Advantages Of Open Tendering Construction Essay

Published: 23, March 2015

Open tendering is a one-stage bidding process, where all interested and

responding to contract notice will be invited to submit a tender. The contract
notice states where to obtain tender documents and the last date when tenders
will be accepted. Open tender is open to public & all the interested firms can
apply for the contract.

Advantages of open tendering

No favourism (everyone can apply for the tender)

High competition in pricing ( client will take good prize)

New firms can enter into the market

Increased employment opportunities ( new firms comes)

New experience (new technology)

Helps contractors to grow

Contractors get new client

Disadvantages of open tendering

Selected contractor might not suit the project (ex: no experience)

Inexperienced firms can enter into the market

Unknown firms can enter into the markets

Waste of estimating time

Read more: http://www.ukessays.com/essays/construction/advantages-of-opentendering-construction-essay.php#ixzz41fLjbjvJ

Selective tendering
A process of competitive tendering for award of the contract for construction
whereby the owner selects the constructors who are invited to tender to the
exclusion of others, as in the process of open tendering. It means the client
selects the contractor from limited list & invitation to tender is made by client to
the contractor by a letter.

In selective tendering short listing can be done by,

Invitation

ICTAD category

Prequalification (financial)

Post qualification

Negotiation

In selective tendering there can be two stages,

One stage selective tendering

Two stage selective tendering

One stage selective tendering

Client advertise for contractor to apply for short listing

Short list the contractors who are considered suitable to do the work & approved
list is maintained by the client. (competition)

Two stage selective tendering

Single stage for competition, double stage for competition plus early start of
work at site.

Contractor's experience/ practical knowledge is useful at the design stage

First stage

Inviting for tender

Inform about 2 stage tender

Pre select the contractor (a simple BOQ)

Contractors give proposal for the design

Second stage

Negotiate the rates with the contractor for 2nd time

Advantages of Selective tender

Well known contractor

Good quality

Less aggregate cost for tender

Less evaluation time

Disadvantages of Selective tender

Favourism

Less price competition

Cartel tendering

New firms cannot enter in to the market

Regular updating is necessary

Read more: http://www.ukessays.com/essays/construction/advantages-of-opentendering-construction-essay.php#ixzz41fM49ecE

Selective tendering

A tender is a submission made by a prospective supplier in response to an

invitation to tender. It makes an offer for the supply of goods or services. In
construction, the main tender process is generally the selection, by the client, of
a contractor to construct the works. However, as procurement routes have
become more complex, so tenders may be sought for a wide range of goods and
services.
Irrespective of the nature of the goods or services that are being sought,
securing tenders generally follows one of a number of basic procedures:
Open tendering.
Selective tendering.
Negotiated tendering.
Serial tendering.
Framework tendering.
Open tendering allows anyone to submit a tender to supply the goods or services
that are required, generally in response to an advert giving notice that the
contract is being tendered. On larger projects, there may then be a prequalification process that produces a short-list of suitable suppliers who will be
invited to prepare tenders. This sort of pre-qualification process is not the same
as selective tendering.
Selective tendering only allows suppliers to submit tenders by invitation. A preselected list of possible suppliers is prepared that are known by their track record
to be suitable for a contract of the size, nature and complexity required. They
might then be asked if they would be interested in tendering for the contract,
and then based on the responses received, a number of them invited to tender
(generally no more than 6). From the tenders received, a preferred tenderer is
selected based on criteria such as price and quality and negotiations entered
into.
Consultants or experienced clients may maintain approved lists of prospective
suppliers appropriate for particular types of contract and then regularly review
performance to assess whether they should remain on the list.
Selective tendering may be particularly appropriate for specialist or complex
contracts, or contracts where there are only a few suitable firms. Selective
tendering will tend to be faster than open tendering, and can be seen as less
wasteful, as there is no pre-qualification process as part of the tender procedure
itself, and only suppliers that are known to be appropriate for the proposed
contract are invited to prepare tenders. It can also give clients greater
confidence that their requirements will be satisfied.
However, it can exclude smaller suppliers or those trying to establish themselves
in a new market, it can reduce the potential for innovation, and it can be seen to
introduce bias into tendering as firms may be excluded from approved lists for

unknown reasons, because of a lack of awareness, or because of personal

preferences. It can also result in prospective suppliers continually contacting
clients and consultants to check that they are on the appropriate lists.
On public projects, or projects that include a publicly-funded element it may be
necessary to advertise contracts. This is a requirement of the Public Contracts
Regulations, intended to open up public procurement within the European Union
and to ensure the free movement of supplies, services and works (see OJEU for
more information).
Selective tendering can be either single stage or two stage. Two-stage tendering
is used to allow early appointment of a supplier, prior to the completion of all the
information required to enable them to offer a fixed price. In the first stage, a
limited appointment is agreed allowing them to begin work and in the second
stage a fixed price is negotiated for the contract

A 'tender' is a submission made by a prospective supplier in response to an

invitation to tender. It makes an offer for the supply of goods or services. In
construction, the main tender process is generally the selection, by the client, of
a contractor to construct the works. However, as procurement routes have
become more complex, so tenders may now be sought for a wide range of goods
and services.
Irrespective of the nature of the goods or services that are being sought,
securing tenders generally follows one of a number of basic procedures:
Open tendering.
Selective tendering.
Negotiated tendering.
Serial tendering.
Framework tendering.
Open tendering allows anyone to submit a tender to supply the goods or services
that are required. Generally an advert will be placed giving notice that the
contract is being tendered, offering an equal opportunity to any organisation to
submit a tender.
On larger projects, there may then be a pre-qualification process that produces a
short-list of suitable suppliers from the respondents expressing interest in the
contract. This short list will then be invited to prepare tenders. The selection of a
short list can include pre-qualification questionnaires and interviews. This sort of
pre-qualification process is not the same as selective tendering. Selective
tendering only allows suppliers invited from a pre-selected list to take part in the
tender process.

Open tendering has been criticised for being a slow and costly process,
attracting tenders or expressions of interest from large numbers of suppliers,
some of whom may be entirely unsuitable for the contract and as a result it can
waste a great deal of time, effort and money. However, open tendering offers the
greatest competition and has the advantage of allowing new or emerging
suppliers to try to secure work and so can facilitates greater innovation. The
number of firms tendering can be reduced (ideally to a maximum of 6) by a prequalification process, and if this uses a standard pre-qualification questionnaire,
then the time wasted by unsuccessful applicants can be minimised.
Whilst often seen to be more efficient, selective tendering can exclude potential
suppliers, it can be seen to introduce bias into the process, and it can result in
prospective suppliers continually contacting clients and consultants to check that
they are on the appropriate lists.
On public projects, or projects that include an element of public funding, it may
be necessary to advertise contracts as a requirement of the Public Contracts
Regulations. This is intended to open up public procurement within the European
Union and to ensure the free movement of supplies, services and works (see
OJEU for more information).
Open tendering can be either single stage or two stage. Two-stage tendering is
used to allow early appointment of a supplier, prior to the completion of all the
information required to enable them to offer a fixed price. In the first stage, a
limited appointment is agreed allowing them to begin work and in the second
stage a fixed price is negotiated for the contract.

A tender is a submission made by a prospective supplier in response to an

invitation to tender. It makes an offer for the supply of goods or services.
In construction, the main tender process is generally for the selection of the
contractor that will construct the works. However, as procurement routes have
become more complex, so tenders may be sought for a wide range of goods and
services (for example on a construction management contract the works are
constructed by a number of different trade contractors each contracted to the
client) and contractors may take on additional functions such as design and
management. There is also an increasing tendency for suppliers to be
aggregated into single contracts, for example, 'integrated supply teams' on
public projects may include; the main contractor, designers, sub-contractors,
suppliers, facilities mangers and so on.
Irrespective of the nature of the goods or services that are being sought, the
process for securing tenders may take a number of different basic forms:
Open tendering

Open tendering allows anyone to submit a tender to supply the goods or services
that are required. Generally an advert will be placed giving notice that the
contract is being tendered, and offering an equal opportunity to any organisation
to submit a tender.
On larger projects, there may then be a pre-qualification process that produces a
short-list of suitable suppliers who will be invited to prepare tenders. This sort of
pre-qualification process is not the same as selective tendering (see below).
Open tendering has been criticised for attracting tenders / expressions of interest
from large numbers of suppliers, some of whom may be entirely unsuitable for
the contract and as a result it can waste a great deal of time, effort and money.
However, open tendering offers the greatest competition and has the advantage
of allowing new or emerging suppliers to try to secure work.
For a more detailed description of the procedures for open tendering see Tender.
Selective tendering

Selective tendering only allows suppliers to submit tenders by invitation. A preselected list of possible suppliers is prepared that are known by their track record
to be suitable for a contract of the size, nature and complexity required.
Consultants or experienced clients may maintain approved lists of prospective
suppliers and then regularly review performance to assess whether suppliers
should remain on the list.
Selective tendering can give clients greater confidence that their requirements
will be satisfied and should reduce the wasted effort that can be involved in open
tendering. It may be particularly appropriate for specialist or complex contracts,
or contracts where there are only a few suitable firms. However, it can exclude
smaller suppliers or those trying to establish themselves in a new market.