PROFESSIONAL PRACTICE I [QSD 289]

Mohammad Nasharudine Shuib

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INTRODUCTION
WHAT IS TENDER? WHAT IS TENDERING? DIFFERENCE BETWEEN TENDER & CONTRACT TENDER NOTICE OPEN TENDER SELECTIVE TENDER

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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

Competitive Open Tendering Selective Tendering

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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 Competitive Open Advertisement Select Basis for Payment Sign Contract Selective Invitation to Bid

Choose Contractor

Specified Tenderin g Period

Tender Validity Period

Tender Submitted + Tender Deposit

Tender Closing Date

Late tenders returned

Tenders Opened
Evaluate Tenders
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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

Competitive Open Tendering Selective Tendering

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Most Effective Way Obtaining Competitive Rates Complete Design is Necessary

Competitive Tender

Open To All Contractors

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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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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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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 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

Complete design not necessary

Only negotiated with single contractor

Continuation contract

CHARACTERISTICS

Not competition

Established business relationship

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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Method of Selection

Negotiated
Choose Contractor Select Basis for Payment Sign Contract

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pre-qualification stage in an open bidding process eliminates unsuitable bidders & cut down administrative involved in high number. The process result in short list. Identifies the firm that have the necessary abilities to perform the required work. The pre-tender brief should contain enough information to indicate the size & complexity project, contract type & proposed time scale.

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A pre-qualification consist of submitting specific information: General name, company registration. Financial Information financial stability of the firm. Organization Information company structure & operational capability. Project Information Types of project successfully completed by the firm. Proposed Personnel - The experience of the personnel available for the project.
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 Pre-qualification

limits bidding to the contractors that have the experience & financial stability to complete the project. It is better to eliminate a contractor before bidding rather than show that a contractor is not qualified after that firm has submitted the low bid, thus avoiding wasted effort.

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Most Effective Way Obtaining The Best Contractor Limit to Experience & Financial Stability Contractors

Eliminate Unsuitable Bidders

Process Result In Short List

CHARACTERISTICS

Identifies Firm Have Abilities To Perform

Pre-tender Contain Enough Information

Invitation Through Invitation Letter

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Obtaining The Best Contractor

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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Limit to Experience Contractors

DISADVANTAGES

Limited to Certain Criteria of Contractor Only

Limit to Financial Stability Contractors

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 QUANTITY

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

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