TENDER ESTIMATION

ACKNOWLEDGEMENT

First of all I wish to express my sincere gratitude to Almighty God for giving me the courage and determination to complete this assignment. Also I would like to express my utmost gratitude to my lecturer MR.N.T.K.LOKULIYANA he gave me excellent guideline to complete this assignment and assess my all performance with his busy schedule Finally I like to thank to my class friends to give me a good corporation to complete this assignment

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TENDER ESTIMATION

CONTENTS

ACKNOWLEDGEMENT....01 CONTENTS.02 TASK -01 1.1............................03-07 1.2....08-09 1.310 TASK -02 2.1.11 2.2. ...12 2.3C/A:01-C/A:03 TASK -03 3.1....13-14 3.2C/A:04-C/A:17 TASK -04 4.1.15 4.2.16 4.317-18 TASK -05 5.1....19-22 5.224-25 5.3C/A:18-C/A:22 CONCLUSION27 REFERENCES.28

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TENDER ESTIMATION
TASK -01 DEMONSTRATE KNOWLEDGE AND UNDERSTANDING OF THE PRINCIPLES OF TENDER PRICING 1.1. STATE AND DESCRIBE THE STEPS OF TENDER PRICING PROCESS 1. DECISION TO TENDER: The tender documents arrive and the estimator records all relevant information such as: The time allowed for preparing the tender Drawings available The approximate value and extent of the project The client, Architect, Q.S and other consultant Value of main contractors own work Project Details e.g. phased work, conditions of contract, access to site, working conditions. Firm price or fluctuating price tender required Current workload and timetable for project

After reviewing the above information, management must decide whether to tender for the project or decline the invitation. If it is decided not to submit a price, the tender documents should be returned immediately to the architect/supervising officer. If it is decided that a tender should be submitted, the contractor move to the next stage 2. INSPECTION OF TENDER DOCUMENTS The arrival of the tender documents within a contractors office invariably causes a stir; everyone is eager to have a look. The documents should be passed directly to the estimating department. The Code of Estimating Practice (COEP) states that they should be inspected by the person who will be responsible for preparing the estimate. This should be the head of department the individual who takes the responsibility for the estimate not the estimator who will later be appointed to deal with the task. It is most important that the early inspection is carried out by a person experienced in current procedures and documentation, and capable in decision making and effective in communicating with others. The documents should first be checked that they accord with those listed in the letter of invitation, normally: 1. Two copies of the bills of quantities. 2. Two copies of the general arrangement drawings. 3. Two copies of the form of tender. 4. Addressed envelope for the return of tender (and priced bills if applicable). If the documentation is not complete the fact should be reported immediately by telephone. If reference is made in the letter that certain sections of the bills will follow shortly and the tendering time is as stated in the preliminary invitation, an appeal should be made for a revision of time to comply with the CPSSST. This clearly states that the time for tendering should be calculated from the date of issue of the last section.

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TENDER ESTIMATION
3. COLLECTION OF INFORMATION The time allowed for preparing a tender is always limited; the estimator must plan the program very carefully. The work which has to be undertaken in a typical 4 week tender period comprises: Dispatching enquires Visit consultants offices Visit the site Receipt of quotations and examinations The mechanical process of pricing the tender documentation Meetings with plant manager, contracts manager etc to determine a preliminary program, construction methods and likely plant requirements

4. ESTIMATE TIMETABLE The estimator is responsible for preparing the estimating timetable showing the key dates for him and the other members of the estimating team. For most tenders there is an absolute requirement to meet the submission date. The estimator must program the activities needed to produce a tender to show how the deadline can be met and explain to other members of the team their part in the plan. Each project is different, and some dates such as those for the return of quotations require firm action to maintain the program dates. Time allowed for tendering is usually limited by the clients need to start a project quickly. If the design stage has been delayed it is often the tender stage that is shortened. Flexibility is needed to concentrate on the critical parts on the estimate preparation. The estimator can press on to complete his work with a day or so to spare for reconciling and checking the estimate. Much of the early part of the tender period is given over to the dispatch of enquiries to suppliers and sub-contractors and setting up job files when a computer system is used. SAMPLE ESTIMATE TIMETABLE

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TENDER ESTIMATION
5. ENQUIRIES AND QUOTATIONS SUPPLIERS Enquires should state: The specification of the material The quantity required The anticipated delivery dates The terms upon which the price is required The date by which the quotation is required The address of the site and access details Period for which the quotation is open for acceptance SUB-CONTRACTORS Photo copies of the relevant parts of the bill of quantities, specifications and if possible copies of drawings should be sent out to perspective sub-contractors. Enquires should state clearly: The items to be priced The terms of the main contract The period for which the quotation is open for acceptance The plant, materials, attendance etc to be provided by the main contractor Anticipated commencement and completion dates The form of contract and details from the appendix The terms of payment Date by which the quotation is to be submitted Address and details of the site

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TENDER ESTIMATION
6. VISITS TO SITE The visit to site can be made after all enquires have been dispatched and before prices begin to come back. The visit to the site will enable the estimator to produce a report giving the following information: The position of the site in relation to roads etc Names of local and statutory authorities Details of site/ground conditions, spot items etc Site access, egress and possible site layouts Facilities for disposal of surplus excavated materials etc

7. VISITS TO CONSULTANTS OFFICES It may be that only drawings showing plans and elevations will be sent out with the tender documents and that further details and working drawings can be examined at the consultants offices e.g. the estimator may require further details of manufactured joinery, steelwork joinery fittings etc, before these sections can be priced accurately 8. RECEIPT OF QUOTATIONS Prices received from sub-contractors and suppliers are examined for sufficiency, terms etc 9. PLANNING AND MID TENDER REVIEW The project is discussed with other managers to determine a preliminary program, construction methods, sequence of work, site layouts and what other plant, services, labour and site staff are required. It must be decided whether: All labour can be obtained locally or will it be necessary to recruit for the project. Sufficient plant is already owned or is it necessary to purchase/hire additional items. It would be desirable to sub-let any further work. The preliminary program should also be prepared containing the following information: Contract starting and completion dates Any work to be done in stages Work to be sub-let by main contractor Work to be done by nominated sub-contractors (if JCT 98 forms)

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TENDER ESTIMATION
10. PREPARATION OF THE ESTIMATE It can be divided into 4 stages: 1. The establishment of all-in rates for key items i.e. labour, gang costs, plant costs etc. 2. The selection of domestic sub-contractors and suppliers 3. The use of these all-in rates together with costs per unit for materials to calculate unit rates for each item in the bill 4. The pricing of the preliminaries and project overheads TENDER ADJUDICATION Tender adjudication takes place after the bills of quantities are priced and usually involves the senior management of the contracting organization who will, among other matters, decide the level of profit required, sometimes referred to as the margin. This figure, together with a percentage to cover overheads, will be added to the rates calculated by the estimator. The level of profit is kept a closely guarded secret Having taken the decision to submit a tender the contractor will take delivery of the tender documents and proceed to prepare the bid; this will involve: Carefully examining the drawings and bills of quantities for accuracy and then preparing a timetable for the preparation of the bid Visiting the site, particularly appropriate for alteration work, or where the site has restricted access or working Preparing any method statements; method statements are an analysis and description of how the contractor proposes to carry out particularly complicated parts of the works. 11. FINAL REVIEW The consideration of the estimate to produce a tender is the responsibility of management .The estimator and other senior staff will prepare reports for consideration by management who will consider the following items before determining the tender figure; Project reports Conditions of contract Contractual and construction risks Terms of the quotations from sub-contractors Capital required for the project Technical and management staff required Current workload Market Conditions Competition Reputations of client, consultants and area Following evaluation of the alternatives, risk and scope for profitability the mark up is determined and the actual tender figures calculated. The decision being made within the Frame work of company policy .A record of all tenders should be kept together will the results (if known) for future reference

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1.2. LIST THE FACTORS TO BE CONSIDERED IN PRICING A TENDER

Market Condition: The volumes of work in progress in the area at a given point in time affect construction cost. When the market is burying with many project, tender price list are generally high. Most consultants are busy and competition is not keen. However during ausle times when there are few projects, contractors are anxious to out bid themselves so as to stay in business, so construction cost tends to be lower. Availability of Materials: When required materials are readily available in an area where a project is to be executed, materials will be cheaper than where they are not so available. Generally, materials are cheaper where they are produced e.g. if you can buy cement directly from Colombo, the price will be a lot cheaper than in Jaffna because of transportation and profit margins of middlemen and so on. Imported materials for similar reasons are more expensive than locally produced materials.
Availability of Labor: Where a certain type of labor is not readily available in the area where a project is to be constructed, it may be necessary to import from an area where such labour is available. Some inducement may have to be offered before such labour will move from its base such as transportation, accommodation, inconveniences allowances etc. these add to the cost of construction. Transportation: The farther a site is from town, the more expensive will be the construction cost Location: The standard of living in an area affects the cost of construction. People are willing to pay higher prices for construction in places Location of Site: The particular location of the site can have significant effect on cost. Remote site may require additional cost for the provision or access roads and temporary services or the provision of additional security measures. Also, a site in a congested or restricted area also gives rise to major problems such as delivery & storage of materials and components, protection of adjoining buildings and the public, restriction on the use of mechanical plants and so on, all these will increase the cost of construction. Time Consideration: For certain reasons, a project may need to be completed in a very short time; this tends to push up construction cost. Laborers may be required to work overtime and overtime rates are usually higher than normal rates. Incentives scheme may have to be introduced to increase labor productivity. Closure supervision is necessary as mistake must be avoided, there may be time to apply remedial action

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Site Condition: May affect the construction cost of a particular building. The nature of ground may necessitate more complex form of foundation. The ground water level when close to surface will involve costly water pumping operation. A wet site may involve rising temporary sheds and offices above ground level and they involve more costly temporary roads. Steeply sloping site may involve major cost in cutting and filling requirements, existence of buried pipes and cables may involve major cost to re-root such. Total Height of Building: The higher a building is, the longer it takes and more difficult it is to get the point of execution of works. It is also more difficult to work at such height. Labor charges for 30working at great height are higher than normal height; there is also the cost of providing additional safety measures and insurance. Also, the need for special scaffolding, hoist, tower crane, elevators etc. will tend to increase the cost of very tall building over the cost of building requiring the same quantities at ground level.

Class of Contractors: There are various types of contractors in the market. These gives rise to different classification. Small contractors comprises of one man board of directors. They usually carry little general overhead and keep very few permanent staff Medium contractors usually have a board of at least two but not more than five directors they employ a few more permanent staff, have a reasonable office and possess some equipment and official cars. Large contractors have a lot of times publicly owned with many share holders having at least six members on their board of directors, fleet of cars and equipments, large office space and a lot of staffs of various discipline. Generally, the larger the firm, the higher their cost. Also, the level of profit expected by the share holder of larger firms is a lot more than that required by the smaller contractors. The rates for the small contractors therefore tends to be much lower than for large contractors Types of Consultants: Architect: - Some architects are very difficult to work with, their initial designs are not detailed and they rely a lot on instructions on site. Many variations occur and delays are frequent. These will add to the cost of construction. The same applies to Engineers and other designers. Contractors are therefore known to increase their prices by a certain percentage when it is known that they would be working with particular consultant. Types of Tendering: Open tendering generally brings lower prices than selective tendering, and this in turn result in lower price than negotiated tendering which brings the highest price of fall.

REFERENCE: UNESCO-NIGERIA TECHNICAL & VOCATIONAL EDUCATION REVITALISATION PROJECT-PHASE II NATIONAL DIPLOMA IN QUANTITY SURVEYING TENDERING AND ESTIMATING II COURSE CODE: QUS 210

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TENDER ESTIMATION
1.3. LIST THE SOURCES AND NATURE OF INFORMATION REQUIRED FOR COST ESTIMATING 1. Drawings : dimensions (length, width ,height ) shape of component of the building elevations 2. Specifications : quality of workmanship Way of construction Additional works related with work item 3. Preambles : quality of material way of handling materials 4. BOQ : Description of work Unit of work item Quantity of work item 5. Suppliers quotation : Prices of materials Quality of materials Discounts 6. Sub-contractor quotation : Prices of work item Discount 7. Site visit : Condition of site Nature of soil Shape of land 8. Previous experience : Labor cost 9. Previous document: Additional related work 10. BSR Standard prices for work items

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TENDER ESTIMATION
Task: 02 PREPARE STANDARD RATES FOR LABOUR, CONSTRUCTION PLANT AND MATERIALS 2.1. LIST THE FACTORS TO BE CONSIDERED WHEN CALCULATE ALL IN RATES FOR LABOR, PLANTS AND MATERIAL. Construction cost is a broad phrase or term and can be interpreted to mean cost of any sort to anyone associated with construction work. It depends on the point of view let us say you are a contractor, your costs are your expenditure on labour, materials and plant. The clients cost of land, consultant fees and so on. The base cost of construction therefore comprises of expenditure on materials, labour and plant, the quantities of materials, labour and plant required for a job are determined &attaching prices to these defines the basic construction cost, but to these are also a variety of factors that affect this basic cost: In our industry most estimators will calculate costs based on net rates these will then be enhanced later to include overheads and profit. Gross rates are sometimes referred to as all-in rates ALL IN RATE FOR LABOR Minimum guaranteed overtime. Non productive time ETF & EPF Insurance Medical facilities Non productive time Tool money Inclement of bed weather Minimum guaranteed bonus

ALL IN RATE FOR MATERIAL Prime cost of the material Transportation costs Unloading and Stacking costs Materials movement on site Extra Materials to compensate for Wastage Allowance for materials being measured net in BOQ Loss in consolidation, shrinkage etc

ALL IN RATE FOR PLANT Depreciation of plant Repair and maintenance cost of plant License and Insurances cost Fuel and Lubricant Operator cost

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TENDER ESTIMATION
2.2. ANALYZE THE FACTORS LISTED IN 2.1 AND EXPLAIN HOW EACH ONE CONTRIBUTES TO THE TOPIC (LABOR COST, MATERIAL COST AND PLANT COST) The Resources which compromise a unit rate are labour, materials and plant LABOR In the construction industry labour is often employed in two main ways, these are :1.Direct Often referred to as cards in, the employer pays all the costs of employment including for example national insurance and sick pay amongst others .2.In-Direct These workers are self employed or referred to in industry as on the lump These are often labour only sub-contractors without the normal costs of employment along with the other legal protections such as redundancy, sick pay and minimum notice periods. Labour may be paid for on an hourly, daily, weekly or piecework basis. Directly employed operatives are usually paid in accordance with a working rule agreement which will specify the rates and allowances to be paid. However, some contractors are trying to move away from the national wage bargaining and introduce local wage rates. Ultimately the actual rates paid for labour will depend on market forces MATERIALS Several factors affect the cost contractors pay for materials. In the material element of a unit rate, in addition to the actual cost of the material the estimator must also consider above factors because Where prices of materials are described by suppliers as ex works this means the price at the factory and delivery costs will have to be added. PLANT Plant may be divided into two main categories, the costs of which can be allocated to contracts in differing ways. Non-Mechanical Plant Basic items of plant including barrows, hosepipes, spades, trestles, scaffolding, small powered hand tools etc With the exception of scaffolding and one or two other items it is virtually impossible to allocate the cost of non-mechanical plant items to a contract, let alone to a specific unit rate e.g. a wheelbarrow may be used on several contracts in its life time. The cost may be included in overhead charges as a percentage, as a lump sum in the preliminaries bill or, more accurately, on longer contracts a list of non-mechanical plant items is prepared, coasted and included in the contract sum Mechanical Plant This include all mechanical plant not allocated to unit rate such as cranes, lift, dumpers, hoist, tractor, generating set, drills, forklift etc. the contractor is expected to allow for this items whether they are purchased specifically for the project or they are already owned by the firm or they are to be hired for the period they are required on the project. The usual thing is to allow for (a) Cost of transporting plant to site (b)Hire rate for the period plant is on site (c)Cost of maintenance on site (d)Profit and overhead Page 12

TENDER ESTIMATION
Task: 03 BUILD UP UNIT RATES FOR TRADES WORK ITEM 3.1. STATE THE FACTOR WHICH EFFECT THE CALCULATION OF UNIT RATES FOR FOLLOWING WORK ITEM 01. EXCAVATION The following factors may affect unit rates for ground works Type of excavation e.g. trenches, pits, basements Ground conditions e.g. clay, sand, soil, rock Depth of excavation Ground water Time of year when excavating Mechanical or hand excavation Distance and availability of tips Estimated bulking of materials 02. CONCRETE The following factors may affect unit rates for concrete work; Whether ready mixed or site mixed concrete is used Whether concrete is reinforced Surcharges for part loads Location of mixing plant on site Type and size of mixing plant Method of transporting, hoisting, placing and compacting mixed concrete Cost of protecting and curing Unset concrete Operatives working with concrete receive additional payments for skill and responsibility. Items of plant should be priced separately. Concrete is usually measured in m3Site Mixed Concrete 03. BRICK WALL The following factors may affect unit rates for brick work;
Quality of finished works Type of work (i.e. straight walls, curved walls, foundations etc) Working overhand, at height Type of pointing

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TENDER ESTIMATION
04. FORMWORK Formwork measures the actual faces of work covered or to be supplied. The following must be taken into consideration in determining the size of the formwork
The amount of material required The kind of finishes required i.e. sawn faced or smooth finish, ground finish, biscuit etc. This determines the

types of materials to be used as formwork and the surface from finish required is removed.
The height to be supported. This determines the height of props and types of props. Normal labour for fabricating, erecting and striking of formwork. The number of uses required of the formwork this is usually a matter of experience. In small

contract it may be possible to reuse the same formwork twice depending on the repetitive nature of the work

REFERENCE: UNESCO-NIGERIA TECHNICAL & VOCATIONAL EDUCATION REVITALISATION PROJECT-PHASE II NATIONAL DIPLOMA IN QUANTITY SURVEYING TENDERING AND ESTIMATING II COURSE CODE: QUS 210

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TENDER ESTIMATION
TASK: 04 DEMONSTRATE ABILITY TO COSTING OF PRELIMINARIES / OVERHEAD COST OF THE CONTRACTOR 4.1. EXPLAIN PRELIMINARIES AND OVERHEAD COSTS IN BILL OF QUANTITIES

WHAT ARE PRELIMINARY ITEMS?

Preliminary items are items of cost which do not relate to any particular work section and usually listed in the first bill of quantities. Many estimators prefers to inserts a lump sum for all the preliminaries usually worked out as a percentage of the total of the measured works. It is good practice however to put a price to each of the item. The price quoted should read at after careful consideration of each item as it applies to the particular job at hand e.g water for the works. It will be pipe bone water readily available on site or water has to be transported to site on trucks.

PRELIMINARY BILL
The preliminaries bill gives the contractors the opportunity to price overheads which is described in the Code of Estimating Practice as the cost of administering a project and providing general plant, site staff, facilities and site based services and other items not included in bill rates. Preliminaries costs vary from contract to contract depending on complexity of work, size of contract, specialist plant and equipment required, conditions imposed by the employer etc. On relatively simple contracts preliminary costs may be in the order of 10 15% of the contract sum whereas on complex contracts this figure could be much higher. A contractor must calculate the cost of the preliminary items separately for each contract; no two contracts are the same. SMM7 recommends that fixed and time-related charges should be identified separately in a bill of quantities. A fixed charge is defined as the cost of work which can be considered as being independent of duration A time-related charge is defined as the cost of work which is to be considered as dependant on duration.

OVERHEADS
Overheads may be defined as the cost of maintaining (running) the contractors organization. There are two types of overheads: (1) Head Office Annual cost of staff salaries, expenses, rents, rates, gas, water, electricity, telephones, office equipment, postage, insurance, maintenance of buildings and equipment etc. The cost of these items is expressed as a percentage of a companys turnover and included in the tender. (2) Project or Site Project site costs including non productive (manual) site staff, site office costs, storage facilities and other preliminary / site organization costs. Items are priced as individual items and may be fixed or time related costs or a mix of fixed and time related costs. The costs of these items are included in the tender.

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4.2. JUSTIFY THE GIVEN SCENARIO IN RELATION TO THE ABOVE TWO EXAMPLES, HOW/WHY DIFFERENT COSTS INVOLVED FOR THE SAME PRELIMINARY ITEMS IN DIFFERENT PROJECTS. The preliminaries are most important part in a BOQ also it is very difficult to calculate because it usually will differ project to project because of following reasons Will identify the two work item how it differ project to project Transportation of machineries The different distance of transporting plant to site The different machineries needed for the different project The different project scope (large or small) Site office for consultant representative The different number of staff for each project The different maintain period because of the different duration of project The accommodation required for the project it will defer each project The cost will differ according to place weather on site or off site For the above mentioned reasons the cost of preliminary will differ each project so as an estimator he will gain this knowledge through the past experience. Most of the times the preliminary item will be calculate separately even same project scope

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TENDER ESTIMATION
4.3. CALCULATE THE COST OF ABOVE TWO ITEMS WITH YOUR OWN ASSUMPTION PRELIMINARY ITEM-01: SITE OFFICE FOR CONSULTANTS REPRESENTATIVE The contractor is usually expected to provide and maintain temporary site accommodation for Supervising consultant on site Site agent and site staff Hut for workmen Storage, shed for materials, tools etc. Pricing for these must cover the cost of: Initial construction of accommodation Removal on completion and making good ground disturbed Maintenance of accommodation throughout duration of the project Furniture including ventilation and air conditioning Overhead and profit from this estimator must remove the resale value of items are still useable at the end of the projects

SITE OFFICE
The contractor shall provide suitable accommodation for the clerk of works, with a minimum floor area of 20 m2 including desk, four chairs, filing cabinet and all necessary heating, lighting and cleaning. ASSUMPTION Contract period: 144 weeks Transport to and from site: Rs.22500 per trip Hire of hut: Rs.8500.00 per week Hire of furniture and heaters, etc.: Rs.2500.00 per week

FIXED CHARGES Transport to and from site 2 trips Rs.22500 Erection 10 hours Dismantle 5 hours 15 hours laborer @ Rs.300.00 Total of fixed charges TIME RELATED CHARGES Hire of hut 144 weeks @ Rs.8, 500.00 per week Furniture and heaters 144 weeks @ Rs.2500.00 per week Energy costs for heating and lighting: 144 weeks @ Rs.640.00 per week Cleaning 2 hours per week 144 weeks = 288 hours @ Rs.1980.00 Total of time related charges Rate per week = Rs.13, 620.00 Total (fixed and time related charges) 49,500.00 + 1,961,280.00 = 2,010,780.00 Page 17 285,120.00 1,961,280.00 92.160.00 1,224,000.00 360,000.00 4500.00 49,500.00 45000.00

TENDER ESTIMATION
PRELIMINARY ITEM-02: TRANSPORTATION OF MACHINERIES This include all mechanical plant not allocated to unit rate such as cranes, lift, dumpers, hoist, tractor, generating set, drills, forklift etc. the contractor is expected to allow for this items whether they are purchased specifically for the project or they are already owned by the firm or they are to be hired for the period they are required on the project. The usual thing is to allow for (a) Cost of transporting plant to site (b) Hire rate for the period plant is on site (c) Cost of maintenance on site (d) Profit and overhead

TRANSPORTATION OF MACHINERIES
Cost of plant Less scrap value 3,000,000.00 450,000.00 2,550,000.00 2,550,000.00 4 = 637,500.00

Assume a life of 4 years therefore annual cost

Assume a usage of 1500 hours per year: Cost per hour 637,500.00 1500 = 425.00 Assume 25% for repair and maintenance Assume 10% for license and insurance Total cost of plant Assume 1 liter of fuel per hour @ Rs.135.00 Per liter Assume 0.5 liter of lubricant oil per hour @ Rs.720.00 per liter Assume Rs.175.00 for the operator per hour Net unit rate Overhead & profit 25% Gross unit rate = 106.25 = 42.50 573.75 = 135.00 = 360.00 = 175.00 1,243.75 =310.93 1554.68

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TENDER ESTIMATION
TASK: 5 DESCRIBE THE PROCEDURE FOLLOWED IN PREPARATION OF A QUOTATION 5.1. DESIGN TWO SAMPLES INQUIRY LETTERS TO SUBCONTRACTOR AND SUPPLIER IN ORDER TO COLLECT THEIR QUOTATION.

ENQUIRY LETTER TO SUPPLIERS

12/07/2012 DELTA MAGACONSTRUCTION (PVT) LTD, NO: 39, DANIEL ROAD, COLOMBO: 03

TO: SALES MANAGER ORANGE ELECRIC PVT LTD, 165, GALLE ROAD, DEHIWALA, SRI LANKA.

Dear Sir, CONSTRUCTION OF A PROPOSED SHOPPING COMPLEX

WE INVITE YOU TO QUOTE YOUR BEST PROPOSAL FOR SUPPLY OF BELOW MENTIONED MATERIAL FOR OUR PROPOSED SHOPPING PROJECT AT
ITEM NO 01

DESCRIPTION ORANGE SPIRAL SHAPE ENERGY SAVING LAMP

TRI-PHOSPHOR POWDER FLAME RETARDANT CAP TUBE DIAMETER: 12MM WATTAGE: 20W VOLTAGE: 110V

QUANTITY 1000

YOUR QUOTATION MUST BE DELIVERED TO THIS ADDRESS DELTA MAGACONSTRUCTION (PVT) LTD, NO: Z39, DANIEL ROAD, COLOMBO: 03

TO ARRIVE NO LATER THAN 02.00 P.M. ON OR BEFORE __ OF ____ 2012

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TENDER ESTIMATION TERMS AND CONDITIONS

Payment terms Advance payment Payment type & term Discounts Transportation Traffic condition or restrictions : 1 week after delivery : 25% of total : Please mention your payment type & term : Please notify your discount : By the Suppliers with safe with protection. : During week days from 8.00 vehicles can park at the site area. : Two weeks am to 05.30 pm

Submission of quotation

Suppliers will be required to deliver the material according to the schedule. If you need to make any inquires you may visit the site after contacting the site manager of the project. We would appreciate if you could provide us with the relevant discounts since we are one of your frequent customers. If your company is out of stock then please notify us when you will be able to receive these materials. And if there are any clarifications about the tender please contact Mr.Aslam the estimator of the project. We would appreciate if you would send the acknowledge receipt of this enquiry and submit the quotation in accordance with the given instructions. Yours Faithfully, ...... Aslam (Quantity Surveyor)

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TENDER ESTIMATION ENQUIRY LETTER TO SUBCONTRACTOR

__/__/2012 DELTA MAGA CONSTRUCTION (PVT) LTD, NO: 39, DANIEL ROAD, COLOMBO: 03

TO: MANAGER JUDI CONTRACTORS (PVT) LTD, GALLE ROAD, BARUWALA, SRI LANKA. DEAR SIR, CONSTRUCTION OF A PROPOSED GYMNASIUM WE INVITE YOU TO QUOTE YOUR BEST PROPOSAL FOR DOING OF BELOW MENTIONED WORK FOR OUR PROPOSED GYMNASIUM PROJECT AT PANAGODA. ITEM NO 01 DESCRIPTION PLASTERING FOR EXTERNAL BRICK WALL WITH1:3 CEMENT: SAND MORTAR QUANTITY 750m2

YOUR QUOTATION MUST BE DELIVERED TO THIS ADDRESS DELTA MAGA CONSTRUCTION (PVT) LTD, NO: 39, DANIEL ROAD, COLOMBO-03 TO ARRIVE NO LATER THAN 02.00 P.M. ON OR BEFORE __ OF ___ 2012

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TENDER ESTIMATION TERMS AND CONDITIONS

Payment terms Advance payment Payment type & term Traffic condition or restrictions : 2 weeks after work started : 20% of total : Please mention your payment type & term : During week days from 8.00 am to 05.30 pm vehicles can park at the site area. : Two weeks

Submission of quotation

Subcontractor will be required to deliver the material according to the schedule. If you need to make any inquires you may visit the site after contacting the site manager of the project. We would appreciate if you could provide us with the relevant discounts since we are one of your frequent contractors. If your company is out of stock then please notify us when you will be able to receive these materials. And if there are any clarifications about the tender please contact Mr. Aslam the estimator of the project. We would appreciate if you would send the acknowledge receipt of this enquiry and submit the quotation in accordance with the given instructions.

Yours Faithfully .......................... Aslam (Quantity Surveyor)

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TENDER ESTIMATION 5.2. DESCRIBE THE FACTORS THAT WILL BE CONSIDERED BY THE ESTIMATOR WHEN EVALUATING THE QUOTATION RECEIVED FROM SUBCONTRACTORS AND SUPPLIERS
Choosing the right suppliers involves much more than scanning price lists. Your choice will depend on a wide range of factors such as value for money, quality, reliability and service. How you weigh up the importance of these different factors will depend on your business priorities and strategy. the criteria for evaluating and awarding a contract is required to be stated in the tender documents these would normally be the most economically advantageous taking account of such factors as: PURCHASE PRICE: Lowest Price Technically Acceptable This approach is appropriate when best value is expected to result from selection of the technically acceptable offer with the lowest evaluated price. Price is important, but it shouldn't be the only reason you choose a supplier. Lower prices may reflect poorer quality goods and services which, in the long run, may not be the most cost-effective option. Be confident that your supplier can make a sufficient margin at the price quoted for the business to be commercially viable. OTHER WHOLE LIFE COSTS : It will involve Running costs, obsolescence, resale value or disposal cost, after sales service and technical assistance from supplier or sub-contractor DELIVERY: The requesting activity may provide instructions via the Purchase Request that delivery is a critical factor in choosing the prospective supplier or sub-contractor QUALITY : The estimator should have to check the quality requirement according to the specification prepared for the particular work DISCOUNT RATE : This is the important feather among the supplier or subcontractor because he can improve his profit through this discount and he can reduce his tender value so he can win a job through this CONTRACT TERMS : The main estimator responsibility is to consider the contract terms to continue the contract deal with a supplier in a fair manner PAST PERFORMANCE : The ability of well performance is a main reason in selecting subcontractor so the estimator should have to take attention in past performance of subcontractor with the same project BUSINESS PRACTICES : The estimator will look at his business deal with other contractor and check his practices in his business it will be useful to continue the deal for long period The above mentioned factors should have to consider by the estimator in evaluating quotation from supplier and subcontractor because it will be very helpful to win a job.

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TENDER ESTIMATION 5.3 DESCRIBE THE DIFFERENT FORM DISCOUNT OFFERED IN THE CONSTRUCTION INDUSTRY AND EXPLAIN HOW YOU INCORPORATE THEM IN PRICING. DISCOUNTS
Discounts are the quoted amount or stated cost which will deduct from the payments to the suppliers and subcontractors, depend on fulfillment of the conditions which are specified in the contract for acquiring discounts. Followings are two types of discounts accepted by the subcontractors and suppliers. Trade discounts Cash discounts

TRADE DISCOUNTS
Trade discounts apply particularly when there are standard price lists prepared by manufacturers or suppliers and when items may be sold direct to the public. The discount is varied to allow for fluctuations in prices to avoid frequent revision of such lists. Some suppliers allow large discounts for regular customers who purchase large quantities. Ex: Builders and plumbers may get, say, a 20% discount on the supply of sanitary fittings when compared with the retail price to the general public. Let us consider a supplier of Bricks. The supplier might allow trade discounts as given below. Quantity 5000 - 10000 Bricks 10000 - 15000 Bricks 15000 - 20000 Bricks Discounts 15% 18% 20%

If the buyer purchases more than 5000 Bricks then the buyer is entitled for a discount of 15 % from the marked price. Similarly if the buyer purchases more than 10,000 Bricks s, he could get a discount of 18%. Similarly if the buyer purchases more than 20,000 Bricks which are considered to be a large quantity, he could get a 20% discount rate. While the price of Bricks raised by 2%. Then the supplier could alter the discount rate without making any changes to the actual prices. In this case reducing the discount up to 3% for 1000-5000 Bricks would be satisfactory.

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CASH DISCOUNTS A cash discount is often given by suppliers and subcontractors to encourage early settlement of accounts. If the contractor settle the accounts to the suppliers and subcontractors before the original date than the contractor will get some percentage of discounts Ex: Let us consider that the electrical installation was carried out by a sub-contractor. The invoiced value of work done by the sub-contractor is Rs. 400,000 for a particular month. Usually the sub-contractors payment is done through the main contractor. If the main contractor settles the amount Rs. 400,000 within the specific period, the main contractor is entitled for a discount which is normally 5 % of the invoice value. So the contractor has to pay only Rs. 180000. But if the main contractor fails to make the payment within the specified time, then the main contractor has to pay the entire Rs. 400,000 Such discounts given by sub-contractors will motivate the contractors to make the payments earlier. Thus it will ensure the smooth function of the construction project. Likewise the suppliers also give such cash discounts to encourage the contractor to settle the payments quickly. Explanation of how to incorporate them into the tender The main contractor is always expecting about the discount to use it in pricing the tender. If the main contractor knows the amount of the discounts from the subcontractors or suppliers Contractor can reduce the rate of the work in that tender. So the tender price may be reduced. This might be increased the chance to win the tender. That is why the estimator or being consultancy Quantity Surveyors should have a thorough knowledge about the discounts and should apply the discounts while he is pricing the tender.

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CONCLUSION

As a quantity surveyor we have some responsibility construction industry out of them tender stage is a most important one. Because each and every constructions except some unique construction going to hand over to one of a best contractor only by calling tender. Here we are supposed to refer and suppose to understand something clearly about the knowledge of tender. And we have to have enough knowledge about the project that has been invited, client of the proposed project and about the consultant as well. Cause those are the important thing that we are going to have a relationship. So that we want to understand this all thing as a QS and we are the peoples who are going to handle with this kind of meter In this way I collected some useful information according to the lecturer requirement so I think it will be very useful document which explain basic knowledge of tender

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REFERENCES

UNESCO-NIGERIA TECHNICAL & VOCATIONAL EDUCATION REVITALISATION PROJECT-PHASE II NATIONAL DIPLOMA IN QUANTITY SURVEYING TENDERING AND ESTIMATING II COURSE CODE: QUS 210 QUANTITY SURVEYORS POCKET BOOK FIRST EDITION 2009 DUNCAN CARTLIDGE FRICS PUBLISHED BY ELSEVIER LTD ESTIMATING AND TENDERING FOR CONSTRUCTION WORK THIRD EDITION 2004 MARTIN BROOK BENG (TECH) FCIOB PUBLISHED BY ELSEVIER LTD WWW.GOOGLE.LK WWW.WIKIPIDIA.COM

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