Tenders

Tenders
Introduction
Tender is written offer submitted by the contractors to execute certain
work or supply of some specified articles or transport of materials at
certain rates with the terms and conditions laid down in the tender
documents.

It should be kept in mind that a tender document is just a proposal, it is

not a legal document like the contract document
In government work, it is generally required to select a contractor on
the basis of competitive tendering and to assure adequate competition,
at least three tenders need to be received for a project to make the
selection

A contract comprises a series of transactions, such as:

Notice inviting tender (NIT) or invitation of tenders
Submission of tenders by the contractors
Acceptance by the relevant body such as the government, etc.
Tenders

What does a Tender include?

A tender document essentially constitutes of the following:

information and instructions to tenders who are willing to apply

general conditions of contract

tender papers

non- omnibus clauses

civil and social infrastructure stipulations

guidelines on specific aspects

Tenders

Ways of Handling Tenders

Pre- qualification proposals are invited through open advertisement,

wherein the nature of the job is indicated in sufficient detail, and the
contractors are requested to give the details of their experience of
constructing similar projects, their financial resources, etc. from this a
short list of contractors is prepared for issue of tender documents.

A two envelope system is used for inviting tenders where the first one
includes pre- qualification proposal and the second one contains the item
rate or lump sum tender as the case may be. In this case, financial
proposals of only the firms which are considered competent to execute
the job on the basis of pre- qualification data will be opened. Rest of the
bids are returned unopened.
Tenders

Pre-bid Conference:
After tender documents are issued to short listed contractors, a pre- bid
conference is held by the employer, to which all the intending bidders are
invited.

In the conference, the job requirements are clarified and contract

conditions explained wherever explanation is sought. Thus, the contractors
would have a clear idea of the conditions of the contract (including their
legal implications ).

A summary of the conference is prepared and sent to all intending bidders,

to whom the contract documents have been sent , along with amendments
to the contract documents resulting from this conference.
Tenders

Receipt and Processing of Tenders:

With the tender, the bidders are also expected to provide an earnest
money deposit, which is a fixed amount stipulated in the tender in the
form of cash or bank guarantee, so as to ensure that the contractor does
not back out from his tender when it is under consideration nor from
executing the work after award of work. Tenders, unaccompanied by
earnest money deposit are rejected. Also, the tender should be submitted
exactly as per the provisions of the documents otherwise it is rejected as
non- responsive.
The tenders are opened in the presence of tenderers or their
authorized representatives. After opening, the tendered amounts are read
out by the officer in everybody’s presence. Suitable entries are made in a
register and signed by all those present.

Normally, the lowest tender conforming to the requirement stipulated in

the tender document is accepted.
Tenders

Award of Work:
The acceptance of the tender is communicated to the contractor
through the letter of award. This indicates the award of work to the
contractor for a specified sum with an advice to him to attend the office
of the employer to sign the agreement. This also stipulates the date of
commencement and the date of completion of work.

At this stage, the contractor is expected to furnish a bond or a bank

guarantee. If the contractor does not turn up to sign the contract or fails
to provide the performance guarantee by the stipulated time and date, the
work may be awarded to some other contractor and the former contractor
will have to forfeit the earnest money.
Tenders

Documents Required in Tendering:

Notice inviting tender

Tender form
Tender documents
Subsequent correspondence
LOI- letter of intent
Tender drawings
Earnest money deposit
Letter of award
Tenders
Global Tender:
For big and specialized job or design and manufacture, global tenders are
sometimes invited by the authority concern throughout the globe to get
competitive offers from various specialized firms or reputed
manufacturers all around the world.

Informal Tender:
A tender is said to be informal when-
• It is not submitted in the form sold by the department or by the due date
and time notified through NIT.
• It is not supported by the requisite money specified on the tender.
• Tender is not properly filled in or signed by the contractor or his
authorized representative holding power of attorney and witnessed by the
third party.
• Tender is qualified or is made conditional by way of adding indefinite and
uncertain liabilities of unusual character of it or by infringement of the
standard rule.
Note: A tender containing any of the above defects is liable to summary
rejection.
Tenders

Sample of Tender:

A Sample of
the Tender
Notice of
the National
Aluminum
Company
Limited.