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8/8/2019 Q.S App. Advanced-Tender
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ADVANCED QUANTITY
SURVEYING APPLICATION
TENDER PROCESS TENDERDOCUMENTATION
SESSION 3
PROF CHITRA WEDDIKKARAFRICS AAIQS FIQS ARAIA FIA(SL)
NOVEMBER 2006
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TENDERING PROCESS
Tendering Process
Is the process by which a client/employerprocures a building project.
A Tender A tender is the final price or offer which is
submitted to the client by the contractor and is asum of money for which he is prepared to carry
out the work and will include not only theestimate but also the a margin of overheadsand profit
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TENDERING & ESTIMATING
A distinction between two words
Tendering and Estimating
Often used to mean same thing in the industry but not
the same Estimate is the is the preliminary assessment of thenet cost of carrying out a specified amount of buildingwork
Where as Tender is the final price or offer made to the
Employer by the contractor and is the sum of money forwhich he is prepared to carry out the work and not onlyincludes the estimate but also the margin of profit andoverheads
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FUNCTIONS OF AN ESTIMATORThe Estimator:
The person in the contractors organization responsible for the preparation ofprices and estimates for the building work
Tries to predict as accurately as possible the cost of construction
Has the responsibility of using his/her skill, experience, and judgement inattempting to assess the extent of likely future costs
Should have through working knowledge of many aspects of the constructionindustry especially with regard to the effects on the cost
Should have a knowledge of building technology and services
Management theory and techniques with regard to precontract planning,tendering policy and the organisation of resources
Understand Quantity surveying, including understanding of contractdocumentation and forms of contract
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TENDER DOCUMENTATION &
TENDERERS SELECTIONTender documentsTHE PURPOSE
Must clearly define the contractual obligations of parties
Provide details of all work covered under the tender
Draw attention to any special conditions or obligations from normal practice
Must provide any supporting information required
Nominate person to COLLECT necessary information
Should provide positive encouragement to tenderers
TENDERS selection
Open tenders
Selective tenders
Pre-registered tenders
Invited-or pre-qualified tenders
Negotiated tenders
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DECISION TO TENDER
Decision to tender
The contractors estimating capabilities are scarce resource
Producing of tenders cost money
Great care must be taken before committing to the costly estimatingoperation
Criteria influencing the decision to accept or reject an invitation totender
Genuineness of the invitation
The nature, the size and complexity of work
Three year continuous job may be tempting but with limitedresource and equipment a realistic contractor may not over
stretch Tackling one large job may limit himself in the market for the
next two years
The regular clients may forget him
The type of work may not be suitable
The principal parties involved
Who the client is?
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Criteria influencing the decision to accept or
reject an invitation to tender
Number of nominated sub contractors
Administrative problems and target dates)
Time allowed for tendering
Time available to prepare tender with a reasonable degreeof accuracy
Firm or fluctuating price required
Contractor may not be ready to accept the risk or pricingfirm price contracts
Only interested in a fluctuating price basis
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Criteria influencing the decision to accept or
reject an invitation to tender
Large degree of risk in attempting to predict what inflation is likely tobe in an unstable economy
Contract details
Important factors such as the contract period, starting date
whether any phased work exists
access to site, site conditions
Location
Working conditions all having a bearing on the suitability of theproject
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Criteria influencing the decision to
accept or reject an invitation to tender
To keep good relations resulting in the possibility of further work
The value of the main contractors own work, PC sums etc
The quantum of work to be carried out by his own work force
Current work load
Number of contracts he/ is engaged in?
Economic, Industrial and political climate
Market price (boom times the demand for material and labour forces)
Industrial relations (labour productivity, industrial disputes and stoppages)
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Criteria influencing the decision to
accept or reject an invitation to tender
Who the architect and the quantity surveyor is?
Attitudes of the parties?
The consultants track record in terms of dispute
generation and resolution
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THE DECISION TO TENDER
All above information must be recorded by
the estimator and submitted to the
management to discuss the possibility ofsubmitting the tender. If after duedeliberations the management decides totender then the acceptance to the
invitation to tender must be submitted tothe architect for the dispatch of the tenderdocuments
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Collection of information to prepare
the tender Tendering time limited
Estimator must plan the program carefully
Before pricing all details regarding tender must be
collected Materials prices must be obtained
Sub contractors quotations must be collected
Plant equipment hire rates must be collected
All preliminary items such as electricity and telephone
charges insurance premiums water rates etc
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Collection of information to prepare
the tender Enquiries to suppliers must be on standard printed forms to besent out to the suppliers
To get accurate prices the following must be given to the
supplier
The specification of the material The quantity of material required
Trade discounts,
Indication of delivery dates
The terms on which he price required
Discounts and Proforma
Preferred method of unloading
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Collection of information to prepare
the tender The date of submission of sub contractors quotations
Anticipated starting dates and completion dates
Unloading and storing f materials
Security and location of services Visit to the site and architects office
Plant manages advice on scaffolding
Contract manger on Labour
Attendance provided by the main contractor if it is a
subcontract Details of site conditions access spot items
Cash flows etc
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Documents Forming a Tender
document
1. Invitation for bids
2. Instruction to Bidders
3. Standard forms Bid security
Letter of acceptance
Agreement Performance security
Advance payment Security
Retention Money guarantee
4. Conditions of contract
5. Form of Bid and qualifications
6. Specifications7. Drawings
8. Schedules
9. Bills of quantities
10. Any other document listed in the contract agreement
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SUBMISSION OF TENDER
Tender prepared by the estimator must besubmitted to the commercial manager for addingof overhead and profit margin of the company
The conversion of the estimate into tender isundertaken by the management at anadjudication meeting where aspects other thanpure cost are considered
Necessary covering letter prepared and
including all relevant documents pertaining tothe tender must be packaged for submission
The tender document must be submitted at thestipulated time
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TENDER EVALUATION
Tenders submitted by the various contractorsare checked for the conformity and anyqualifications
Arithmetical checks must be carried out to checkthe accuracy of the submission
Evaluation report is prepared by the consultantson the reasonable and the cost effective offerwhich is in conformity with the specifications etc
Recommendation is made by the consultants tothe suitability and the choice of the tender for theproject
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TENDER RECOMENDATION
On the Basis of recommendation of the
consultant the employer selects the
suitable contractor
The letter of acceptance or the letter of
award is then issued to the contractor
The contractor then gets ready for the
commencement of the project and
mobilization
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Ethics in the tender process
INTERNATIOAL CODE OF TENDERING IS BASED ON TENETHICAL PRINCIPLES
Tendering at all levels conducted honestly
Parties must conform to all legislative obligationsincluding those required by Trade practices andconsumer Affairs laws
Parties should not seek and submit tenders without afirm intention to proceed
Parties should not be engaged in any practice whichgives one party an improper advantage over the other
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Ethics in the tender process
Parties should not be engaged practices such as collusion ontenders, inflation of prices to compensate unsuccessful tenders,hidden commissions or secret arrangements
There should not be conflict of interest among parties
Conditions of tender must be the same for each tenderer on anyparticular project
Tender documents must specify the clients requirements andindicate the criteria for evaluation
The confidentiality of all the information provided must be preserved
Any party with conflict of interest must declare as the conflict isknown to the party
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Discussion questions
Your company has been asked to show expression of
interest in the construction of a cause way between Dubai
and Qatar?
Your commercial manager has requested you to
prepare a questioner in order for him to attend the pre-bid
Meeting.
What factors will you consider in preparation of such paper
to help the commercial manager in the decision to accept
or reject an invitation to tender
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Discussion questionsSelect a Tender document of your own choice for a low cost commercial/ industrial
Project. (FIDIC 1987 edition )
Evaluate the invitation to tender in the document and identify the criteria in the invitation
to tender, tender documents and conditions of contract that will influence a decision to
tender. Identify construction and estimating workload conditions that will influence the
decision to tender?
Assuming the following conditions
That you are a medium size construction company
At present you find yourself stretched to 75% of your capacity.
There is the possibility of a down turn in the construction industry
Identify the company conditions that will influence a decision to tender and prepare a response to
the invitation. You are given only 10 days to tender
There is a few prime cost items in the contract