PROFESSIONAL PRACTICE I [QSD 289]

Mohammad Nasharudine Shuib

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DESCRIPTIONS INTRODUCTION WHAT IS TENDER? WHAT IS TENDERING? DIFFERENCE BETWEEN TENDER & CONTRACT TENDER NOTICE OPEN TENDER SELECTIVE TENDER DIRECT NEGOTIATED TENDER TENDER VALIDITY PERIOD TENDER SUBMISSION TENDER OPENING PROCESS
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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. Generally there three (3) types of tendering used: a. Open Tendering b. Selective Tendering c. Negotiated Tender

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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.

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Tendering is the management and commercial function of determining the tender based upon the estimate and other details prepared by contractors estimator and other personal.

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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 the term used for when the parties have reached agreement.

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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. 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.
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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 tender i. Serial Contract ii. Term Contract iii. Fast-Tracking

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Method of Selection Negotiated Tendering Others Serial Contract Pre-Qualification

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Competitive Open Tendering Selective Tendering

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

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Method of Selection Negotiated Open Choose Contractor Advertisement Select Basis for Payment Sign Contract Late tenders returned Invitation to Bid Competitive Selective

Specified Tendering Period Tender Validity Period

Tender Submitted + Tender Deposit Tenders Opened Evaluate Tenders

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Tender Closing Date

Reject all Tenders Accepted Tender Notify other Tenderers Return Deposits Prepare Contract Document Sign Contract Notify Successful Tenderer

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Tendering methods consist of:-

Tendering Methods Negotiated Tendering Others Serial Contract Pre-Qualification

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Competitive Open Tendering Selective Tendering

Most Effective Way Obtaining Competitive Rates

Competitive Tender

Open To All Contractors

Complete Design is Necessary

CHARACTERISTICS

Maximum Competition

To Ensure Accountability

Invitation Through Advertisements

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Open to all eligible contractors Invitation to tenders through the mass media (e.g. general press) A tender that received a result of competitive tender. Maximum competition A tender document fee is required from each contractor. The system of invitation of tender by public advertisements through Newspapers or the Internet in the most open public manner is called the Open Tender System. This is most effective way of obtaining competitive rates.
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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
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Obtaining Competitive Rates

Competitive Tender

Open To All Contractors

Obtaining Lowest Price

ADVANTAGES

Maximum Competition

Accountability

No. Favoritism

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Experience in Construction?

Is the Lowest Tenderers Capable?

Is it Financially Secure?

Problems of Selecting the Best Tender

DISADVANTAGES

No assurance About Quality

Higher Cost of Administration: Duplicating Documents

Experience in Tender Submission?

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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 be invited to tender. Design team will take into account contractors track records, business record, financial stability and capacity to carry out project.

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Most Effective Way Obtaining The Best Tender

Fulfilled Certain Criteria

Limited Number of Contractors

Complete Design is Necessary

CHARACTERISTICS

A Maximum of 6 Tenderers

To Ensure Accountability

Invitation Through Invitation Letter

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Obtaining The Best Tender

Obtaining Lowest Price

Quality

Financially Secure

ADVANTAGES

Experience in Tender Submission

Accountability

Cost of Tendering reduced

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Favoritism during selection of Tenderers

Higher Cost

DISADVANTAGES

Limited to Certain Contractor Only

Collusion during tender

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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 single contractor. This , obviously, does not provide the owner with a comparative prices.

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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. The higher cost may be offset by better quality, early completion, and smooth administration.

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The negotiated construction bid procedure can be adopted to the owners 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.

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Most Effective Way Obtaining The Best Tender

Fulfilled Certain Criteria

Only negotiated with single contractor

Complete Design is Necessary

CHARACTERISTICS

A Maximum of 6 Tenderers

To Ensure Accountability

Invitation Through Invitation Letter

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Obtaining The Best Tender

Early Completion

Better Quality

Financially Secure

ADVANTAGES

Work carried out within scope and experience

Smooth in Administration

Cost of Tendering reduced

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Favoritism

Public Accountability are Rarely Satisfied

Higher Cost

DISADVANTAGES

Limited to Certain Contractor Only

not provide the owner with a comparative prices

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QUANTITY SURVEYING: PRACTICE & ADMINISTRATION (1983), DENNIS F TURNER, U.S.A

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