Name : B.N. Neranja

TENDERING DOCUMENTATION PRESENTATION REPORT

PAGE 1

ACKNOWLEDGMENT

We express our sincere thanks to everyone who was helped us.

PAGE 2

CONTENTS

1. Introduction of Tendering

2. Principles of Tendering

3. Types of Tendering

4. Tendering Process

5. Tender Documents

PAGE 3

AIM OF THE PROJECT

The aim of the project is study and get better knowledge about “Tender,

Tendering process and Tender Documents” and presented it in the classroom,

by using presentations. Also this helps to act as a team work.

PAGE 4

GROUP MEMBERS

B.N. Neranja (C)

S.A.C.M. Subasinghe

T.M.C.R.B. Thennakoon

H.M.D.N. Herath

D.A.S. Jayathilaka

PAGE 5

1. INTRODUCTION

The construction industry in both developed and developing countries may be viewed

as that sector of the economics which, through planning, design, construction

maintain, repair and operation, transform various resources into constructed facilities.

The types of public and private facilities produced range from residential and non-

residential buildings to heavy construction, and also these physical facilities play a

critical and highly visible role in the process of development. For this type of

construction projects, mainly, there are three group are participated. They are client,

consultant and contractor. Under this people, there are lots of stake holders; people

who are connected with the project directly or indirectly are working.

On the construction activities, crores of rupees are spent. Therefore, money is the main

factor of a construction project. Therefore, the client is looking for a select a best,

suitable and cheapener contractor for his works. For that, the acceptable and best

method is tendering method. Tendering is the formal, documental, structural process,

where the tender undertake to enter into a formal agreement with the client. There are

lot of things we have to understand about tendering. If we are going to work with

tendering process, we must have a better knowledge about tendering system. If not, we

will fail with the project, and also as a company and as quantity surveyor. Therefore,

we found lots of information about this topic and we got helps from internet and also

books like book of tendering printed by ICTAD. We would like to thanks Mr. Piumal

Amarasinghe, Lecturer in Quantity Surveying Practice for his advices. We did a

presentation before and this is the report of it. We make this report clearly as we can to

understand get knowledge about tendering to anyone who read this.

PAGE 6

TENDERING

WHAT IS TENDER?

DEFINITION

Tendering is the process of choosing the best and cheapest company to supply

goods and services by asking several companies to make offers for supplying

the goods and services.

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.

PAGE 7

2. PRINCIPLES OF TENDERING

The purpose of these principles for Tendering is to provide a framework for the

effective, consistent and efficient management of tendering practices throughout any

construction project. The principles set out in this document can be equally applied to

any industry involving the delivery of a new product or service. Successful projects have

generally started with the use of best practice tendering processes.

These are the basic principles of tendering process,

• All aspects of the tendering process must be conducted with honestly at all

levels of the industry.

• A clear understanding of the rights and obligations of both parties.

• Parties must confirm to all legal obligations.

• Parties must clearly identify ownership.

• Parties must not submit tenders without a firm goal.

• Parties must not engage in any practice which gives improper advantage.

• Condition of tendering must be the same for tender on any particular project.

• Clients must clearly specify their requirements in the tender document and

indicate criteria for evaluation.

• All the information provided in the course of tendering must be protect.

PAGE 8

3. TYPES OF TENDERING

The majority builders still obtain much of their work by system of tendering. There are

three principle method of choosing a contractor. They are,

1. Open Tendering

2. Selective Tendering

3. Negotiated Tendering

1. Open Tendering

This usually takes the form of an advertisements in a national or local

newspapers inviting contractors to apply for tendering competition for carrying

out the work. The main characteristic of which are given usually the deposit is

required in order to discourage frivolous applications. The deposit is returnable

on submission of a tender. In this method allows any contractor to submit a

tender to an advertised project.

Process

Client advertises openly in the press or the trade publications inviting

contractors to apply for the project

Contractor that is able to undertake the project would request a tender

document

After receiving the tender from the architect, the contractor may be

required to give a deposit and to ensure a bona fide tender. This is done

to filter out the contractors who are not interested in submitting a tender.

Advantages

Keep competition from large number of applicant.

Possibility to get competitive price.

No chance for favourism.

Provide opportunities to new comers, unknown contractors to enter to the

market.

Disadvantages

Time and cost taken to review the large number of applicant.

The cost of tendering accumulated to the industry and general cost to the

industry is high.

Difficult to evaluate and select best one from wide range of applicant.

PAGE 9

2. Selective Tendering

Contractor apply to be included on an approved list maintain by an employing

body often an architectural practice, local authority or statutory body. These

organizations have extensive knowledge and experience of individual

contractors and regularly review contractor performs and approval list from

such list. There are able to select contractors most suited to the contract the

number invited will according to the value of the contract.

Note

Compile a list of preferred builders for the project.

Based on builders established skill. Reliability and proven

competence for the type of work given.

Each contractor is bend ask to provide a tender.

Advantages

Cost of tendering is reduced.

Time consuming for the tender evaluation is reduced.

Allow only capable and approved firms are to be tender.

Provide limited competition and easy to screen and select.

Disadvantages

Let’s competition forces high tender sum.

Opportunities for collusion among competitors and mislead the time.

Mis opportunities. ( new comers)

Industry complain those who have not short listed.

PAGE 10

3. Negotiated Tendering

In this process only well reputed contractors are been negotiated by inviting

them to submit their tenders. Client can contractors determine the perimeters for

negotiation before commencement of the project. The maintenance of positive

relationship during the negotiation process in essential.

Why client went to negotiate?

Business relationship

Contractor, finance project ( client find difficult to finance then negotiate

with the builders who is willing to finance the project)

Continuation of contract

Special circumstances ( only one contractor available to work )

Special expertise of equipment

Wish to take advantages of the builder’s specialized knowledge at the

design stage.

To have quick start

Advantages

Expected quality and functions can be achieve more.

Speed up the entire project.

The project objective and definition may be managed. (builders involvement of

the design stage)

Disadvantages

Non-competition forces for high tender sum.

Less formality make course more contract administration inquiries.

Lack accountability.

PAGE 11

4. TENDERING PROCESS

Tendering process can be divided in to six stages. These stages are shown in below

picture.

Stage 1: Preparation

Final completion of drawings, specification, measurement / take-off process.

Choose conditions of contract.

Parties involved: architect, engineers, QS, client, project manager

Stage 2: Approval to tender

Discussion and decision on type of tender to be used.

Selection of tender:

Open

Selective

Negotiate

Parties involved: client, consultant, project manager.

Stage 1:

PREPARATION

Stage 2:

APPROVAL TO TENDER

Stage 3:

DOCUMENTATION

Stage 4:

INVITATION

Stage 5:

PROCESSING

Stage 6:

AWARD CONTRACT

PAGE 12

STAGE 3: TENDER DOCUMENTATION

Letter of invitation to tender

Letter of acceptance

Bills of quantities

Relevant drawings

Schedule of rates

Stage 4: Invitation

Based on selection of tendering methods

Open / competitive / bid tender – produce tender notice

Selective – shot listed contractors will be invited to tender if they wish

Negotiated – only one contractor is approached- direct entry to project

Stage 5: Processing

Received tender submitted by contractor

Tender assessment / evaluation

Completed tenders are received

Arithmetical check

Reasonable tender sum

Reasonable completion time

Capabilities of tenderers under considerations

Tender recommendation / report – tender board

Stage 6: Award contract

Pre-award meeting with contractors – validation of lowest complying bid

Validate lowest bid - Pre-contract meeting with contractor for contract signing

Approval by tender board / treasury (tender exceeds RM10 mill.) – an

acceptance of tender form is issued to tenderer , signed by the authorized officer

PAGE 13

5. TENDER DOCUMENTS

Tender documents are prepared to seek tenders (offers).

Also tender document help to maintain & protect the relationship between client &

contractor.

Documents of tender

1. Invitation for bid

2. Instruction to bidder

3. Standard forms

4. Condition of contract

5. Form of tender

6. Bidding data

7. Contract data

8. Specifications / general and special

9. Bills of quantities (BOQ) with pricing preambles

10. Drawings

11. Schedules of additional information

Sample copy of letter of acceptance

Sample copy of bank guarantee for performance bond

Schedule of day work rates

Sample copy of bank guarantee for advance payment

Subsoil investigation report

Special/particular specifications

Notice to Tenderers

This document contains a Project Summary, a listing of Tender Documents, key

dates, validity period, contact details, number of copies required and details of

tender submission location and timing.

Conditions of Tendering

This document details the overall Tender Process including the Delivery

Method, Probity issues, Communication issues, the Criteria for Selection and

the Evaluation Process.

PAGE 14

Tender Form & Schedules

These documents request specific information from the Tenderers concerning the

works. For example, Tenders are generally required to provide an overall cost, a

breakdown of this cost, a program, details of manpower, plant and equipment,

personnel, subcontractors and methodologies. The Tender Form is a formal statement

of the Tenderer’s offer to supply services in accordance with the Tender Documents.

Conditions of Contract

This document contains the General Conditions of Contract which sets out the

contractual basis for carrying out the works. In addition, the Special Conditions are

sometimes included which are unique to the client and/or project.

Specification

Depending on the type of Delivery Method chosen, this document may be a Project

Brief or a detailed Specification of the works. These documents set out the

performance and technical criteria for the project.

Drawings

The number and standard of drawings provided.

The main tender document – BOQ

Item

No.

Description Unit Quantity Rate Amount

PAGE 15

CONCLUSION

We can conclude that tendering process and work with tendering method is a system

or process that should use advisably, intelligently. Basically, these things are the job,

duty and responsibilities of the Quantity Surveyor. As a Quantity Surveyor, we should

have a better knowledge about tendering. If not, it is directly affect to the client,

company and also our job of quantity surveying. If we use tendering method correctly

and select a suitable contractor for the project, it will helps to build the project at the

due time, with efficiently, quality and also can save money. For succeed these hopes

of the client, best way is use the tendering to select suitable contractor. In this

presentation and process of making this report, we got more knowledge about

tendering. And also, we tried our best to describe these information as correctly.

THANK YOU ..