Unit 5 Tendering
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After administrative approval and budgeting, a tender is prepared to invite experienced contractors to execute a work. The tender includes details of the work, terms, and conditions. There are three methods to invite tenders: public/open tender, limited/selected tender, and single tender. For public tenders, a notice is published to allow any eligible contractor to apply. Limited tenders are sent only to reputed contractors for specialized works. Single tenders are used for proprietary items and involve negotiating with one contractor. The tender documents provide full specifications and requirements for contractors to quote competitive bids.
Unit 5 Tendering
- 2. Tendering INTRODUCTION • After getting Administrative approval, Technical sanction and budget approval of any work its tender is prepared and invite for interested contractor to carry out execution of work. • Experienced and technically sound contractor willing to do work, will fill this tender and quote amount of tender at reasonable rate. • After opening of tender by government department or concern authority, tender will be awarded to lowest amount quoted contractor, and he is ready to execute work as per terms and conditions, mentioned in tender.
- 3. DEFINITION OF TENDER • Tender is defined as offer in writing for execution of certain specified work or for supply of specific materials subject to certain terms and conditions such as rates, time limit etc. • Depending upon type of contract, the tender may be classified as item-rate tender, lump-sum tender, cost-plus tender, labour tender or demolition tender. • - Contractor is supposing to study plans, specification of work to be executed, term & condition etc mentioned in tender; before filling, quoting and submitting tender.
- 4. METHODS OF INVITING TENDER • There are three methods of inviting tender : • (1) Public tender or open tender. • (2) Private tender or limited tender or selected tender. • (3) Negotiated or single tender.
- 5. 1 Public tender or open tender This type of tender should be invited in open and public manner by : • (a) Advertisement in local newspapers. • (b) Notice in regional language and also in English to be displayed in public place / department office. • (c) Publish tender on tender website / department portal. • - It is compulsion for work costing more than Rs. 25,000, a tender notice should be published in local leading news paper have large coverage. • Mostly all public work to be advertised in local newspaper by giving public tender notice, so that any eligible new contractor can submit his tender. • By this method, all contractor get equal opportunity. • There are chances of the getting work executed at the cheapest rate. • But there is possibility of handling over work to unknown, inexperienced and less qualified contractor which may lead to dispute, sub-standard quality of work, delay in completion of work etc. • This tender is suitable for public work but not suitable for specialized job
- 6. 2 Private tender or limited tender or selected tender IN THIS CASE, TENDERS ARE INVITED FROM THE LIMITED NUMBER OF REPUTED CONTRACTORS, FOR EXECUTION OF WORK. THIS RESULTS INTO FAIR COMPETITION ON THE LIMITED SCALE AND ELIMINATE NEW INEXPERIENCED CONTRACTOR. THIS METHOD IS ADVANTAGEOUS FOR WORKS OF SPECIALIZED NATURE, WHICH AN ORDINARY NEW CONTRACTOR WILL NOT BE ABLE TO COMPLETE SATISFACTORILY. IT LEADS TO SPEEDY AND SUCCESSFUL COMPLETION OF WORK. THIS METHOD IS SUITABLE FOR CARRYING OUT PRIVATE WORK.
- 7. 3 Negotiated or single tender — It is similar to limited tender but instead of inviting tenders from the limited contractor, single well- known reputed contractor is invited. — This method is adopted in case of execution of work of specialized nature or for supply of articles of proprietary nature. - Because of no fair competition, this method 'proves to be costly. - This method is found to be more advantageous, as execution of work is completed before target time without sacrificing its quality.
- 8. TENDER NOTICE • Tender notice is very important document for any work. For carrying out work, a notice is drafted and published in local newspaper or on tender website under heading Tender Notice’ to create interest of contractor. • All tender notice should be published in standard format which includes name of work, estimated cost time limit earnest money deposit, security deposit detail etc.
- 9. TENDER NOTICE 1. Points to be included while drafting tender notice : 2. Name of agency or department inviting tender. 3. Name of work and its exact location. 4. Estimated cost of work. 5. Eligible class of contractor. 6. Time limit for completion. 7. The place and time where contract document can be seen, and blank tender form can be obtained 8. The cost of blank tender form. 9. Specification of work (Schedule B or BOQ) and conditions of contract. 10. The last date, place and time before which tender should be submitted. 11. Date of pre-bid conference if any. 12. Date, place and time for opening the tender 13. Earnest money to be deposited along with tender. 14. Security deposit to be paid (applicable only for successful contractor whose tender is awarded). 15. Validity and right to reject any or all tenders and name of authority accepting tenders.
- 10. PRE-QUALIFICATION OF CONTRACTORS • In this process, the capability / competency of the contactors is determined before the tenders for the work are invited. • The tenders are then supplied / offered only to those contractors, who are qualified for the work / job. • Normally, a contractor will be required to fill up a detailed questionnaires form under this process. This form contain : • Information regarding contractors past experience • Present work in hand • Financial stability • Technical qualifications v • Plants and equipments After carefully studying and analyzing these facts, the officer in charge decides the category of contractor and accordingly put his name in schedule of the category. Officer then invite only selected contractors to quote tender.
- 11. PRE-QUALIFICATION OF CONTRACTORS Advantages • Officer have sufficient time for decision and analysis of contractor. • Sound contract, since unfit contractor omitted previously. • Unqualified contractor save their time in studying and submission of tender since they are omitted before tender invite. • Fair competition among only qualified contractors. • Better quality of work will be done because of selection of quality contractors. Disadvantages • No real competition, since only selected contractors permit to fill tender. • Doubt of partiality against officer in any case, during prequalification of contractor. • Contractor need to fill up complicated questionnaire form.
- 12. TENDER DOCUMENTS • Tender set include following documents : • (1) Title page : Regarding the agreement number • (2) Index • (3) Tender Notice • (4) General Instructions • (5) Special conditions • (6) Form of contract: A,, A2, B,, B2 form • (7) Various contract clauses, terms and conditions • (8) Schedule ‘A’ : Showing details of materials to be supplied by department • (9) Schedule ‘B’ : Bill of Quantities • (10) Schedule ‘C’ : Detailed item wise specifications and drawings • (11) Specification : General and detailed • (12) A complete set of drawings
- 13. TYPES OF BID SYSTEM 2 Bid System • In this system, Technical and Financial Proposals are submitted separately but one before the other, rather tl simultaneous. • - A key feature of this tendering method is that submission of proposal take place in two stages. • - Also bidder can assist in defining the technical requirement and scope of work. • - Two stage tendering is used for the procurement of goods, services and construction work,
- 14. TYPES OF BID SYSTEM 2 Bid System Advantages • (1) Allows bidder to participate in defining technical specification and scope of work. • (2) Bidder is more likely to have good understanding of requirement, which reduces many risks. • (3) Technical approach and methodology can be adjusted to suit agreed technical specification and scope of work. • (4) A contract is negotiated on the basis of agreed technical specification and scope of work. Disadvantage • (1) Extended tendering time due to two stage submission. • (2) Second stage negotiation with higher rank bidder could prove difficult.
- 15. TYPES OF BID SYSTEM 3 Bid System • In this case the bidders should submit the document by following way : • Envelope 1 : Documents related to eligibility criteria • Envelope 2 : Technical bid Envelope 3 : Financial bid • The envelopes are opened in sequence, that means first, second then third. • Envelope 2 will be opened of only those bidders who meet qualification criteria. • Pre-define date of conference is arranged to discuss various offers, also to discuss merits and demerits of technical offer. • Bidder who offer most viable and technologically superior, technical solution are declared * All successful bidder at this stage now asked to modify financial bid if required. • Envelope 3 will be opened for successful bidder of stage 2. • and contract is awarded to most economical bidder.