Module 4 lecture 1
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The document discusses the tendering process and key elements of a tender. It defines a tender as an offer to complete a project for a specified price and time. The main stages of the tendering process are preparation, approval, documentation, invitation, processing, and contract award. Key elements of tender documents include drawings, specifications, bill of quantities, conditions of contract, forms of tender and agreement, and performance bonds.
Module 4 lecture 1
- 1. Tendering and its Process MODULE 4 CONTRACT MANAGEMENT -TENDER AND ITS PROCESS
- 2. Table of contents - Tender ? - Tender vs Contract - Purpose of tender - Invitation of tender/tender notice - Types of tender - Tendering Process - Prequalification - Administrative approval - Technical sanctions - Feature or element of Tender documents -Award of Contract -Letter of intent -Letter of acceptance -Notice to proceed MODULE 4 CONTRACT MANAGEMENT -TENDER AND ITS PROCESS
- 3. Tender • an offer to contractor to do the work for a certain amount of money. • incorporate time and other conditions. • to carry out the contract requirements. • main reason is to complete a project. • based on bill of quantities (BOQ) & specifications. • 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. MODULE 4 CONTRACT MANAGEMENT -TENDER AND ITS PROCESS
- 4. Tender vs Contract MODULE 4 CONTRACT MANAGEMENT -TENDER AND ITS PROCESS TENDER The term tender formally means an invitation to trade/build/supply under the terms of offer. CONTRACT A contract is the term used when two parties have reached agreement.
- 5. Purpose of tender MODULE 4 CONTRACT MANAGEMENT -TENDER AND ITS PROCESS • To select a suitable contractor at a time appropriate to the situation of the project. • To obtain an acceptable tender or offer upon which a contract can be let. • To ensure the completion of project at scheduled time. • To protect the interest of all stakeholders.
- 6. Invitation of tender/tender notice MODULE 4 CONTRACT MANAGEMENT -TENDER AND ITS PROCESS It is a brief description of the job being tendered Published in Newspapers and on the Internet. Internet is a very cost effective way of publishing the tenders. Tender wizard, e-Procurement of different states, Central Public Procurement Portal (CPPP) of Government of India, E-Tender Portal (AAI), ISRO e- procurement, BSNL Tenders, e-Procurement System for Organisations under MoD.
- 7. Invitation of tender/tender notice Contd... MODULE 4 CONTRACT MANAGEMENT -TENDER AND ITS PROCESS 1. Name of the Project. 2. Name & Address of the organization offering the tender. 3. Name of work, materials or services. 4. Place of work location. 5. Approximate estimated cost of work. 6. Earnest Money. 7. Period of completion. 8. Date on which the Tender Document sale commences. 9. Date and time up to which tender documents can be obtained. 10. The cost of tender documents. 11. Due date of submission 12. Eligibility Criteria
- 8. Invitation of tender/tender notice Contd... MODULE 4 CONTRACT MANAGEMENT -TENDER AND ITS PROCESS
- 9. Types of tender MODULE 4 CONTRACT MANAGEMENT -TENDER AND ITS PROCESS • Open tender open to all qualified bidders published in the newspaper and internet chosen on the basis of price and quality. most effective way of obtaining many competitive rates. • Close tender / Selective tender open to bidders in the category stated in the notice only contractor of known reputations. contractor who submit the lowest tender. chosen for their expertise and experiences. • Negotiated tender only one contractor is approached. architect and other members of the design team. As per the wish of client the contractor or firm will be selected.
- 10. Tendering Process MODULE 4 CONTRACT MANAGEMENT -TENDER AND ITS PROCESS Stage 2: APPROVAL TO TENDER Stage 1: PREPARATION Stage 3: DOCUMENTATION Stage 4: INVITATION Stage 5: PROCESSING Stage 6: AWARD CONTRACT
- 11. Tendering Process Contd... MODULE 4 CONTRACT MANAGEMENT -TENDER AND ITS PROCESS Preparation: • Final completion of drawings, specification, measurement / take-off process. • Choose conditions of contract. • Parties involved: architect, engineers, QS, client, project manager. Approval of tender: • Discussion and decision on type of tender to be used. • Selection of tender type: open, selective & negotiate • Parties involved: Client, Consultant, Project Manager
- 12. Tendering Process Contd... MODULE 4 CONTRACT MANAGEMENT -TENDER AND ITS PROCESS Documentation: Compilation of: Letter of invitation to tenderers Articles of agreement / conditions of contract Form of tender Form of tenderer’s details. i.e: contractor’s registration, organization background, track record (past and present projects) Letter of acceptance Bank and insurance guarantee forms (performance bond) Bank and insurance guarantee forms (advance payments) Specifications Summary of tender Schedule of rates Relevant drawings
- 13. Tendering Process Contd... MODULE 4 CONTRACT MANAGEMENT -TENDER AND ITS PROCESS Invitation: Based on selection of tendering methods • Open / competitive / bid tender – produce tender notice. • Selective – shot listed contractors will be invited to tender if they wish. • Negotiated – only one contractor is approached- direct entry to project.
- 14. Prequalification MODULE 4 CONTRACT MANAGEMENT -TENDER AND ITS PROCESS • Screening of potential contractors, suppliers, or vendors to develop a list of qualified bidders who will receive the invitation-to-bid (ITB)/ tender documents. • Parameters: Financial position, Previous experience, Technical expertise, Management ability, Equipments, Management ability, Workmanship and ability, Litigation history etc,. • Document proof need to submit along with bid document. • Two phase bidding system: Technical and Financial bidding.
- 15. Administrative approval MODULE 4 CONTRACT MANAGEMENT -TENDER AND ITS PROCESS • Budgetary approval from Government. • Formal acceptance by the department. • An approximate estimate and preliminary plans are necessary to explain the proposals. • After receiving the administrative approval, detailed drawings, design and the estimated cost etc. are prepared by the engineering department and submitted to the administrative department for sanction. • Department secretary provides the administrative approval after the consent of minister incharge.
- 16. Technical Sanction MODULE 4 CONTRACT MANAGEMENT -TENDER AND ITS PROCESS • After receipt of administrative approval and expenditure sanction, a detailed estimate is further sanctioned by a competent technical authority of the engineering department. • Ensures that the proposals are structurally sound and the estimate is accurately calculated. • Technical Sanction should be taken before inviting tenders to execute the work. • Chief Engineer to Assistant Executive Engineer provide the Technical Sanction based on the amount of work.
- 17. Features or element of Tender documents MODULE 4 CONTRACT MANAGEMENT -TENDER AND ITS PROCESS 1. Tender Drawings 2. The specification General requirements Specification of workmanship and materials 3. Bill of Quantities 4. Conditions of Contract 5. Form of Tender 6. Form of Agreement 7. Form of bond
- 18. Features or element of Tender documents MODULE 4 CONTRACT MANAGEMENT -TENDER AND ITS PROCESS Tender Drawings: • Tender drawings describe the project detail. • Help the contractor to arrive realistic price. • Ensure no significant changes in the project cost. The specification • General Specification Includes relevant details of the site and information on items which do not form part of the permanent works: Accommodation (offices, toilets), stores, workshops, fencing, watchman, protection, temporary roads and lighting, insurance, scaffolding, administration and office equipment, cost of staffs Contd...
- 19. Features or element of Tender documents MODULE 4 CONTRACT MANAGEMENT -TENDER AND ITS PROCESS Specification of workmanship and materials • It deals with the detailed requirements of project. The type, the quality and method of fixing (or fabrication) and testing of every item for incorporation in permanent works is described. • Typical contents of ‘specification of workmanship and materials’ are: Demolitions excavations and earthwork, drainage and sewerage, piling and ground anchors, mass reinforced concrete, brickwork, masonry, waterproofing, metalwork, structural steelwork, type of cement to be used, type of aggregate, type of water, type of mixer required, trial mixes required, test results required, method of mixing, tests on mixing, methods of transporting and placing, tests on concrete produced, methods of curing, stripping times for formwork, etc,. Contd...
- 20. Features or element of Tender documents MODULE 4 CONTRACT MANAGEMENT -TENDER AND ITS PROCESS Bill of quantities (BOQ) • It lists every work activity or component part necessary for the execution of the (permanent) works. • These quantities are generally prepared by the Engineer’s staff /quantity surveyors. • Essential to cost control. • Arranged to same sections as specifications and prepared from tender drawings. Contd...
- 21. Features or element of Tender documents MODULE 4 CONTRACT MANAGEMENT -TENDER AND ITS PROCESS Bill of quantities (BOQ) Contd... Item No. Particulars Quantity Unit Rate Amount 1 Earthwork in excavation 10,55,273 cft 7 73,86,911 2 PCC 1:4:8 for Footings 38,768 cft 85 32,95,280 3 Shuttering for Footing 23,423 sft 26 6,08,998 4 Footing concrete 1:2:3 85,168 cft 100 85,16,800 5 Pedestal 5,094 cft 100 5,09,400 6 Plinth beam shuttering 18,184 sft 26 4,72,784 7 Plinth beam concrete 5,338 cft 100 5,33,800 8 Refilling of Earth 18,76,700 cft 2 37,53,400 9 PCC 1:4:8 for Basement 38,768 cft 35 13,56,880
- 22. Features or element of Tender documents MODULE 4 CONTRACT MANAGEMENT -TENDER AND ITS PROCESS Conditions of Contract Contd... • Defines the responsibilities and liabilities of the parties to the contract. • Describe the method of administration (by Engineer) • Define the terms under which the work is to be carried out, the relationship between the Employer and the Contractor, the powers of the Engineer and the terms of payment.
- 23. Features or element of Tender documents MODULE 4 CONTRACT MANAGEMENT -TENDER AND ITS PROCESS Form of Tender Contd... • Standard letter of offer by the Contractor to execute the works. • Prepared by the Engineer and signed by the contractor. • Contains the main points of the offer: Starting date, Duration, Project cost.
- 24. Features or element of Tender documents MODULE 4 CONTRACT MANAGEMENT -TENDER AND ITS PROCESS Form of Agreement Contd... • Standard form of agreement is the legal contract between the promoter and the contractor. • Evidences the agreement of the Employer to pay the price indicated in the contractor’s tender and the contractor’s agreement to undertake the works in accordance with the tender documents. • Names of parties, list of contract documents, and signatures of parties.
- 25. Features or element of Tender documents MODULE 4 CONTRACT MANAGEMENT -TENDER AND ITS PROCESS Form of Bond Contd... • It is signed by both the contractor and client evidencing their agreement to pay a sum of money to the Employer in the event of the contractor’s default. • Terms and conditions if the either party fail to perform the duties • Guarantee in two ways. • The amount of bond is 10% of the contract sum.
- 26. Award of Contract MODULE 4 CONTRACT MANAGEMENT -TENDER AND ITS PROCESS • Notice to a bidder of the acceptance of the submitted bid. • Written confirmation of an award of a contract by client to a successful bidder. • Stating the amount of the award, the award date, and when the contract will be signed.
- 27. Letter of intent (LOI) MODULE 4 CONTRACT MANAGEMENT -TENDER AND ITS PROCESS • Interim agreement that summarizes the main points of a proposed deal. • Does not constitute a definitive contract but signifies a genuine interest in reaching the final agreement subject to due diligence, additional information, or fulfilment of certain conditions. • The language used in writing a letter of intent is of vital importance. • Memorandum of understanding' or pre-contract.
- 28. Letter of acceptance MODULE 4 CONTRACT MANAGEMENT -TENDER AND ITS PROCESS • Written communication by a successful bidder to client. • Formal acceptance of the bided project. • Confirms the details of the client's offer including the project cost, perquisites, conditions and project duration.
- 29. Notice to proceed (NTP) MODULE 4 CONTRACT MANAGEMENT -TENDER AND ITS PROCESS • Letter from the client/ owner) to a contractor stating the date that the contractor can begin work subject to the conditions of the contract. • The performance time of the contract starts from the NTP date.
- 30. Reference MODULE 4 CONTRACT MANAGEMENT -TENDER AND ITS PROCESS • https://www.procurement.act.gov.au/prequalification/preq ualification_q_and_as. • https://www.academia.edu/5114663/LECT_2_- _TENDER_and_CONTRACT?auto=download. • http://www.ques10.com/p/5658/explain-detailed- specifications-administrative-a-1/. • http://staff.fit.ac.cy/eng.ls/Skevi/ACEC438/ACEC438%2 0Tender%20documents%20presentation.pdf.