Tendering documentation
- 1. Name : B.N. Neranja TENDERING DOCUMENTATION PRESENTATION REPORT
- 2. PAGE 1 ACKNOWLEDGMENT We express our sincere thanks to everyone who was helped us.
- 3. PAGE 2 CONTENTS 1. Introduction of Tendering 2. Principles of Tendering 3. Types of Tendering 4. Tendering Process 5. Tender Documents
- 4. PAGE 3 AIM OF THE PROJECT The aim of the project is study and get better knowledge about “Tender, Tendering process and Tender Documents” and presented it in the classroom, by using presentations. Also this helps to act as a team work.
- 5. PAGE 4 GROUP MEMBERS B.N. Neranja (C) S.A.C.M. Subasinghe T.M.C.R.B. Thennakoon H.M.D.N. Herath D.A.S. Jayathilaka
- 6. PAGE 5 1. INTRODUCTION The construction industry in both developed and developing countries may be viewed as that sector of the economics which, through planning, design, construction maintain, repair and operation, transform various resources into constructed facilities. The types of public and private facilities produced range from residential and non- residential buildings to heavy construction, and also these physical facilities play a critical and highly visible role in the process of development. For this type of construction projects, mainly, there are three group are participated. They are client, consultant and contractor. Under this people, there are lots of stake holders; people who are connected with the project directly or indirectly are working. On the construction activities, crores of rupees are spent. Therefore, money is the main factor of a construction project. Therefore, the client is looking for a select a best, suitable and cheapener contractor for his works. For that, the acceptable and best method is tendering method. Tendering is the formal, documental, structural process, where the tender undertake to enter into a formal agreement with the client. There are lot of things we have to understand about tendering. If we are going to work with tendering process, we must have a better knowledge about tendering system. If not, we will fail with the project, and also as a company and as quantity surveyor. Therefore, we found lots of information about this topic and we got helps from internet and also books like book of tendering printed by ICTAD. We would like to thanks Mr. Piumal Amarasinghe, Lecturer in Quantity Surveying Practice for his advices. We did a presentation before and this is the report of it. We make this report clearly as we can to understand get knowledge about tendering to anyone who read this.
- 7. PAGE 6 TENDERING WHAT IS TENDER? DEFINITION Tendering is the process of choosing the best and cheapest company to supply goods and services by asking several companies to make offers for supplying the goods and services. 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.
- 8. PAGE 7 2. PRINCIPLES OF TENDERING The purpose of these principles for Tendering is to provide a framework for the effective, consistent and efficient management of tendering practices throughout any construction project. The principles set out in this document can be equally applied to any industry involving the delivery of a new product or service. Successful projects have generally started with the use of best practice tendering processes. These are the basic principles of tendering process, • All aspects of the tendering process must be conducted with honestly at all levels of the industry. • A clear understanding of the rights and obligations of both parties. • Parties must confirm to all legal obligations. • Parties must clearly identify ownership. • Parties must not submit tenders without a firm goal. • Parties must not engage in any practice which gives improper advantage. • Condition of tendering must be the same for tender on any particular project. • Clients must clearly specify their requirements in the tender document and indicate criteria for evaluation. • All the information provided in the course of tendering must be protect.
- 9. PAGE 8 3. TYPES OF TENDERING The majority builders still obtain much of their work by system of tendering. There are three principle method of choosing a contractor. They are, 1. Open Tendering 2. Selective Tendering 3. Negotiated Tendering 1. Open Tendering This usually takes the form of an advertisements in a national or local newspapers inviting contractors to apply for tendering competition for carrying out the work. The main characteristic of which are given usually the deposit is required in order to discourage frivolous applications. The deposit is returnable on submission of a tender. In this method allows any contractor to submit a tender to an advertised project. Process Client advertises openly in the press or the trade publications inviting contractors to apply for the project Contractor that is able to undertake the project would request a tender document After receiving the tender from the architect, the contractor may be required to give a deposit and to ensure a bona fide tender. This is done to filter out the contractors who are not interested in submitting a tender. Advantages Keep competition from large number of applicant. Possibility to get competitive price. No chance for favourism. Provide opportunities to new comers, unknown contractors to enter to the market. Disadvantages Time and cost taken to review the large number of applicant. The cost of tendering accumulated to the industry and general cost to the industry is high. Difficult to evaluate and select best one from wide range of applicant.
- 10. PAGE 9 2. Selective Tendering Contractor apply to be included on an approved list maintain by an employing body often an architectural practice, local authority or statutory body. These organizations have extensive knowledge and experience of individual contractors and regularly review contractor performs and approval list from such list. There are able to select contractors most suited to the contract the number invited will according to the value of the contract. Note Compile a list of preferred builders for the project. Based on builders established skill. Reliability and proven competence for the type of work given. Each contractor is bend ask to provide a tender. Advantages Cost of tendering is reduced. Time consuming for the tender evaluation is reduced. Allow only capable and approved firms are to be tender. Provide limited competition and easy to screen and select. Disadvantages Let’s competition forces high tender sum. Opportunities for collusion among competitors and mislead the time. Mis opportunities. ( new comers) Industry complain those who have not short listed.
- 11. PAGE 10 3. Negotiated Tendering In this process only well reputed contractors are been negotiated by inviting them to submit their tenders. Client can contractors determine the perimeters for negotiation before commencement of the project. The maintenance of positive relationship during the negotiation process in essential. Why client went to negotiate? Business relationship Contractor, finance project ( client find difficult to finance then negotiate with the builders who is willing to finance the project) Continuation of contract Special circumstances ( only one contractor available to work ) Special expertise of equipment Wish to take advantages of the builder’s specialized knowledge at the design stage. To have quick start Advantages Expected quality and functions can be achieve more. Speed up the entire project. The project objective and definition may be managed. (builders involvement of the design stage) Disadvantages Non-competition forces for high tender sum. Less formality make course more contract administration inquiries. Lack accountability.
- 12. PAGE 11 4. TENDERING PROCESS Tendering process can be divided in to six stages. These stages are shown in below picture. Stage 1: Preparation Final completion of drawings, specification, measurement / take-off process. Choose conditions of contract. Parties involved: architect, engineers, QS, client, project manager Stage 2: Approval to tender Discussion and decision on type of tender to be used. Selection of tender: Open Selective Negotiate Parties involved: client, consultant, project manager. Stage 1: PREPARATION Stage 2: APPROVAL TO TENDER Stage 3: DOCUMENTATION Stage 4: INVITATION Stage 5: PROCESSING Stage 6: AWARD CONTRACT
- 13. PAGE 12 STAGE 3: TENDER DOCUMENTATION Letter of invitation to tender Letter of acceptance Bills of quantities Relevant drawings Schedule of rates Stage 4: 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 Stage 5: Processing Received tender submitted by contractor Tender assessment / evaluation Completed tenders are received Arithmetical check Reasonable tender sum Reasonable completion time Capabilities of tenderers under considerations Tender recommendation / report – tender board Stage 6: Award contract Pre-award meeting with contractors – validation of lowest complying bid Validate lowest bid - Pre-contract meeting with contractor for contract signing Approval by tender board / treasury (tender exceeds RM10 mill.) – an acceptance of tender form is issued to tenderer , signed by the authorized officer
- 14. PAGE 13 5. TENDER DOCUMENTS Tender documents are prepared to seek tenders (offers). Also tender document help to maintain & protect the relationship between client & contractor. Documents of tender 1. Invitation for bid 2. Instruction to bidder 3. Standard forms 4. Condition of contract 5. Form of tender 6. Bidding data 7. Contract data 8. Specifications / general and special 9. Bills of quantities (BOQ) with pricing preambles 10.Drawings 11.Schedules of additional information Sample copy of letter of acceptance Sample copy of bank guarantee for performance bond Schedule of day work rates Sample copy of bank guarantee for advance payment Subsoil investigation report Special/particular specifications Notice to Tenderers This document contains a Project Summary, a listing of Tender Documents, key dates, validity period, contact details, number of copies required and details of tender submission location and timing. Conditions of Tendering This document details the overall Tender Process including the Delivery Method, Probity issues, Communication issues, the Criteria for Selection and the Evaluation Process.
- 15. PAGE 14 Tender Form & Schedules These documents request specific information from the Tenderers concerning the works. For example, Tenders are generally required to provide an overall cost, a breakdown of this cost, a program, details of manpower, plant and equipment, personnel, subcontractors and methodologies. The Tender Form is a formal statement of the Tenderer’s offer to supply services in accordance with the Tender Documents. Conditions of Contract This document contains the General Conditions of Contract which sets out the contractual basis for carrying out the works. In addition, the Special Conditions are sometimes included which are unique to the client and/or project. Specification Depending on the type of Delivery Method chosen, this document may be a Project Brief or a detailed Specification of the works. These documents set out the performance and technical criteria for the project. Drawings The number and standard of drawings provided. The main tender document – BOQ Item No. Description Unit Quantity Rate Amount
- 16. PAGE 15 CONCLUSION We can conclude that tendering process and work with tendering method is a system or process that should use advisably, intelligently. Basically, these things are the job, duty and responsibilities of the Quantity Surveyor. As a Quantity Surveyor, we should have a better knowledge about tendering. If not, it is directly affect to the client, company and also our job of quantity surveying. If we use tendering method correctly and select a suitable contractor for the project, it will helps to build the project at the due time, with efficiently, quality and also can save money. For succeed these hopes of the client, best way is use the tendering to select suitable contractor. In this presentation and process of making this report, we got more knowledge about tendering. And also, we tried our best to describe these information as correctly. THANK YOU ..