER).. 17

APPENDIX 2 (TENDER SUBMISSION CHECKLIST). 19

APPENDIX 3 (SAMPLES OF BOQ) 20

APPENDIX 4 (SAMPLES OF LETTER OF ACCEPTANCE

AND CONTRACT AGREEMENT).. 21

APPENDIX 5 (PERFORMANCE SECURITY) 24

APPENDIX 6 (PERFORMANCE BOND) 26

APPENDIX 7 (ADVANCE PAYMENT SECURITY). 29

APPENDIX 8 (RETENTION MONEY SECURITY)... 31

REFERENCES. 33


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INTRODUCTION

Track Corporation Berhad has been awarded as main contractor and consultant of

the Highway Construction Project from Malaysia Government. The Objective of the

Project was to assist the Government in preserving and improving the federal highwaynetwork to meet the rapid growth of traffic demand safely and adequately. Towards this

objective, the Project was designed to improve:

a) Road maintenance planning, programming and management, and to enhance the

cost and time taken of maintenance operations;

b) Coordination of highway planning at the state and federal levels;

c) Existing network of national highways;

d) Truck-weight control to reduce damage to the roads; and

e) Road safety.

A part of this project has been approved by Malaysian Highway Authority to commence

in the early year of 2012 at the North-South Express Link which the Projects

components are including construction, rehabilitation and strengthening of 562 km of

road. Being a consulting service company, Track Corporation Berhad will manage the

bidding and tendering process of this project as well.

The Pre-Qualified Tender has been chosen by the project committee in tendering

process due to the job specifications which required experience contractors. The selected

contractor needs to have vast experience, high capital, high technology equipment and up

to date with the latest standards of working procedure. This type of tendering process will

promote high quality of work because only a qualified contractor will be chosen. This

tendering model is expected to benefit in terms of workload and paperwork, thus

increasing productivity and efficiency in daily responsibilities. Therefore, the contractor

assessment can be done more objectively.

Pre-Qualification tendering process is to identify qualified constructors based on

some criteria set by Track Corporation Berhad. Besides that, this stage also certifies all

the pre-qualification documents that are required to be submitted by constructors. Pre-

qualification stage is preferred by Track Corporation to minimize the risks and failures. It

is also will enhance the performance levels of selected constructors.


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The procedure of this tender similar to open tender procedure and the selection of

contractors are based on the criteria of financial status, establishment of company and

specialties rather than choosing random contractors. Details of procedure for this tender

can be referring in figure 1.

Figure 1: Pre-qualification tender procedures.


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TENDER ADVERTISEMENT

The advertising of the project is essential during executing bib and tendering

process. The document to be advertised is the tender invitation of this particular project.

The Invitation to Tender process is a special procedure for generating competing offers

from different bidders looking to obtain an award of business activity in this project. It is

also used to select one or more constructors to meet the participant of Track Corporation

Berhad.

NOTICE OF INVITATION TO TENDER

Malaysian registered construction companies are invited to participate in the following Pre-qualification

invitation.Date : 10 July 2011

TITLE/REFERENCEDOCUMENT

FEE

TENDER

BRIEFINGCLOSING DATE

TENDER:Construction, rehabilitation andstrengthening of North-South Express Link.

REFERENCE:TC/NSEL011/2011

RM1000.00 Date:16 Sept2011Venue: TrackBuildingTime: 10:00am

15 October 2011

PAYMENTPayment for the pre-qualification invitation document can be made in the form of Banker's Cheque/BankDraft payable to Track Corporation Berhad (133333-P). Purchase and payment of the document can bemade at the:TRACK Corporation Berhad,Contract Documentation & Control, 3

rdFloor,

Track Building,Seksyen 72, 81110 Johor Bahru,Johor.The payment made is not refundable.

INVITATION SUBMISSION

Completed Proposals are to be submitted by hand in sealed packages to the:Track Corporation Berhad,Submission Box, 3

rdFloor,

Track Building,Seksyen 72, 81110 Johor Bahru,Johor.

Between 9.00 am to 12.00 noon before or on the closing date mentioned above.

Figure 2: Sample of Invitation to Tender advertisement.


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A typical invitation to tender template has following section:

a) Project background;

b) Supplier response required;

c) Timetable for choosing a constructor

d) Requirement.

This invitation to tender will be advertised through the Tender Notice in newspapers,

trade journals and internet. The sample of tender invitation has been designed and can be

seen in figure 2.

INSTRUCTIONS TO TENDERER

Instruction to Tender document is in the general terms and condition of the

project contract document. Track Corporation Berhad has set this document for interested

contractor to becomes Tenderer and should go through the document terms and

conditions stated as below.

Definition of Terms

In the Tender and Contract, the following words and expressions shall have the meaning

stated here under except where the context otherwise requires;

Terms Definition

Company Track Corporation Berhad and shall include their assigns andsuccessors in law and their duly authorized representatives to act on

its behalf

Contractor The person or persons, firm or company whose tender has been

accepted by the Company to supply the items or to perform the

services/works and includes the Contractors duly appointed

representatives, successors and permitted assigns.

Items All goods which the Contractor is required to supply under the

Contract and includes all parts and units thereof.

Services / Works The work to be executed in accordance with the Contract including

all permanent works and temporary works and any plant to be

delivered, installed or supplied.

Specification Referred to the Tender and Contract and includes general and


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technical specification and drawings and any modification thereof

or addition thereto as may from time to time be furnished or

approved in writing by the Company.

Tender The Tender Document duly completed and submitted by the

Tenderer to the Company.

Tenderer The person or persons, firm or company who invited by the

Company to submit a tender.

Schedule of

Tender

Rates/Prices

Schedule wherein are specified the prices of individual items or

Service/Work excluding GST.

Writing Any manuscript, typewritten or printed statement under or over

signature or seal as the case may be.

1. General

1.1.These instructions are designed to ensure that all Tenderer are given equal and fair

consideration. It is important therefore that you provide all the information asked

for in the format and order specified. Please contact Project Manager, Mr. Muhd.

Adam Danish at mail address [email protected] or in their absence please contact

Project Coordinator, Ms Yasmin Damia at mail address [email protected] if you

have any doubt as to what is required or will have difficulty in providing the

information requested.

1.2.Tenderer should read these instructions carefully before completing the Tender

documentation. Failure to comply with these requirements for completion and

submission of the Tender Response may result in the rejection of the Tender.

Tenderers are advised therefore to acquaint themselves fully with the extent and

nature of the goods and contractual obligations. These instructions constitute the

Conditions of Tender. Participation in the tender process automatically signals

that the Tenderer accepts these Conditions of Participation.


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1.3.The Tenderer shall ensure that each and every sub-contractor, consortium

member and adviser abides by terms of these instructions and Conditions of

Tender.

1.4.Tenderer shall accept and acknowledge that by issuing this Instruction to Tenderthe Authority shall not be bound to accept any Tender and reserves the right not

to conclude a Framework Agreement for some or all the goods for which Tenders

are invited.

1.5.All material issued in connection with this Instruction to Tenderer shall remain

the property of the Authority and/or as applicable relevant Other Contracting

Body and shall be used only for the purpose of this procurement exercise. All

Due Diligence Information shall be either returned to the Authority or securely

destroyed by the Contractor (at the Authoritys option) at the conclusion of the

procurement exercise.

1.6.The Authority reserves the right to amend, add to or withdraw all or any part of

this Instruction to Tenderer at any time during the procurement exercise.

2. Conference

The conference will provide Tenderer the opportunity to seek clarification on any

matters related to the Instruction to Contractor and the requirements in an open

forum. Further details are included in the letter accompanying this Instruction to

Tenderer.

3. Cost of Tendering

The Tenderer will not be reimbursed for any expenses incurred in the preparation and

submission of his proposal.

4. The Contractors Organisational Planning

The Tenderer shall outline their organisation for planning and design works and for

construction works in their tender.

5. Inspection of Site


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5.1.The Tenderer is required to visit the site and shall have inspected and examined

the same as well as its surrounding and obtained information in connection

therewith and have satisfied himself before submitting his Proposal, as to the

form and nature thereof including the subsurface conditions, the hydrological and

climatic conditions, existing services, the requirement of the electricity and water

supply authorities, the requirements of the Syarikat Telekom Malaysia Bhd.

and/or Jabatan Telekom, the requirements of other authorities such as Jabatan

Bomba, Jabatan Kilang dan Jentera, Jabatan Alam Sekitar, the relevant planning

approval and local authorities having jurisdiction over the Works, the extent and

nature of work and materials necessary for the completion of the Works, the

means of access to the site and the accommodation he may require and, in

general, shall have obtained all necessary information, as to risks, contingencies

and all other circumstances which may influence or affect his Proposal.

5.2. Any such information forwarded by the Project Director shall not relieve the

Tenderer of his obligations under the provisions of this Clause. The Company

gives no guarantee for the information either, as to the accuracy or sufficiency, or

as to how the same should be interpreted or otherwise howsoever and the

Tenderer shall make use of and interpret the same entirely on his own risk.

6. Sufficiency of Proposal

The Tenderer shall have satisfied himself before submitting his proposal as to the

correctness and sufficiency of his Proposal for the Works, and the Contract Sum,

except in so far as is otherwise provided in the Contract, shall cover all his obligations

under the Contract and all matters and things necessary for the proper design,

construction, equipping, completion and guarantee of the works.

7. Drawings, Specifications and Company Requirement

The Tenderer shall note that the drawings, specifications and Company

requirements issued are meant to serve as a guide and the Tenderershall submit their

own proposal for the evaluation and consideration by the Company. The

specifications proposed shall not be inferior to those described in the Company

Requirements.


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8. Currency to be used in the Tender

The total of the Tender Sum shall be quoted in Malaysian currency, which is in

Ringgit Malaysia. Do not apply the dollars sign.

9. Metric System

All plans and specifications submitted by the Tenderer shall be in the S.1 Unit

(System International D'Unites) of measurement, commonly known as the metric

system as this is a requirement of the approving authorities.

10.Materials, Equipment and Machinery

Before the issue of the Certificate of Practical Completion of the whole of the

Works under this contract, the Tenderer is required to have satisfied the Project

Director by means of a Statutory Declaration made by the Contractor to the

effect, that all materials and equipment supplied and incorporated into the Works

are new and unused and generally are of the best quality with regard to design,

manufacture and performance.

All equipment and machineries which is to be installed and incorporated as

part of the permanent works shall be manufactured by companies having agents in

Malaysia for the subsequent maintenance and repair of the equipment and machinery.

11.Language

For the purpose of this tender the language used shall be English. All submissions

including plans, specifications, Conditions of Contract, etc. forming the Tenderer's

tender document shall accordingly be in English. Provided that nothing in this

Contract shall be invalidate any instruction or notice or certificate given to the

Tenderer or his authorised representative in Bahasa Malaysia or English.

12.Registration

The Tenderer is required to be registered as a Turnkey Contractor with Pusat KhidmatKontraktor (PKK) of the Ministry of Entrepreneurial Development and CIDB. The

Contractor shall submit a certified true copy of the current registration certificate

issued by the said authority together with his Proposal.

13.Acceptance of Tender


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Company reserves the right to accept any tender or to reject all the tenders or to

accept in whole or in part, a particular tender.

14.Period of validity

Tender shall remain valid for a period of up to 180 days from the date of Closing of

the Tender. However, Company reserves the right to extend the validity of the said

period.

15.Period of Completion

The completion of this project shall be 54 months from the date of the Project

Directors order to commence the work.

16.Submission of Tender

The Tenderer shall submit a proposal containing all information and particulars called

for in the Pre-bid Documents. In the submission of their tenders, Contractors are

required to submit their tender documents, filled in a complete in all respects and

properly sealed.

TENDER DOCUMENTS

The documents contained in tender documents are standard forms and it must be

prepared specifically for the particular contract concerned. The Tender Document shall

mean and comprise the following:

a) Letter of Invitation

Is a written document state with inter alia issued to the Tenderer.

b) Checklist for Submission

The documents will assist the Tenderer in making sure that he or she has

complied fully with the tender requirements.

c) Articles of Agreement and Condition of Contract

A contract is a legally enforceable agreement between two or more parties with

mutual obligations, which may or may not have elements in writing.

d) Form of Tender

It is the document used to record the pricing and can also used to highlight the

operation plan, and for the company to provide additional information on

breakdown of costing.


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TENDER EVALUATION AND SELECTION PROCESS

The contract should be awarded to the best all round bid received. In order to be

fair, the procedure for selecting contractors should be clear, written down, checked by

committee and held on file for any future audits.

The objectives of the evaluation process are:

a) To select the most appropriate proposal to meet requirements.

b) To create an evaluation audit trail and set of supporting documentation that will

support the evaluation process and final decision.

The document describes the evaluation criteria that were applied to responses to the

tender. In the formal evaluation, the team or committee may be structured as follow;

Figure 3: Tender Evaluation committee formation

The team will be lead by a team manager which may be divided into a number of groups:

Functional This group will be responsible for evaluating the functional aspects

of the responses.

Technical This group will be responsible for evaluating the technical aspects of

the responses.

General This group will be responsible for evaluating general factors such as

the responding companies and the finances.


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No members of the evaluation team will be connected with any of the respondents. The

Team Manager may be assisted by a number of specialists in particular aspects of the

development and operation of a reporting system. The responsibilities of the Evaluation

Team Manager will be:

Managing the evaluation process

Consulting with specialists as required.

Documenting the evaluation process.

Assign weights to the evaluation factors in conjunction with the group leaders.

Conducting meetings of the evaluation group leaders and of the whole committee.

Preparing the final report on the evaluation.

Reviewing and understanding responses from respondents.

Acting as the single point of contact between respondents and other committee

members.

Allocating and scheduling work for the evaluation groups.

Reviewing the outputs from the evaluation groups and seeking clarification.

The generalised solution evaluation process can be customised to meet the exact needs.

In summary the evaluation process consists of the following elements:

Evaluation Committee the evaluation committee consists of individuals with

appropriate skills to be able to evaluate responses received from contractors.

Evaluation process the evaluation process is the set of steps to be followed by

the evaluation team to conduct an evaluation of the responses.

Evaluation Criteria this is a set of criteria by which the responses will be

assessed.

Evaluation Score the score is an objective assessment of the merits of response

based on the application of the evaluation criteria.

Evaluation Reports this is a document describing the evaluation process and its

results.

Schematically, the high level view of the evaluation process that is proposed to be used

during the evaluation and selection of a reporting solution as shown below:


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Figure 4: Tender Evaluation process flow.


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EVALUATION CRITERIA

The Tender evaluation criteria need to be defined prior to sending out the bid

document or Request for Proposal (RFP). The thought process is important at this stage

as the criteria to be used for assessing the tender needs to be communicated to the

bidders. Tender Evaluation criteria should reflect the risk and value of the contract.

In the Civil and Highway construction sector it is normal practice to provide both

the criteria and weightings, i.e. the exact basis on which their offer will be judged. The

criteria to be used in the tender evaluation process will vary depending on the goods or

services being sourced. The main criteria as listed below:

Technical issues and functional ability to fulfil requirements

Continued technical support and after sales services

Ability to delivery on time and complete in the required time frame

Compliance with legal and statutory requirements

Acceptance of the proposed terms and conditions

Training and on-site installation

Tender is complete and signed by an authorized person

Each separate criterion should have a percentage or a number of marks allocated to it

highlighting the relative importance of each area, disclosed in the RFP if appropriate.

Bids should only be assessed against the criteria issued in the invitation and no new

assumption made when performing tender evaluation.

Figure 5: Example of the Tender Evaluation weighted score.


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FORMATION OF CONTRACTS

Contract formation process will lead to compilation of contract documents. The

contracts it is legally binding agreement containing an offer, an acceptance, a

consideration and an intention to create legal relations. The normal procedure for

formation of a contract is shown in figure 6.

Figure 6: Formation of contracts

CONTRACT AWARDS

In the contract awards stage, Track Corporation Berhad will notice to a bidding

contractor of the acceptance of the submitted bid. This notice is commonly known as

Letter of Acceptance of Offer. The samples of Letter of Acceptance of Offer can be

referring at Appendix pages session.


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Appendix 1

Invitation Letter

To: [name of Contractor]

[address]

Reference: [Insert IBRD Loan No. or IDA Credit No.]

Contract Name, and Identification No. ________ / ________1

Dear Sirs:

We hereby inform you that you are prequalified for bidding for the above cited

contract. A list of prequalified and conditionally prequalified Applicants is attached to

this invitation.

On the basis of information submitted in your application, you would [not](insert

if appropriate) appear eligible for application of the domestic bidder price preference in

bid evaluation. Eligibility is subject to confirmation at bid evaluation.

We now invite you and other prequalified Applicants to submit sealed bids for the

execution and completion of the cited contract.

You may obtain further information from, and inspect and acquire the bidding

documents at, our offices at:

Track Corporation Berhad,

Conference Room 3-1, 3rd

Floor,

Track Building,

Seksyen 72, 81110 Johor Bahru,

Johor.

A complete set of bidding documents may be purchased by you at the above

office, on or after[time and date] and upon payment of a nonrefundable fee of[insert amount

and currency]


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All bids must be accompanied by a security in the form and amount specified in the

bidding documents, and must be delivered to

Track Corporation Berhad,

Conference Room 3-1, 3rd

Floor,Track Building,

Seksyen 72, 81110 Johor Bahru,

Johor.

at or before12:00 noon 15 October 2011. Bids will be opened immediately thereafter in the

presence of bidders representatives who choose to attend.2

Please confirm receipt of this letter immediately in writing by cable, fax, or telex.If you do not intend to bid, we would appreciate being so notified also in writing at your

earliest opportunity.

Yours truly,

Authorized signature

Name and title

Employer


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Appendix 2

Tender Submission Checklist

Schedule 1 Tender Submission Checklist

Name of Tenderer:________________________

Address :______________________________

______________________________

______________________________

______________________________

The Tenderer has submitted the following information with the Tender:

Schedule

No.

Document Please tick if

enclosed

1 Tender Submission Checklist

2 Form of Tender

3 Declaration of Direct or Indirect Interest

4 Company Code of Business Conduct

5 Business Registration Certificate

6 CIDB Certificate

7 Certificate of Origin from the PKK

8 Financial Situation

9

To be completed and returned with Schedules 2 9 and Tender Submission.


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Appendix 3

Samples of BOQ

Bill of Quantities for Improvement Works

Activity Quantity Unit Unit Price Write in

Full

Total Price

Additional

Lane between

Km 50 and80

30 Km

Shoulder

pavingbetween Km

50 and 80

30 Km

Construction

of Bus stopsin 5 cities

5 Bus Stop

type A

Total Price for Improvement Works

Bill of Quantities for Rehabilitation Works

Activity Quantity Unit Unit Price Write in

Full

Total Price

Milling and

Replacement

Lane Km

Shoulder Km

Retrofiling

Lane Km

Shoulder Km

AsphaltSlurry

Lane Km

Shoulder Km

Etc

Total Price for Rehabilitation Works


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Appendix 4

Samples of Letter of Acceptance and Contract Agreement

Notification of AwardLetter of Acceptance

[date]

To: [name and address of the Contractor]

This is to notify you that your Bid dated [date] for execution of the [name of the

Contract and identification number, as given in the Contract Data] for the Accepted

Contract Amount of the equivalent of[amount in numbers and words] [name of

currency], as corrected and modified in accordance with the Instructions to Bidders, is

hereby accepted by our Agency.

You are requested to furnish the Performance Security within 28 days in accordance with

the Conditions of Contract, using for that purpose one of the Performance Security Forms

included in Section IX, Annex to the Particular Conditions - Contract Forms, of the

Bidding Document

Authorized Signature:

Name and Title of Signatory:

Name of Agency:

Attachment: Contract Agreement


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Contract Agreement

THIS AGREEMENT made the ________ day of ________________________, _____,

between ______________________________________of

__________________________ (hereinafter the Employer), of the one part, and

______________________ of _____________________ (hereinafter the Contractor),

of the other part:

WHEREAS the Employer desires that the Works and Services known as

_______________________________ should be executed by the Contractor, and has

accepted a Bid by the Contractor for the execution and completion of these Works and

the remedying of any defects therein,

The Employer and the Contractor agree as follows:

1. In this Agreement words and expressions shall have the same meanings as are

respectively assigned to them in the Contract documents referred to.

2. The following documents shall be deemed to form and be read and construed as

part of this Agreement. This Agreement shall prevail over all other Contract documents.

(i) the Letter of Acceptance

(ii) the Letter of Bid

(iii) the addenda Nos ________(if any)

(iv) the Particular Conditions

(v) the General Conditions;

(vi) the Specification

(vii) the Drawings; and

(viii)the completed Schedules,


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3. In consideration of the payments to be made by the Employer to the Contractor as

indicated in this Agreement, the Contractor hereby covenants with the Employer to

execute the Works and Servics, and to remedy defects therein in conformity in all

respects with the provisions of the Contract.

4. The Employer hereby covenants to pay the Contractor in consideration of the

execution and completion of the Works and Services, and the remedying of defects

therein, the Contract Price or such other sum as may become payable under the

provisions of the Contract at the times and in the manner prescribed by the Contract.

IN WITNESS whereof the parties hereto have caused this Agreement to be executed in

accordance with the laws of _____________________________ on the day, month and

year indicated above.

Signed by ________________________________________________ (for the

Employer)

Signed by __________________________________________________ (for the

Contractor)


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Appendix 5

Performance Security

Performance Security

Option 1: (Demand Guarantee)

________________________________[Banks Name, and Address of Issuing Branch or Office]

Beneficiary: ___________________[Name and Address ofEmployer]

Date: ________________

PERFORMANCE GUARANTEE No.: _________________

We have been informed that ________________ [name of Contractor] (hereinafter called

"the Contractor") has entered into Contract No. _____________ [reference number of the

contract] dated ____________ with you, for the execution of _____________________

[name of contract and brief description of Works and Services] (hereinafter called "the Contract").

Furthermore, we understand that, according to the conditions of the Contract, a

performance guarantee is required.

At the request of the Contractor, we _______________ [name of Bank] hereby irrevocably

undertake to pay you any sum or sums not exceeding in total an amount of ___________

[amount in figures]( )[amount in words], such sum being payable in the types and

proportions of currencies in which the Contract Price is payable, upon receipt by us ofyour first demand in writing accompanied by a written statement stating that the

Contractor is in breach of its obligation(s) under the Contract, without your needing to

prove or to show grounds for your demand or the sum specified therein.


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This guarantee shall expire, no later than the . Day of , 2, and any demand for

payment under it must be received by us at this office on or before that date.

This guarantee is subject to the Uniform Rules for Demand Guarantees, ICC Publication

No. 458, except that subparagraph (ii) of Sub-article 20(a) is hereby excluded.

_____________________

[signature(s)]

Note: All italicized text (including footnotes) is for use in preparing this form and

shall be deleted from the final product.


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Bidder, arrange for a Contract between such Bidder and Employer and make

available as work progresses (even though there should be a default or a

succession of defaults under the Contract or Contracts of completion arranged

under this paragraph) sufficient funds to pay the cost of completion less the

Balance of the Contract Price; but not exceeding, including other costs and

damages for which the Surety may be liable hereunder, the amount set forth in

the first paragraph hereof. The term Balance of the Contract Price, as used

in this paragraph, shall mean the total amount payable by Employer to

Contractor under the Contract, less the amount properly paid by Employer to

Contractor; or

(3) pay the Employer the amount required by Employer to complete the Contract

in accordance with its terms and conditions up to a total not exceeding the

amount of this Bond.

The Surety shall not be liable for a greater sum than the specified penalty of this Bond.

Any suit under this Bond must be instituted before the expiration of one year from the

date of the issuing of the Taking-Over Certificate.

No right of action shall accrue on this Bond to or for the use of any person or corporation

other than the Employer named herein or the heirs, executors, administrators, successors,

and assigns of the Employer.

In testimony whereof, the Contractor has hereunto set his hand and affixed his seal, and

the Surety has caused these presents to be sealed with his corporate seal duly attested by

the signature of his legal representative, this day of 20

.

SIGNED ON on behalf of


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By in the capacity of

In the presence of

SIGNED ON on behalf of

By in the capacity of

In the presence of


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Appendix 7

Advance Payment Security

Advance Payment Security

Demand Guarantee



Date: ________________

ADVANCE PAYMENT GUARANTEE No.: _________________

We have been informed that ________________ [name of Contractor] (hereinafter called

the Contractor) has entered into Contract No. _____________ [reference number of the

contract] dated ____________ with you, for the execution of _____________________

[name of contract and brief description ofWorks and Services](hereinafter called "the Contract").

Furthermore, we understand that, according to the conditions of the Contract, an advance

payment in the sum ___________[amount in figures]( )[amount in words] is to be

made against an advance payment guarantee.


undertake to pay you any sum or sums not exceeding in total an amount of ___________

[amount in figures]( )[amount in words] upon receipt by us of your first demand

in writing accompanied by a written statement stating that the Contractor is in breach of

its obligation under the Contract because the Contractor used the advance payment for

purposes other than the costs of mobilization in respect of the Works.

It is a condition for any claim and payment under this guarantee to be made that the

advance payment referred to above must have been received by the Contractor on its

account number ___________ at _________________[name and address of Bank].


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Appendix 8

Retention Money Security

Retention Money Security

Demand Guarantee



Date: ________________

RETENTION MONEY GUARANTEE No.: _________________

We have been informed that ________________ [name of Contractor] (hereinafter called"the Contractor") has entered into Contract No. _____________ [reference number of thecontract] dated ____________ with you, for the execution of _____________________[name of contract and brief description of Works and Services] (hereinafter called "the Contract").

Furthermore, we understand that, according to the conditions of the Contract, when theTaking-Over Certificate has been issued for the Works and the first half of the Retention

Money has been certified for payment, payment of[insertthesecond half of the RetentionMoneyorifthe amount guaranteed under the Performance Guarantee when the Taking-

Over Certificate is issued is less than half of the Retention Money, thedifference betweenhalf of the Retention Money and the amount guaranteed under the Performance Security]

is to be made against a Retention Money guarantee.


undertake to pay you any sum or sums not exceeding in total an amount of ___________[amount in figures]( )[amount in words]1 upon receipt by us of your first demandin writing accompanied by a written statement stating that the Contractor is in breach of

its obligation under the Contract because the Contractor used the advance payment for

purposes other than the costs of mobilization in respect of the Works.

1The Guarantor shall insert an amount representing the amount of the second half of theRetention Money or or if the amount guaranteed under the Performance Guarantee when theTaking-Over Certificate is issued is less than half of the Retention Money, the differencebetween half of the Retention Money and the amount guaranteed under the PerformanceSecurity and denominated either in the currency(ies) of the second half of the RetentionMoney as specified in the Contract, or in a freely convertible currency acceptable to theEmployer.


33/34


34/34

EBTK 3103

REFERENCES

Dimitri, N., Piga, G. & Spagnolo, G. (2006) Handbook of procurement.

Cambridge: Cambridge University Press

Hughes, G.A., & Barber, J.N. (1992) Building and civil engineeringclaims in

perspective. (3rd, ed.) Sussex: Longman Scientific & Technical.

Marsh, P.D.V. (1989) Successful bidding and tendering. London: Wildwood

House.

Robinson, N.M., & Lavers, A.P. (1988) Construction law in Singapore and

Malaysia. Singapore: Butterworths & Co. (Asia) Pte. Ltd.

Ministry of Treasury Malaysia . (n.d.). Retrieved June 15, 2011, from

www.treasury.gov.my

Uzairi Haji Saidin. (2000). Aturcara kontrak & taksiran. Kuala Lumpur:IBS Buku

Sdn. Bhd.