Tender Process N Documentation

TENDER
DOCUMENTATION
AND
TENDERING
LEC no 6
Lec By-Dilushika Piumal Amarasinghe Bsc.Qs, 1

Dip in Pm
WHAT IS TENDER?
Lec By-Dilushika Piumal Amarasinghe 2

Bsc.Qs,Dip in Pm
 It is an invitation from the owner to the
contractor to execute some work at
specified cost in specified time.
 It is published in the form of tender

notice in news papers, notice boards,
gussets, etc. according to the cost of
works.

Bsc.Qs,Dip in Pm
Classification of tenders
1. Open tender– An oral talk or written

document between the Engineer and
the Contractor for certain small jobs to
be performed. Sometimes it is
advertised.
2. Sealed tender—Invited for important or
huge projects; wide publicity is given;
always written documents are made.

Bsc.Qs,Dip in Pm
Limited tender—Only a selected no. of
contractors are invited to quote their
rates
4. Single tender—Invitation is given to
only one firm to render a service by
quoting their rates. If the quoted rates
are high, it will be negotiated prior to
the agreement of the contract.
5. Rate contract—usually adopted for
supply of materials, machine, tools &
plant, etc. (items to the store). It
specifies the supply at a fixed rate
during the period of contract.

Bsc.Qs,Dip in Pm
WHAT IS TENDERING ?

Bsc.Qs,Dip in Pm
Stages of a project
 Stage 1: inception & feasibility – identifying project
objectives / set up project brief
 Stage 2: design – develop further project brief /

develop concept & schematic design / Undertake
detailed design & detailing / prepare cost plan & budget
 Stage 3: tendering – issue tender documents /

prepare & submit tender / evaluation of tender / award
tenders / prepare contract documents

Bsc.Qs,Dip in Pm
Stages of a project
 Stage 4: construction – site possession &

mobilization / undertake procurement fabrication,
installation, construction / carry out contract admin
 Stage 5: handover & maintenance – undertake
all testing, commissioning & training / obtain CF /
handover project to owner /carry out necessary
maintenance / Defect rectification / etc

Bsc.Qs,Dip in Pm
Tendering
Will be started after the design complete and project
budget must be approved
The process that is used to obtain offers leading to a
contract between:
client contractor
client consultant
main contractor sub-contractor

Bsc.Qs,Dip in Pm
Purpose of tendering process
 To select a suitable contractor at a time

appropriate to the situation of the project.
 To obtain from the contractor selected at

the proper time.

Bsc.Qs,Dip in Pm
Difference between a contract and a
tender
 A tender formally means an invitation to

trade under the terms of offer.
 A contract is the term used for when the

parties have reached agreement.

Bsc.Qs,Dip in Pm
General TENDERING
PROCESS

Bsc.Qs,Dip in Pm
Tendering process –
PRINCIPAL ACTIVITIES
1. Selection of the most preferable or

appropriate contract procurement
method.
2. Development of tender list
3. Preparation of tender documentation
4. Invitation / calling off tender
5. Preparation of tenders

Bsc.Qs,Dip in Pm
Tendering process –
PRINCIPAL ACTIVITIES (cont’d)
6. Receipt and opening of tenders

7. Evaluation of tenders
8. Acceptance of tender award or award
of contract

Bsc.Qs,Dip in Pm
Stage 3: Preparation of tender
documentation – typical contents
 Letter of invitation
 Checklist for submission of tender
 Articles of agreement
 Conditions of contract
 Form of tender
 Tender specifications
 Bills of quantities
 Tender drawings
 Sample copy of letter of acceptance
 Sample copy of bang guarantee for performance
bond
 Schedule of day work rates
 Sample copy bank guarantee for advance payment

Bsc.Qs,Dip in Pm
Tendering process
Stage 1: Stage 2: Stage 3:

PREPARATION APPROVAL TO DOCUMENTATION
TENDER

AWARD PROCESSING INVITATION
CONTRACT

Bsc.Qs,Dip in Pm
Stage 1: Preparation
 Final completion of drawings,

specification, measurement / take-off
process.
 Choose conditions of contract.
 Parties involved: architect, engineers, QS,
client, project manager

Bsc.Qs,Dip in Pm
Stage 2: Approval to tender
 Discussion and decision on type of

tender to be used.
 Selection of tender:
 Open
 Selective
Shortlist the selected contractor
 Negotiate
 Parties involved: CLIENT, CONSULTANT,
PROJECT MANAGER

Bsc.Qs,Dip in Pm
Stage 3: Documentation
Contract based on quantities Contract based on tender & specs
 Compilation of:  Compilation of:
 Letter of invitation to tenderers
 Letter of invitation to tenderers
 Articles of agreement / conditions
 Articles of agreement / conditions
of contract of contract
 Form of tender
 Form of tender
 Form of tenderer’s details. i.e:
 Form of tenderer’s details. i.e:
contractor’s registration, contractor’s registration,
organization background, track organization background, track
record (past and present projects) record (past and present projects)
 Letter of acceptance
 Letter of acceptance
 Bank and insurance guarantee
forms (performance bond) forms (performance bond)
forms (advance payments) forms (advance payments)
 Specifications
 Specifications
 Summary of tender
 Bills of quantities
 Schedule of rates
 Relevant drawings
 Relevant drawings

Bsc.Qs,Dip in Pm
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

Bsc.Qs,Dip in Pm
TENDER NOTICE OR
NOTICE INVITING
TENDER

Bsc.Qs,Dip in Pm
Examples..

Bsc.Qs,Dip in Pm
 The Tender Notice is a brief description
of the job being tendered which is to be
published in Newspapers and on the
Internet.
 The Internet is a very cost effective way

of publishing the tenders.

Bsc.Qs,Dip in Pm
Format of an ideal Tender
Notice
a. Name of the Project. i. Date on which the Tender
b. Name & Address of the Document sale commences.
Company floating the tender. j. Date and time up to which
c. Name of work, materials or tender documents can be
services. obtained.
d. Place of work location. k. The cost of tender
e. Approximate estimated cost documents.
of work. l. The date and time up to
f. Earnest Money. which the tenders to be
g. Period of completion. submitted and are to be
opened.
h. Date on which the Tender
Document sale commences. m. Specification.
n. Eligibility Criterion.

Bsc.Qs,Dip in Pm
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

Bsc.Qs,Dip in Pm
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
authorised officer

Bsc.Qs,Dip in Pm
TENDER PROCESS
FOR CONTRACTOR

Bsc.Qs,Dip in Pm
Tendering process

Decision to Determine Preparation of
tender basis of cost estimates
tender
Stage 6: Stage 5:
Stage 4:
Submissio Conversion of
n of tender Commercial
estimate to
appreciation
tender

Bsc.Qs,Dip in Pm
Stage 1: Decision to tender
 Receipt of tender documents
 Pre-tender data sheet
 Decision to tender
 Consider implications of:
 Bonds
 Warranties
 Parent company
 Guarantees
 Funding
Bsc.Qs,Dip in Pm
Stage 2: Determine basis of
tender
 Abstract materials and subcons
 Sent out enquiries
 Consider construction methods / prepare method
statement
 Design temporary works / consider alternatives
 Prepare outline programme
 Check major quantities
 Identify restrictions
 Visit site and compile site report
 Campaigning meeting (designating areas responsibilities)

Bsc.Qs,Dip in Pm
Stage 3: Preparation of cost
estimate
 Calculate recurrent rates using:
 Operational
 Unit rates
 Man-hours estimating
 Analyse and check subcontractors’ quotations

 Price prelims / general items (in association
with members of the team
 Prepare summary sheets

Bsc.Qs,Dip in Pm
Stage 4: Commercial
appreciation
 Tender committee meeting part 1-
 Review:
 Method
 Programme
 Technical and commercial risks
 Cash flow and finance
 Use of own plant
 Competition
 Commercial opportunities
 Economic climate
 Check prelims against historical cost data

Bsc.Qs,Dip in Pm
Stage 5: Conversion of tender
estimate to tender bid
 Tender committee meeting – part 2

 Calculate ‘spread’ and add to estimate

Bsc.Qs,Dip in Pm
Stage 6: Submission of tender
 Submit in format required

 Organize delivery

Bsc.Qs,Dip in Pm
Tender Pricing
lec 7

Bsc.Qs,Dip in Pm
Prepare a tender price list
 value for money can be an important component

of many tenders.
 the way you price your bid can also make the
difference between winning or losing business.
 with quotations submit tender price.

Bsc.Qs,Dip in Pm
Before you price a tender
 check the instructions in your client's bid.

 Client”s bid asked to Provide
1. component costs at each stage of the project
(e.g. weekly or monthly)
2.staff time and costs
3.management time and costs
4.administration time and costs
5.estimates of reimbursable expenses
Bsc.Qs,Dip in Pm
Tender pricing document
 The tender pricing document is which the design

team and client wish to review the overall tender
prices provided by tendering contractors. It is
effectively an unpriced bill of quantities.
 It follow format of cost plan at pre tender
estimation stage.
 the preliminaries, staff costs, may be broken
down in more detail.

Bsc.Qs,Dip in Pm
Objective of tender pricing
document
 Enable compare between tenders and the cost
plan (pre-tender estimate).
 Enable the cost consultant to check where
values are within the different tenders (such as
foundations or finishes) allowe assessment of
value for money.
 Identify any significant differences in pricing
between tenderers to ensure the design has
been correctly interpreted.

Bsc.Qs,Dip in Pm
The difference between a
quotation and an estimate
 A quotation is a fixed price offer that can't be changed
once accepted by the customer. This holds true even if
you have to carry out much more work than you
expected.
 An estimate is an educated guess at what a job may

cost - but it isn't binding. To take account of possible
unforeseen developments, you should provide several
estimates based on various circumstances, including
the worst-case

Bsc.Qs,Dip in Pm
How to Win Tenders By Right
Pricing
 pricing of a tender different to normal pricing
strategy.
 a scale made through the tendering process
have good margins and that non related costs
such as the advertising, marketing and allowance
for bad debts should not be included in the
pricing.

Bsc.Qs,Dip in Pm
Pricing the Services
 tender pricing will need to be very accurate.
 technique to product pricing can be determined if
the service is broken down into clear units.
example: tiling can be broken down to a square
meter price.
 once your tender price is clearly established, it can
be constantly reused to respond to several tenders.

Bsc.Qs,Dip in Pm
Tips on tender Pricing
 It is important to consider guidelines when

preparing your tender price.
 try to submit a lower price than your client expects.
 Always submit your lowest possible price for the
service.
 If you wish to provide additional services then
offer separate price for the extra service.
 Your price should make you a reasonable profit.

Bsc.Qs,Dip in Pm
Cont..
 try to put less time, or do it faster, or with fewer

resources than your client expects.
 Try to avoid a single fixed price. You should then
include a price menu that details prices under
various conditions.
 Ensure the price of cost schedule has been
completed against all items for which you wish to
tender.

Bsc.Qs,Dip in Pm
THANK YOU…………..

Bsc.Qs,Dip in Pm

Tender Process N Documentation

Uploaded by

Copyright:

Available Formats

Tender Process N Documentation

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Tender Process N Documentation

Uploaded by

Copyright:

Available Formats

TENDER

Lec By-Dilushika Piumal Amarasinghe Bsc.Qs, 1

Lec By-Dilushika Piumal Amarasinghe 2

 It is published in the form of tender

Lec By-Dilushika Piumal Amarasinghe 3

1. Open tender– An oral talk or written

Lec By-Dilushika Piumal Amarasinghe 4

Lec By-Dilushika Piumal Amarasinghe 5

Lec By-Dilushika Piumal Amarasinghe 6

 Stage 2: design – develop further project brief /

 Stage 3: tendering – issue tender documents /

Lec By-Dilushika Piumal Amarasinghe 7

 Stage 4: construction – site possession &

Lec By-Dilushika Piumal Amarasinghe 8

Lec By-Dilushika Piumal Amarasinghe 9

 To select a suitable contractor at a time

 To obtain from the contractor selected at

Lec By-Dilushika Piumal Amarasinghe 10

 A tender formally means an invitation to

 A contract is the term used for when the

Lec By-Dilushika Piumal Amarasinghe 11

Lec By-Dilushika Piumal Amarasinghe 12

1. Selection of the most preferable or

Lec By-Dilushika Piumal Amarasinghe 13

6. Receipt and opening of tenders

Lec By-Dilushika Piumal Amarasinghe 14

Lec By-Dilushika Piumal Amarasinghe 15

Stage 1: Stage 2: Stage 3:

Stage 6: Stage 5: Stage 4:

Lec By-Dilushika Piumal Amarasinghe 16

 Final completion of drawings,

Lec By-Dilushika Piumal Amarasinghe 17

 Discussion and decision on type of

Lec By-Dilushika Piumal Amarasinghe 18

Lec By-Dilushika Piumal Amarasinghe 19

 Based on selection of tendering methods

Lec By-Dilushika Piumal Amarasinghe 20

Lec By-Dilushika Piumal Amarasinghe 21

Lec By-Dilushika Piumal Amarasinghe 22

 The Internet is a very cost effective way

Lec By-Dilushika Piumal Amarasinghe 23

Lec By-Dilushika Piumal Amarasinghe 24

 Tender recommendation / report – tender

Lec By-Dilushika Piumal Amarasinghe 25

 Pre-award meeting with contractors –

Lec By-Dilushika Piumal Amarasinghe 26

Lec By-Dilushika Piumal Amarasinghe 27

Stage 1: Stage 2: Stage 3:

Lec By-Dilushika Piumal Amarasinghe 28

Lec By-Dilushika Piumal Amarasinghe 30

 Analyse and check subcontractors’ quotations

Lec By-Dilushika Piumal Amarasinghe 31

Lec By-Dilushika Piumal Amarasinghe 32

 Tender committee meeting – part 2

Lec By-Dilushika Piumal Amarasinghe 33

 Submit in format required

Lec By-Dilushika Piumal Amarasinghe 34

Lec By-Dilushika Piumal Amarasinghe 35

 value for money can be an important component