Tendering

procedures
according to
FIDIC
\
Contents
Foreword
Acknowledgements
Introduction
Procedural Flowchart
Procedure and Notes
1.0 Project Strategy
1.1 Establishment of Procurement Mcthod
and Form of Tendering
1.2 Preparation of Programmes
2.0 Prequalificalion of Tenderers
2.1 Preparation of Prequalilication Documents
2.2 Invitation to Prequalify
2.3 Issue and Submission
of Prequalification Documents
2.4 Analysis of Prequalification Applications
2.5 Selection of Tenderers
2.6 Notification of Applicants
3.0 Obtaining Tcndcrs
3.1 Prcparation of Tcndcr Documcnts
3.2 Issue of Tender Documents
3.3 Visit to Site by Tenderers
3.4 Tenderers' Queries
3.5 Addenda to Tender Documents
3.6 Submission and Receipt of Tenders
4.0 Opening of Tenders
4. J Opening of Tenders
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5.0 Evaluation ofTendcrs
5.1 Review ofTendcrs
5.2 Tcnders containing Deviations
5.3 Adjudication ofTenders
5.4 Rejection of all Tenders
6.0 Award of Contract
6.l Issuc of Lettcr of Acceptance
6.2 Pcrformancc Sccurity
6.3 Prcparation of Contract Agrcement
6.4 Notification of Unsucccssful Tendcrers
Appendices
I Modcls for Implcmcntation of Projects
II Prcqualilication Form for Contractors
III Form ofTendcr Security
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.----. '.
Foreword
The International Federation of Consulting Engineers (FIDIC)
published the first edition of Tendering Procedure in 1982. The first
edition primarily addressed procedures which FIDIC recommended for
the selection of tenderers and the preparation and evaluation of tenders
for civil engineering contracts. The document reflected the provisions of
the then current (third edition) of the FIDIC Conditions of Contract
(International) for Works of Civil Engineering Construction.
Following the publication of the 4th edition of the Conditions of
Contract for Works of Civil Engineering Construction and the 3rd
edition of the Conditions of Contract for Electrical and Mechanical
Works in 1987, and taking into account current thinking of the major
international financing institutions (lFIs), FIDIC decided to review and
up-date the 1982 edition, reflecting current practice in the industry.
In view of the wide acceptance and acknowledged usefulness of the first
edition, it was further decided to retain, as far as possible, the basic
layout and format in ordcr that users of the document would still be
familiar with the procedures described.
Much of the up-dating work has involved modification of terminology
and procedures to make the document equally applicable in respect of
both civil works and electrical and mechanical projects. In addition, the
document more closely ref1ects the procedures recommended by the
IFIs, and draws attention to those areas where the IFI provisions are
mandatory.
The document provides a freedom and flexibility which is not found in
all similar documents. This means that the procedures described can be
adapted and used in conjunction with, for example, procedures normally
adopted by employers or procedures required by the IFIs. Users should
however be aware of the prevailing requirements and/or restrictions
introduced when using parallel procedures and ensure that all
mandatory provisions of sl\ch procedures are properly incorporated.
A useful addition to be found in this new edition is the first chapter
entitled Project Strategy, which provides guidelines and practical
suggestions on how to establish an elTcctivc and appropriate mcthod for
project procurement. This chapter is supported by a new appendix
(Appendix 1) which shows, in tabular form, the different models
commonly used for project implementation.
FIDIC believes that the new edition provides a comprehensive and
complete procedure, compatible with other recognised tendering
procedures, which will encourage and enhance the ultimate objective of
receiving responsive and compctitive tenders.
Acknowledgements
FIDIC extends special thanks to Lars Holten Petersen and Carsten
Petersen of Carl Bro Group A/S, Denmark, for acting as principal
drafters of this documellt. This contribution to FIDIC and the profession
is highly appreciated.
The draft was reviewed initially by Hans T. Kristensen of Sweden and
Tom Knoll of the UK and subsequently by the World Bank and the
International Bar Association, all of whom provided valuable
comments.
The preparation was carried out under the general direction of the FIDIC
Contracts Committee comprising K.B. (Tony) Norris. Consulting
Engineer, UK; Michael Mortimer-Hawkins of SwcdPower AB. Sweden;
and John Bowcock of Sir Alexander Gibb & Partners Lid., UK.
FlOle wishes to record its appreciation of the time and effort devoted by
all the above.
The ultimate decision on the form and content of the document rests
with FIDIC.
Introduction
This document presents a systematic approach for tendering and
awarding of contracts for international construction projects. It is
intended to assist the employer/engineer to receive sound competitive
tenders in accordance with the tender documents so that they can be
quickly and efficiently assessed. At the same time, an effort has been
made to provide the opportunity and incentive to contractors to respond
easily to invitations to tender for projects which they are qualified to
implement. It is hoped that the adoption of this procedure will minimise
tendering costs and ensure that all tenderers receive a fair and equal
opportunity to submit their olTers on a reasonable and comparable basis.
Experience has shown that for projects involving international
tendering, prequalification is desirable since it enables the
employer/engineer to establish the competence of companies
subsequently invited to tender. It is also in the interest of contractors
since, if prequalified, they will know that they are competing against a
limited number of other firms, all of whom possess the required
competence and capability.
The model procedure described in the text is accompanied by notes
which, for ease of reference, follow each clause. The notes, in italics, are
added to the text in order to expand upon the more important aspects of
each clause and, where appropriate, give alternative courses of action
that may have to be considered according to circumstances. The text is
illustrated by a flow chart which follows this introduction and serves as
a summary. Both the text and the notes have been kept as brief as
possible in order that the booklet can be easily used as a working
document.
The procedure is suitable for tendering for most international
construction works, but it may be adapted to suit the particular
requirements occasioned by the size and complexity of a project, and
any special conditions imposed by the established procedures of the
employer or the financing institutions. It reflects good current practice.
FIDIC recommends its use by employers, engineers, contractors and
others involved in the international construction industry.
The procedure is related to FIDIC's "Conditions of Contract for Works
of Civil Engineering Construction" and "Conditions of Contract for
Electrical and Mechanical Works" but can be readily adapted to any
acceptable contract form.
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Procedure and Notes
1.0 PROJECT STRATEGY
1.1 Establishment of Procurement Method and
Form of Tendering
In the context of this document the word "project" covers all the stages
from the initial idea to construct a given physical asset to the final
taking-over by the employer of the completed work.
Projects may be organized and implemented in accordance with
different strategies. A brief description of some of these is given in
Appendix L Which strategy is best suited for the purpose depends on,
for example, the nature and complexity of the project, the access to
finance. life cycle costs of the project, the technical and administrative
capability of the employer and the general political and economic
environmenl.
The project strategy defines the way in which the project will be
implemented, determines the role of each party involved and, where
appropriate. specifics the way the project will operate. To a large degree
contractual relationships between the parties and their individual rights.
duties and risks arc therehy also determined by the project strategy.
At the implementation stage of a project, len<.kring serves as a method
to ensure that the work is procured al competitive terms.
The choice of strategy is a major decision which has far-reaching
consequences. Once a strategy has been settled it is of great importance
that it be followed throughout the implementation of the project. Lack of
strict adherenct!" to the strategy may lead to flaws in the procurement
process, resulting in claims, disputes and extra costs for all concerned.
Any part of a project which can be covered by a separate contract may
in principle he made subject to tendering.
As soon as the project strategy has been decided, the employer, assisted
by his engineer, should establish procurement methods and forms of
tendering to be used in the project.
The procurement method and forms of tendering are established by
delennining.
i) The parts of the project for which tenders are to be sought.
It is importanT t/tat the scope of a particular contract is clearly
defined and t/tat intelfaces wirlz other parrs of rhe project are
accollnredflU:
'.
A COlllract may comprise design, delil'ery of plallt and machillery.
COIISII"Il("lioll 01" a ("olllhi'WliO/f of Ihes".
ii) The conditions of COlllract to be adoptcd.
Only widely rccogui;:'l'{1 slandard condilions of co",ract which
specijically cover Ihe works alld services 10 be rendered hy Ihe
COlllraCIOI", slum!d be used.
iii) Thc award critcria.
The award crill'ria should cover all elemems 011 which the employer
wishes the I('"derers to compete.
The factors other than price to be Itsed in the award crileria shollid
to the extellt practicable he expressed ill monetary terms.
The award criteria may include costs, quuJitylpel!ormullce, time,
ingellllity ami em'irolllllental effecls, and it may he necessary 10
apply to c(I("h criterio/l 10 reach a hasis which will h('
IIsed whel/ el'ulualillg the fellders.
iv) The tcndcring procedure.
This docllment co"'ains what FIDIC regards as a fair alld
systematic al'proa('11 for ohtaining alld el'{lIuatillg ll'ndcrs. The
')(Isic procedurc descrihcd i1/ Ihis dOn{f11('1l1 CUll be used for
le"dering/or all typcs COIl11"{lctS ill connectioll with i11lerllariollal
and domeslic rOllslrllcliOll projects.
v) The critcria which shall be lIsed to prequalify tendcrers.
11/ principle. pn:qllalljicaricm should always he carried Oil! 10 ensure
I!wf only IlIo.w' who (/1"(' qualified 10 /Imh'rlakc Ille work i,ll'c'st
illllle preparalion ofa tCl/def:
Once these basic prccondilions have been determined and agrecd
between the employcr alld his engineer, the planning of when and how
the tendering can be carricd oul mny commence.
If, for unforeseen reasons. chnngcs in principle and form have 10 be
made at a latcr stage in thc project the implications of such changes have
to be considered and assessed carefully.
Fillal/cing iflstiwtio1/s may require to approve the project SlrCllegy.
1.2
,
Preparation of Programmes
The tendering procedure. as described in this document, implies that
certain activities have 10 be carried oul in connection with each part of
the project for which a separate tender is to be called.
It is important Ihat these activities are carried oul in a systematic and
timely manner. They should therefore be planned carefully and
incorporated in the programme for the project.
Normally, a preliminary overall programme covering all major activities
of the project is prepared in the illilial siage of the project. As a
minimum. such programme should comprise the main phases of the
project. that is:
project definition
I ~ n d e r i n g procedure
- design
- construction
- taking-over
and should eSlablish all milestones of significance In connection wilh
each phase.
Calling tenders ror a given part of the project should be carried out in
compliance with the overall programme.
In order to ensure this compliance, derailed programmes should be made
for implemelliing the tendering procedure for each part of the project.
As a minimum. these programmes should specify duration and
deadlines for the following l.\clivities in connection wilh each potential
contract.
- Prcp<lnllion or lender documenls
- Prcparalion of prequalilication documents
- Prcqualific:ltion of tenderers
- Oblnining tenders
- Opening of lenders
- Evaluation of tenders
- Award of contract
Time should be allowed in each programme for the employer to make
necessaI'y decisions and give required approvals.
Further information about content and scope of each of these activities
is given in the following sections of Ihis document.
\Vhen prcparing the prograllU1l1' for each (;ontraet. it is important to
C'usurc /IUlt thc _\'C'l/ucnC{' ofoctil'ities is s/lch tllat alll1eCl'ssary data lind
illfOl"lllotioll ar{' C/l-oi/ah/e whell {'C/cll (lC'/iI-it)' i.\ to In' carried out_ This
applil's ill particular to till' order in which the activities forming
"Preparation of tellder do{'uments" aud "Preparation of
preqllalUicotioll dOCUnI{'l1tS" are carried Ol/t. Consideratiol1 sIIould he
,
"
,
.':;\'l'11 as to what e,x!('w the lellder dOClInlelll.<; shollid be prepared alld agreed.
before the p,-('qualificalirJl/ doC/mu'nls call he fllla/iud alld isslled. This I/(J.t; 10 he
(/t'cickd jor (,tlch ;1II('I/(/(od cunlraCl. :tiilln' J.(.y i"jormatioll /rom ,11(' I('mh-,.
docllmems will 0/1('" hu\'{' 10 be ,ncO/porated ill the prequalificorioll doc-limcIII... ;1/
order 10 give adeq/lUll' i"formOlioll to 'hose see/.;;Il.S: prequalificotioll.
FillOI/C;lIg ;lIst;lu1iol/s H'ill gellerally require lime for scrutiny aud (11'/11'0\'01 of
tef/der documents.

,
2.0
2.1
2.1.1
2.1.2
PREQUALIFICATION OF TENDERERS
Preparation of Prequalification Documents
General
Prcquillific.:4Ilion is rccommen<Jcd to ensure lh:-al lenders sought only
from contr:.lctors whom the employer/engineer has alre<.ldy cstahli ... hed
as h<lving the requisite resources and experience to perform the intended
work
The aim of prequalillciltion is 10 establish a list of capilble firms whilst
ensuring Ihal a proper level of competition is safeguarded. To achieve
these ohjcctives and to give :tdded encouragemenl for COniraclOrs to
respond to invitations to Icnder, more Ihan seven organisaElens
should be p'requalitied unless_.the rules of the employer or financing
instilUtion otherwise
It is fhe !,o/icy (}f SOniC jil/ll1U"ill.r: ills/illl/iol/s '"ar all ap/dicallls .....ho
po.t!ie,u ,lie' cIIICllificllIion.'i to "{"I/orm ,hl' "ropo.w'd cOlltroct sIIo"ld
pUtlUllliju-d,
p,.equalification Documents
Prequ;'llific3tion documents should give information about project,
the tendering procedure and the prequalification procedure. TIley should
also specify what dala is required from conlractors wishing 10
prequOJlify.
The documents ;lrc prcp;.lI"cd by Ihe cmployer/engineer and will
normally include the following:
Leiter of invitalion to prcqualify
Infonnalion about the prequ:llilic:lliOIl procedufC .... V'
Project informal ion
Prcqualilic:lti<m :'lpplic:'ltioll ,
The prequalific{ltio" proceclurc should:
Be based on questionnaires. A stam/ard questionnaire ....il/ ht'lp tv
maintain conformity of informatio1l .'wlI,c:la. thu:'i making tht'
respollses quie'ker ami to prm-ide, and at the same lime
making t!l"m more readily comparahle.
Be rdatil-ely simple ami yel flexiblt' :'in as In permit com:itleJ'ation nf
new m:c:oJli.'iotirms.
Take CUTOllllt of hoth Ihe t{'clmical alld the fil1onc:ial aspects of
.\' .
Allow j(),. the updaring of information prC"iously IU'Ol'it!ed hy
co/urGe-tors 10 the Sail/(' ('mp/oyer for a" earli(',. projec,. thus
al-oil/illg 1II111t'("('s.\,ary dl/pliclItion ofeffort.
Aut/lOri:t' tilt' cmp/o)'rrlel1gil1l'C!" to .H'eJ.: SU/'pll.'mc"taJ'Y iI/formation
from 011/('" .tOfwres.
,
II/ order to l'/1XW'(' orderly (lut! ('usily "pprui.\ct! r('.'iluJII.W!."i.the """,/(/"nl
pr('quulificutio/1 ftwm r(,ft'rret! to iI/ Appe"dix /I may h(' " ....ed.
The documents should includc inter alia lhe following:
Namc and address of the employer.
Name and address of the enginecr.
Location of the projcl.:l.
Description of the projcl.:t :tnd !'l,;OPC of work included in lhc
l.:on(r:.l..::I.
Anticipatcd programlllc, indicating the lender period. contnici
<lward dlJlc. cJesign/conslruction/commissioning periods and any
other relev.tlll kcy dales.
".' Conditions of COlllrm:t 10 be used.
Cdtcria fur evaluatioll ur IClldcrs.
Criteria for prcqu:.tlilication.
[Xtails uf allY work. intcmJCli to be undl:rtaken by nominulcd

Anticipated sources of limmcc (including any requiremenl for
contractor limllH.:ing).
Paymcnt arr.lIIgcmcnls cnvisagcd (including currencies).
Any lin;lnd:.tl gU.lranlecs to be givcn by conlmctor.
Whethcr price eSl,;.t1.ltion arrangements will be included.
L::lIlgllage and law ur the COIl(f<U':t.
Any aspeel of the illlcnt.lct.l work which is unusual and would thus
have a be.lring on the contractor's obligations.
Charges for purchase of tender documents. if applicable.
Applicams shoultJ also be advi:-.ed of:
The pulicy of tllc elnpluyer com.;crnillg uOlllcstic preference.
The .lltitude of the employer 10 joinl ycntures. It is recommended
lh... t joint VCnlurc!:' should be allowed to prequalify but Ihat the
subsequcnt formal ion of joint velliurcs from amongst pre4uaJilled
organis3tiol1!'i should be controlled as this reduces the breadth of
competition. A prcqualilied organisation should be allowed to
strengthen its Glp:thility by lhe subsequent incorporation. during the
tender period. of llon-pre<'lualilieJ fiml(s). subject to the approval of
the cmployer.
The number of of prequalilieation applications to be
sUbmitted.
The name. :lddrcss ::mu latest date for receipt of submissions,
including :my particular instruclions for labelling.
The language to he lIsed for the submission.
Thc currency 10 be used for presenting linancial information.
2.2 Invitation to Prequalify
The employer/engineer should publish a notice invlllOg interested
conlraCtors 10 :Ipply for prequ<llificCllinll documents, stating that tcnder
documents will be issued only 10 LI limited number of companies/joint
ventures SCkC1Cd hy the employer/engineer as having the ncces$ury
qualifications 10 perform the work satisfactorily.
The notice should be published in approprialt newspapers and journals
to give sufficient publicity according 10 the particular circumstances of
the project. The nOlice may .. Iso be issued to financing instilution
reprc.-.enlativcs. if n::lcvanl. nnd 10 government agencies responsible for
foreign ITadc so Ihal the inlcrmllional community receives limely
nOlilic:.tlinn of the proposed project .md inslruclions on how to i.lpply,
The notice should be reasonahly brief and where feasible cOnli.lin:
Name of the employer,
N<.lInc of the engineer.
Localion of the project.
t' . ... . Descriptioll of the projeci ;lnc! scope of work,
'.
Source of IinUIH.;e.
AnTicipi.lled programme (i.e. awt\rd of contract. completion and any
other key
PhlllllCd l!;llcs (ur issue of tcnder documcl1ls :'lOd suhmis.sion of
lenders.
Inslruclions (or applying for prcqualificalion documents.
Dale hy whit:h applicalions 10 prequ3lify must be submined.
Minimum L\u,llificalion f"C4uircments and i.lny p::U1iculitr i.lSpeCIS
which could be of concern 10 prosrx:ctivc lendercrs.
The I)('riot! "elll'('('11 f//(' notice of illl';((I/;O/l ffJ pn'quullfy (/1/(/ fl/l! laf('sf
(/af(' for ,II(' r('fl/rn of ('Ofllp/('rcd applicafioll."i should nor he 1(',\'5 tllalt
fo"r weeks.
For most pl"ojecf,\'. tIll' "m;c(' of illv;tatiOTl should fx published hetween
tel1 to fifteell .....eeks h('!ore tile planned /ate for tile issue of tender
documents (Iml ('ompleled prequalijrcoTioll applicaTion... should he
Slthmil1ell to The to ei,t::ht before {lEOf date.
2.3 Issue and Submission of
Prequalification Documents
On rcceipt of requcsts fmm contr3clors, the employer/engineer :-;hould
issue the prcqualilk:ation document... ,
.... The leHer of invitation 10 prcqualify should stale how the application is
10 be am.! sent.
The employer/cngineer should acknowledge receipT of the completed
prcqualilication applil.::.uions from lhc contri.lCIOrs.
2.4
2.5
'.
2.6
It is "/Is/omary (0 issue IClIder donlnlf.."rs fr('c of If if is
illll!lUJ('d 10 dUI1"!:c. detuils should he Riven in file I'requalificafiolf
(/OCIlIlJt'U'....
Analysis of Prequalification Applications
1"C c:mployer/cilginccr should evaluate the prequalilication applic'l\ions
to iocntify those companies/joint ventures whom Ihey consider to be
suitably qualilicd <1nu experienced to undertake the project.
The evaluations should uClcnninc. for each comp.my or joint venlure:
Structure and organisation.
Experience in bolh the type of work and the country or region in
which it is to be unucl1akcn.
Available resources, in tenus or management capability. technical
staff. (;onsu'ucliuJl <.IUO fabrication facilities, maintenance and
training filcilities, or other relevant factors.
Qualily assurance procedures ami environmental pulicy.
c.lI.tr.:nt tu whidl .my work woulcJ be likely to be subcontracted.
stahility 'IncJ rCSOlln:cs nccessary 10 exccute lhe project.
Gcncwl sllit.lbility, taking into .u:count ,.Illy putl;llIi.a1 h.lllguagc
diOiculties.
Litigation or .lrbitr..ttion history.
El'ullfUfitIJl allh' suitahility o!IWI('l/Iiql ('Ol/lra("/ol',\' -"hould I)(, made on
II/(, ha...i... of Ilu' 1'I'C'lff/alijir'l// ;f/1/ Tlli... may h(' ..."pplenlcl/lel!
11)' prel'iolf,\' c'.\per;C'II("(' of fill' l'lJfploy<""/Cl/giIlC'('I' alld IJ)' nmjidC'1/fiul
made ro pl"(,\'ious l'mployc'l's. (rode and
direl:loril's OJ' !IoriO/wi compallY /"l'.l.Ii.\"f('I"s, Where appropriate and
fl'usilJle.'ai,\'fU.\'sio"... ma), he Iidd ..... itll app!icuJlfs.
Selection of Tenderers
If resulting lis!. afler those linns wll(l were found unsuitable have
heen excluded. six pUICllli,,1 tcndercrs and there arc no special
regul;ttions OJ' conditions imposed 011 Ihc cmploycl', thc sclection
proceuure SllOUld be conlinueu 10 eliminate the less well-qualified in
order to alTive at Ihan si.ll..
Notification of Applicants
When the li!'>t of sclcctcu tcm.lcrers has hecn prcp'lfCu, ..cssful
:Ipplicants should he nOli lieu 'Illd requestcd 10 conlirm Iheir iotention to
submil a tender. This should Cllsure, as far as possible, :.111 adequate
number of competitive tenders. If a polemial tenderer wishes to drop out
al (his stage, the next best-placed should be invited and asked 10 confirm
as above. Following this, all applicants should be notified of Ihe list of
selected tendcrers without giving explanation for the decisions.
Ir shoul,1 be l10redthat ..;onu fi"Ul1c;nt-: or other institutiotls require rhot
all contractor... po..;sessing the experience and resources
should he- prequalified ...... ithout OilY restrictiOIl on the lotal numher.
The employer/engineer sllould olb'is' .\'ucce.ufu! applicants when fhey
('an expect ro rece;l'e lelltler document.... alld should notify unsuccessful
applicants Illar they have lIof heen prequalified.
3.0
3.1
3.1.1
3.1.2
OBTAINING TENDERS
Preparation of Tender Documents
General
The lender dOl.:UlllCIlIS prepared by the employer/engineer will nonmilly
include the following:
Letter of invitation 10 lender.
Instructions 1O lcnderers.
Tender form ;lOd appendices.
Conditions of l:onlracl (ParIs 1 anu II) lOgether with any requisite
forms.
Spcdlkalioll.
Drawings.
Bill of quantities or schedule of prices.
Information dul".
List of additional infonnalion required from tendcrcrs.
The Sl.:UpC of the contract and:'1Il Olltline of the lender documents should
be prepared bcfurc the prcqualilication documents in on..lcr to achieve
consistency between these two sets of documents.
Some uf the above items, such as "Lcucr uf invitation to lender" and
"Instructions 10 Icndcrcrs" will normally not form part of the contract
agreement (sec clmptcr 6.2) :md l.:unsequcntly requirements ,lOd
conditions applying tu mailers arising after :'lward of contracl must be
incorporated el!;ewhere in the tender documents.
Essential features of the tender documents are described below.
Letter of Invitation ,to Tender
The !cUer or illVit:.lliOll to lender should be on employer's hC:.ldcd paper
and should include:
Tender reference and litle.
Li:-.t of documents issued.
Receipt form for the tender documents (10 be signed and returned by
the tcndcrers)
Instruction 10 infonn the employer/engineer, in writing. of Clny
significant l.:hunges to the data supplied in the prequalific<l1ion
appl ication.
Dale and plal.:c or lendcr submission and Icnder opening.
The (e1f('r of im-llarion should IJe kepT as shon as pos,rihle. Detai!rd
illformaTion shuuld he cUllfained in The illstru(tions to tenderers.
3.1.3 Instructions to Tenderers
General
Instructions (0 I,cndcrcrs should be prepared by IhecmpJoycr/engincer 10
meet the pal1icuktr requirements of individual contracts. The purpose of
the document is (0 convey information and instructions that will govern
the prepi.lralion, submission and evaluation of tcnders.
When determining the tender period. the employer/engineer must
ensure Ill'll ,adequ;'ITc lime is available for tenderer!> to prepare their
tenders taking into nccount the size. complexity :l.nd location of the
project in question.
Tcmlcrcrs should he notified of the number of copies of their Icnder that
arc required. slipulming that one set of the dOcumeoti<; should be clearly
marked "Original Tender" .md the others (which should be pho\o-
copies) marked "Copy" and that, in the event of discrepancy. Ihe
"Origin;:11 Tendcr" shall t<.lke precedence.
lf a power of ollorncy is required. details of the precise requirements
be given.
The tcndcrers' nuention should be dmwn 10 any requirement for
documents to be notarised nod legalised at the embassy or consulnle of
the employer's country.
Tenderers should he informed whelher the successful tenderer will he
required to esl;:lbJish a locally registered company for the purpose of the
cOlltr;:ICI.
The inslructions 10 lemlcrers should stollC that the employer does not
hind himself 10 ;:lw<.lrd a conlract to any of the lenclercTS.
If remunenuion is 10 be made (0 tencJerers who submit responsive
lendc:rs. the sum should he advised. If 110(, it !'ihould he stipulated (hnt ,Ill
costs ;:lOd cxpen!'iCs with thc preparation <:Ind submission of
tenders shall be: borne by the tcnderers.
Consideralion ,\hould he 10 offering some remuneration 10
tcmh'rers !l Ihey. ill order 10 prrl1'ide a responsive fender. hal"e 10
Itllelena!.:e sfUlfirs or carry oul design work ofa conceprual nature. This
will normally he Ilu: ("ase ill 'De.dgn, Build, Operate alld Tran.ifcr"
prnjeCI!. or "Design. Build and Operole" projrcl.... sec Appendix I.
Documents
The inslnlctions 10 lendcrers should conwin a list of the documents
required 10 form a complctc lender.
Tendercni should be infolmcd lhal a tender will be rejected unless it is
substanlially re.'iponsivc.
H should be made clear to tendel"crs that any corrections must be
initialled. Data presented by tenderers in the form of computer print-
outs. where Llppropriale. should be accepted.
Alternative Tenders
should be informcd of whelher allernalive tenders will be
considered or no1. A complialll tender is nOffilully a precondition for
considering altcrlli.ltivc tendcrs.
AllenWf;,'e fellder.\" must include a cOlllprellensi\'c and precise
descriplion of f{,e parIs of Ille lender documellfs wllich have been
alfercel. The (llf('I"I1OI;\'(..' Icnder sllould includefull llelaUs ofc:o"frucftwl
nUlllilions. xpecificulirm, drawing,,,, calculafions. elwironnU!llfal
impacls and ('mits Ior file parIs of Ihe works f!lal !la\'c been in
order fo aI/oil' afair f"cllnical ulul f1llulI(';al evol"Ulioll of file alfrrIlUft"l'c
proposal.
Modification to Tenders
Th;: lcndel"Cr should hc illl'onncd lhal. if he has delivered. po!'tcd or
tlispi.ltched his tCllUCI" prior to the submission daLe he has the righl
to modify or tlwke (.;OITCCl.ioIlS lU il, provided thal any such
or corrections are rece.ived by the employer/engineer in
writing prior to the time speciried for submission of tenders. The
original tcnuer thus modified or corrected would then be considered as
the lender.
Financing Arrangements
Tendercrs should be l.IUvi:--cd of source of fimmce and
contliti<.UlS.
Where LenderCl"S requircd lO provide linancing Ihey should be
inslru.:lcd to provide information l.IS to soun.;c of liuance and Ihe
(.;olldiliuns whkh will l.tpply.
Currencies and Payments
Specific should be given conccming Lhe currencies LO be
used in the prcparmion urthe Il:-Ilder. Tenuerers also be advised in
which cUITcncylcurrcncics pl..lyments will be effecled.
Wh<'l'e Jel1derers arC' reljuired fo l'xpre.'is I!leir 1('lIders ;11 a single
("1I/"1"el1("y (usuully fll{" ("urrency of f!le (;(Juntry ill wlth:!I lite works art' 10
he ("(Irried OIlT), if is III!('c:>sary 10 dlpue fhe rales of exchangt. w!ric!r
hal't! IJee" /lsed In ("ol1\'l'rT T/'e I'arions CltrrellCie,'I in w!rich paymenT is
rl'ljuired il1fo a sil1gll' ('U,.rel1cy uuif" As Inore fllln ("Jlle Tenderer nwy
r"qllesl parI paymellT in (Ule pOl'f;ntlar t."lIl'r'lI(,y. il ix thaT
file exchange raf"s 10 b(' used should hl' ('ollsisfl'UI and. thereforl', that
fhl')" should he dl'fiU('c/ by thl' amI 1l00ified /(I ('at'h
t{"lIdern a rcasonahle time hefore The dale of submissioll. Normally,
thl'"tc rates ... hould bl' lilt> si!lIinR prit-es quolell hy Ihi! local l:l"nTral
balll.: alit! tile rllrs ...!lo"hl he' 1110.'",' quolcd al Ihe lime of ('Iosill): 28
days hl1fIl"C Ill" Tcnder ..."h"';.'Isioll (lel/ll. Tlu! rOIC," qllotl'll are
ill('orporuTl'c/ ill Ihe 'OI11ra("f ,,JIl'U ult'arc.!ld.
Domestic Preferences
Tendercrs should he advised if and how domestic preferences will be
applied in the evaluation of tenders.
Tender Securities
The requirements for a tender security, if :lOY. will be detennined by the
circumstances of each project. Jf a tender security is required, a form
should be included in the tender documents. A standard form of tender
security is shown in Appendix III. The amOllnt and cUlTency(ies) of the
security should be stated. In all cases the surety or sureties must be
sarisf'lctory to the employer. If a tender security has been requested, any
tender which not been so secured will he rejected.
Tenderers should be advised of the period of validity which is required
for the tender security. ;\Od the events which will entitle the employer to
call the security. The terms reflected in the standard Fonn of Tender
Security shown in Appendix III are as follows::
a. th;u it shall remain in full force and effecl until the earliest of
,
i. {datet being r J days from rsubmission dateJ. the date
stipulated by the Authority for the suomission of tenders. or any
prolong.uion of such date above notified to the Authority by the
Tenderer and the SurelY in wriling;
iL in the event of acceptanClt of the Tender by lhe AUlhority. the
date upon which the Tenderer provides a performance security to
the Authority in with the terms of the contr.tct thereby
made between them. or
iii. in the event of acceptance by the AUlhority of a tender for Ihe
Works from a third party. the date upon which such third party
provides the relevanl performance security.
b. subjec\ to this Bond being in full force ;md effect, fhe Surety shall
pay the rull amount specified in this Bond upon receipt of 3 wrinen
certilic.i1te from the Authority Slating fhat
i. lhe Tenderer has wilhdrawn his Tender during the validity of
this Bond. or
ii. the Tenderer has failed 10 provide a perform;mce security to lhe
Authority in accordance with lhe terms of the conlracl between
them upon accep{;lnce of the Tender.
It is recommended fhat the period of validity of the security (Bond) shall
equal the period of validily of fhe tender plus the time allowed for the
tenderer 10 provide his performance security under the terms of the
eventual COnlract between the cOnlractor and the employer. Teoderers
should be advised that their lender securities will be returned to them as
soon as the security is no longer in full force and effect as covered in
sub-pamgr;lph (;l) aoovc.
The eml,foyerlelJgiuecr should select ,he fyl'{' (JIul amount of security
}I/OS/ appropriate to till' rOl1tl'(f("t to In: awarded. It is I'nj"erahle t/tat t!Je
(I/I/alt/It of s('tttr;!y s1l01l/d 1)(' s/oln/ a.\ a -'"Iu()fi(" .\fUJI I"ather tlu/II 0.\ 0
/h'n'CII!age of tllf' 1('lIde'/" prin'.
Evaluation Criteria
The evalualion criteria. which will form the basis for the selection of the
advantageous ICIH.lcr. should be speeilicd.
If a spcdlk mcthod of evaluation is 10 be used in selecling the
successful lender. the method should be described in the in:-;lructions to
Icnucrcrs.
While gencrally will be primarily on the basis of tt:nder
price. other fa...:lors which lIlay he relevant include:
lillIe for COlllplclilm
of technology
life cycle costs of construction ;'Illd plant
cllvirOlllllel1lal imp'll'l during tile lilClilllc of tile project
avoid:mce of haz..trdoliS materials
4uali1y tlnd serviceability orplallt
pwjCCI linallcing
operation and maintelli.lnce costs
TI,e.H' Jilctor.\" shuJl h(', !o rhe eXfent proui('(.IbJe, ('.\pressed ill f1IO//('f<Jl)'
!erms or gil'clI (/ ill Ihe el'allla/;,,1/ prol'''.\ioll of tile tender
dO('/fJlIl'J1!S.
Performance Securities
If security (gllar;\I11ec or hond) for pcrf"orilwllCC is rCtluired. the Iype
mllJ h.:nns should be spccilkd in the conditions or contract. The terms
should indlilic the periotl of validity of the sCl:urity, the procedure 10 he
followcd if lhe security is forfeit. arrangements for its release iJlHJ. the
currency of .:lny 1110netary tmnsaclit}11S illVolvcll.
Checklist
The following checklist is illclullcu to assist in the prcptlration of
instructions to tenderers and shows subjects which should be covered:
The bngllagc or the tCllder.
The number of copie::;: of the tender that arc required.
Which dm:umenls have to be filled ill hy the lenderer und returned hy
the submission d ..lte anL! which Il<\VC to be signed.
The rcquirelllcnt for c;lch lcndcrci' to provide a power or allOrney f()r
the signaturc(s) 10 the lender.
3.1.4
Any special rules regarding. trcmml.:nl of taxes, and other
fiscal mattcrs in thc lcmler.
Validity jX'riod of the lcnder.
Any documcnls othcr than those issued as parI of the tender
documents which the lendcrer must include with his lender (e.g.
technic:.!l or drawings, proposed mclhods of
constnu.;tion, environmental protection measurements,
prngr:lInme, schedule of key quality control).
Procedure for issuing addenda to the lender documents.
Procedure for with queries raised by tenderers.
Instrm;lions for packing. I<lbelling nod addressing the tender
(including a supply of standard labels if this is practice of the
employer).
Pnx:cdllre 10 he adopted for tenderers tn inspect lhc sile of the
works.
Procedure for inspecting any sped;,l documenls not issued with the
lender (\oCtlmelUS (e.g. site invesligation repons).
Circumslances under which altemative offers may be submilled.
Conlidellti.llity of tendcr documents.
Pmcedure for (he return of tender dOClllncnts hy unsuccessful
lenderers (if requircd).
Procedure for dealing with requests for extension of by
Icnderers.
Armngclllcllts for thc opening of tenders.
PrOl;edurc for deating with :lTithmctic errors found in lenders dllTing
evaluatioll.
Rules rclaling to disqualification/rejeclion of tenders (e.g. !<.lte
arrivals...!tercd ligures, incomplelc submission.,; and devialions)..
Any unusual ("cillures of the particular lendering process.
Infonnation about the cvalualion criteria
Conditions of Contract
The conditions of should be based on widely rccognised
conditions of contract such as "Conditions of Contraci for Works of
Civil Engineering Construction" and "Conditions of ContraCI for
Electric'll and Mech.mical Works" puhlished by FIDIC.
doci/mell/s ("olllp,.i.\':
Part I: General Conditions (alld Preamh!e, ilapplicllble).
Par, II.. Conditiolls oI Particular Ilpplication or Special Condiri(Jns.
TClId",' /orlll.
Ilgrc'('I//"1I/ Jill"lll
3.1.4
Any spccL.t1 rules regarding treatment or taxes, duties and other
llscal matters in (he tcnder.
Validity period of the tender. ,
Any doeumenls other than those issued as part of the tender
documents which the tenderer must include with his tender (e.g.
technical description or drawings, proposed methods of
construction, proposed environmental protection measurements.
proposed programme, schedule of key staff, quality control).
Procedure for issuing addenda to the tender documents.
Procedure for dealing with queries raised by tenderers.
Instructions for packing. labelling and addressing the tender
(including a supply of standard labels jf this is the practice of the
employer).
Procedure to he adopted for lcndcrcrs to inspect the site of the
works.
,
Proccdurc for inspecting any special documents not issued with lhe
tcnder documcnts (e.g. site invcstigation rcports).
Circumstances under which alternative offers may be submitted.
Confidentiality of Icnder documents.
Proccdure for the return of tender documents by unsuccessful
tenderers (if required).
Procedure for dealing with requests for extension of time by
tenderers.
for the opening of lenders.
Procedure for dealing with arithmetic errors found in tenders during
evaluation.
Rules relilting 10 disqualification/rejection of tenders (e.g. laiC
arrivals. altered figures. incomplete submissions .md deviations)..
Any unusual features of the panicular tendering process.
Information about the evalualion criteria
Conditions of Contract
The condilions of contract should be based on widely recognised
conditions of contract such as "Conditions of Contract for Works of
Civil Engineering Construction" and "Conditions of Contract for
Electrical and Mechanical Works" published by FIDIC.
These documents comprise:
ParI I: General Condilions (and Preamhle. ifapplicahle).
Par/II: Condilions of Particular Application or Special Conditions.
Tel/del" form.
Agl"CClIll'lIl form
3.1.5
3.1.6
3.1.7
Ifolle of the above mentioned conditions is specified. guidance in its use
is !:iven in one of the followiJlg two publications "Guide to the use of
FIDIC Condilions of Contract for Works of Civil Engineering
COllstruction" Gnd "Guide to the use of FIDIC ConditioJlS of COlllrac(
for Electrical and Mechanical Works"
It should be lIored "1U1 fhe conditions have been prepared 10 provide a
jair shari"g of respollsibility and risk between employer and contractor
and contain many interdependent clauses. They should therefore he
adopted with aslew ol/eraliolls as possible.
Specification
The specification will define the scope and technical requirements of the
contract, including any requirements for training and the transfer of
technology. The quality of materials and the standards of workmanship
[0 be provided by the contractor must be clearly described. together with
requirements for quality assurance to be performed by the contractor
and the required safety, health and environmental measures to be
observed during the execution of the works. The extent, if any. to which
the contractor will be responsible for the design of the permanent works
should also be specified. Details should be included of samples to be
provided and tests to be carried out by the contractor during the course
of the contract. Any limitations on the contractor's freedom of choice in
the order. timing or methods of executing the work or sections of the
works should be clearly set ou( and any restrictions in his use of the site
of the works, such as interface requirements with other parts of the
work. or provision of access or space for other contractors, should be
given.
The specification shall promote the broadest possible competition and as
far as possible follow international standards such as those issued by
ISO.
Drawings
The drawings included in the tender documents should provide
tenderers with suflicient detail to enable them, in conjunction with the
specification and the bill of quantities. to make an accurate assessment
of the nature and scope of the works included in the contract. The
drawings should be listed in the specification.
Bill of Quantities/Schedule of Prices
The bill of quantities/schedule of prices should provide identifying
descriptions and estimated quantities of work comprised in the
execution of the works.
If the tenders arc based on lump sums, a break-down of such sums into
constituent parts should be provided by the tenderer.
3.2 Issue of Tender Documents
Tender documents should be issued by the employer/engineer to those
fimlS who have been selected to lender.
If a charge for donmu!ll1s ;s to be raised, issue should only be made
agai"sl payment.
As 011 allernative to posti",':, or despatching by olher means, tenderers
should always he given 'he option of c:oflc<.;ti"J.: lender doc:unu!Ill.f from
the employer/el/gineer Oil rhe due despatch dale. Tenderers should IJ(!
asked whelher they wish (0 col/eu lhe documents and instructed us to
the rime (lnd place jor (.'ollecriol1.
,
3.3 Visit to Site by Tenderers
Visits 10 the site of the works should be arr.l.Oged with the
employer/engineer as laid down in the instructions 10 (enderers.
The primary purpose of the visit is to enable each tenderer to inspect the
site and obtain all relevant information required for the prepamtion of
his tender.
Tel1llcr,',.s .\-hould be ucll'ised of fhe pmooble duratioll of the visit, the
period durillg which the visit may be made alld the maximum number of
pcrsrJ/lS from each tendera allowed to participate.
The ar1"QIl.t:cm,'IItS for the site visit . ~ h o l i i d be determined so that equal
opportunities are ope" to all fenderers_ The visit shollid take pla,-e at
approximately 'he end of the first half of the ,ender period and should
i"c1ude a fe"derers' conferel/ce.
Tel1llerers should make flteir OWIl t1"Ql'{!llin1: al'l'lIlIgemellts alld hear tlte
costs, il/duding fares. ll('('ommotlmiOil and sllbs;slCllce al1(l tlley .\lto//ld
h,' advis{'d of this ill tile illsfrtl(',iOll.f to tcnderer....
It is tile respol/sibility of tlte employer/engincer to make Dilly tllose
arrangements f/{!ce.uary for the actllal inspection of the site_
Tile employerh'l1gille('r should make a record of tenderers'
represematit"s \li.\-itil1':: the site_
The employer/{'lIginee,- may ,-equi/"(' te"del"l!rs v'Sl1l11g tile site 10
'-',demnijy the employer/engineer against ony claims for damoge, injury
or death as a res"lt of tile visit.
3.4 Tenderers' Queries
Tenderers' queries can be handled by correspondence or by tcnderers'
conference or by a combination of these methods.
The intended method or methods should be described in the instructions
to Icndercrs.
Correspondence Method
Any tenderer requiring clarification of the tender documents should
submit his queries 10 the employer/engineer in writing.
The employer/engineer should prepare and despalch wrillen replies to
queries. These replies, together with the tex( of the queries should be
issued to all tcnderers without quoting the source of the queries, and the
tenderers should be required to acknowledge receipt of the information.
Tenderers should be instructed that queries will not be accepted by the
employer/engineer unless received 2R days before the date for
submission of tcnders.
Replies to queries should. where appropriale, be issued as addenda 10
thc Icndcr documents.
Tenderers' Conference Method.
With the conference melhod, queries from Ihe tenderers 10 the
employer/engineer are deal! with al a tenderers' conference arranged by
lhe employer/engineer 1o take place al the lime of thc sile visit.
Temlerers' queries should be in writing and should identify the party
raising the query.
As far us possible oral answers should be given by the
employer/engineer during the conference.
Within a reasonable time after the confcrence, the employer/engineer
should send alliendercrs, whcther present at the conference or nOl, a full
sel of minutcs recording both the queries and formal replies. Where
appropriale, an addendum to lhe lender document should be issued.
Receipt of lhe minutcs should be acknowledged by lhe lenderers.
Representation fmm each tenderer should be limited to two or three
per.'WlI.f at 'lie conference.
3.5 Addenda to Tender Documents
Each addendum should, when issued, carry a serial number for
reference purposes and conlain a receipt slip which should be signed by
the tcndcrers and relurned immediately to the employer/engineer.
Addenda should be complete in themselves and should not rely on
I c n t l e r c r ~ having to appreciate the implications and decide whether other
changes to the documents are required as a consequence.
Addenda become part of the tender documents.
It is possible that explwwtions, re\'isions. addiJiolls or delerions to the
tellder documellls may be necessary during the tender period and these
shol/ld be I/Olified ill accordance with the procedure shown above,
The employer/ellgineer should avoid. if possible. rhe issue of addenda
during the latter part of the tender period. If unavoidable, the
employer/engineer should consider extend;'l!? the tender period to allow
tenderers a reasOfwhle time for their incorporation. It should also he
remembered that changes of a mil/or nature can usually he dealt with ill
discussions with the selecred tenderer prior to award.
The lender period should 1101 he eXlcnded ullless the circumstances are
exceplimwl. III considering the need for extellsions which might arise.
eilher as the result of major amendmCIllS 10 Ihe render doeumems or as
a dire(:t request from olle or more lenderers, the following criteria
should be applied:
Is Ihere a cOl/villeil/g rca.wnfor granting (III extension?
Would rh,' rcfusal ofWI e.r/Cl/siml rcduce Ihe numher of tenders 10 he
suhmiued?
Would an exlclIsion give preferelllial Ireatment to Ihose tenderers
who Url' /llIaMe 10 meet Ihe original lCllder .mhmissioll date?
Would all exlel/sion creale I/IJaecepwhle delay to Jhe project
programme?
,
3.6 Submission and Receipt of Tenders
It is the responsibility of tcnderers to ensure that their tenders are
delivered to the employer/engineer by the due submission date and time,
properly signed by authorised signatories.
Tendercrs should be instructed to return lheir tenders double-wrapped in
plain envelopes or packages using pre-addressed labels provided by the
employer/engineer. The labels should identify the particular tender and
should carry .1 code to enable the employer/enginccr to identify the
tenderer (for example. for use in the event of late tenders having to be
returned unopened). Labels should preferably be distinctive and carry
{he words "Tender Document - To remain sealed until official opening".
The employer/engineer should mark all tenders with the time and date of
receipt and ensure that they arc kept secure and unopened until the date
and time appointed for the official opening.
If tenders are delivered by hand. tenderers should obtain a receipt from
the employer/engineer recording the date and time of delivery.
Tenders received after the appointed time should be immediately
returned. unopened. to rendercrs. accompanied by an explanatory letter
giving thc date and time of receipt.
,
4.0 OPENING OF TENDERS
4.1 Opening of Tenders
At the dale and time fixed for the official opening. the employerl
engineer should check and display the scaled condition of each tender
prior to its being opened.
As each tender envelope IS opened. the employer/engineer should
announce:
Tenderer's name
Tender price.
Price of allcmativc lcnders. if appropriate.
Tender security
Following this, the employer/engineer should announce the names of
any tenderers disqualilied duc (0 late or non-receipt of Icnders.
The foregoing information should be recorded on a suitable fonn signed
by the opening oflicer and appropriate witnesses.
The official opel/illg oJfendl'rs may he carried ulII ill Of/e oftwo ways 00\"
upplvpriate to the c:;rc:umSf(.J1Ic:es.
/" Public: Tile date, lime and place of openill/-: should be adverrised
ill rhe press alld IIOfified ro renderers.
Resrricted: III rhe presellce afrhose renderers wishi"g ro affelld. all
hw'ing IJeell advised of rhe date. rime and place of rhe opening.
\. III addirioll to the ahove. allY persolls specijically illvired hy rhe
employer may also aHend, as may rcpreseflfarives of allY !:ol'ernmellf or
orher authority who are required ,\0 10 do.
V"h's,'; required orl/('rwise by finolll:illg or other illsrituriol/s, tellder
openillgs sho/lld be "Restricted" and the opening should be held 01/ 'he
same day as tenders hm'c to he submiued.
5.0 EVALUATION OF TENDERS
5.1 Review of Tenders
Following the opening, lenders should be checked by the
employer/engineer to establish that they are arithmetically correct, are
responsive without errors and omissions and consistent with the
invitation to tender.
Where arithmetical errors are found. these should be corrected in
accordance with the provisions in the instructions to tenderers.
Tenders that are considered to be substantially unresponsive should be
rejected and relUmed to the tenderers.
5.2 Tenders containing Deviations
Where a lcnder cont3ins deviations, the monetary value of the deviations
should be determined by the employer/engineer and added to or
subtracted from the tcnder price to arrive at the anticipated real cost of
the tender for comparison with other tenders received. The calculations
should be carried out using information contained in the tender or, if
appropriate information is not given. by applying commercial rates and
pnces.
If the nature of the deviations is such that it is not possible to determine
their monctary value. it is recommended Ihm the tender should be
judged to be substantially unresponsive and returned to the tenderer.
The employer/engineer should make a detailed assessment of all
responsive tenders. The assessment should be based on the evaluation
criteria as specified in the tender documents.
On complelion of the above procedures the tenders should be placed in
order of evaluated cost.
At this stage. the employer/engineer may wish to seek clarification of
information contained in the lowest evaluated tender and possibly the
second and even the third lowest. The employer/engineer should nOl
raise queries in such a manner as to elicit supplementary information
beyond the minimum required for clarification and should state that any
such funher information given will be disregarded. At the same time, a
summary of any arithmetical corrections made by the
employer/engineer should be submitted to tenderers for agreement.
5.3
\
Adjudication of Tenders
If the lowest evaluated tcnder as clarified still contains deviations which
are unacceptable to the employer/engineer. the tenderer should be
notified and given the opportunity of withdrawing such deviations in
writing. The tenderer In:..ly do so only if he conlirms in writing that the
withdrawal makes no change to the tender price. If no such confirmation
is received the tcnder should be rejected and the next lowest evaluated
tcnder as clarified should be considered. and so on.
The employer should then make his decision on which tcnder to accept.
Unless there arc exceptional circumstances. the award should be made
to the tenderer submitling lhe lowest evaluated responsive tender.
The procedurefor dealing with deviations will depend OIl the employer's
policy towards tellders which do lIot complyfully with the instructions to
telldl'rers. The procedure descrihed ahove is the olle recommended by
FIDIC as most likely /0 ensurefairlless to hOlh employers and tenderers
alld ill the l o n , ~ term to ensure that employers receive compliam
competitive tenders. Certai" employers. particularly those who recei\'e
a number of tenders ('ad, year. may "refer 10 adopt a stricter approach
and 10 reject all)' teJlllers u:hich cOlltaill deviatiolls, If this is the case. a
statemem to this effelt should he im:luded i" the instructions to
tenderers and this prot_'i'dure should the" he strictly ohsern!d.
Where financillg institution.. are involved. their procedures may
prescribe strict rule'S for ilealing witll deviations Gnd ill particular are
likely to prohi!Jit lIIty CllUII,':i' i" (("der price.
The instructions /0 tenderer,.. slumM ho\'e ,'itati'1 the policy re.l:arding
alterllative temler,f. If altenwth'e tenders are /0 be considered. tile
employer/engineer should examine a"y alternative submitted to see 1/ it
is acceptable. If it is, then it.<; cost shol/ld be evaluated and ranked ill the
order of evaluated costs. The finally accepted tender for an alternative
desi/?Il may 1I0t he that from the tenderer su!Jmiuing the lowest cOllform-
illg tender alld the employer should be permitted to accept the
alternative design if it is in his interests to do so. However, altenwtil'es
should only he considered ifa complioll/ tender Itas also been submit/ed,
otlterwise tltere is a risk tltat all tenderers might submit tenders for
alternative designs only. none of wltich might be acceptable to tlte
employel:
During tender e\'oluatitm. allY apparent "igh or low pricil1K should be
idell/ified alld drawn to tlte at/entio" ufthe em,Jloyel:
The appropriate key faclOrs and method uf evaluation should have been
established in tlte illstructiOlls /0 te"derers so that the sllhseqllell/
evaluatioll allll comparison of tenders leads to all objective judgement.
5.4
The evaluation of tenders can generolly be considered to hove three
components. The components may include:
Technical evaluation
conformity with .tpecification.t and drawinKs
comparison ofany proposed alternatives (if allowable) with the
requiremenf.'O of the tender documents
desiKn aspects for which the contractor is responsible
methods of construction and temporary works
environmental considerations
qualitya.t!illrance
pJ"{Igramme
Filllll/dol evaluatiol/
clIpital cost
discouwed cash flow and nett present value
pfogramme of paymel11s
fil/clJIc:ing arrangements
currencies
securities
i"terl'st rotes
lIOWI' pa)'In('lltslret"I' t ions
day",ork rOtes
contract price adjustment proposals
Gellc'ral controC"lllol and allministrath'e e\'aluatiOll
cOllformity "'ith illstructions to telulerer-<;
cOIl1pletelll'SS oflellder... '\
,'alillit)' of tellliers
('xcl".,iol1s lind del,illtions - Slated or implied
IIISUrOIlCl.'
experience of prnpnsl"d kl"y st{{ff
sllil'l,illg. ('USlOIlI.", IrafHIUJrf
workillg IUJlII'.';
lahour huild-up. run-down and source
Rejection of all Tenders
In the unlikely event of rejection of ~ I I tenders. the tenderers should be
~ d v i s e d of the reason. If new tenders are to be invited, the
employer/engineer should carefully review the causes leading to the
rejection and should consider modifying the tender documents or adding
to the list of selected tenderers before inviting new tenders. it is also
recommended that any new tender documents should be updated to
incorporate any modifications previously issued as addenda to (ender
documents and/or replies to tendercrs' queries.
Tenders should not be rejected and completely new tenders invited
against the original tender documents for the express purpose of trying
to obtain lower prices.
,
The release of tender securities should not be withheld, even if it is the
intention of the employer/engineer to invite some or all of the lenderers
to re-tender against ncw tcnder documcnts.
If the employer is cOflsiderillK the rejeclion of 01/ lenders because rhe
/owesr wIder exceed.I' /11" co.\" estima/es or Ille employer's budget by a
anWUI1I, ,h(' employer/e/lgilleer may II('WJtiate with Ihe f1UW
favourably plac;ecl lelldem:
III COl/ell/Ctill,1i ,\'1Iel1 lIegotiafiOlIS, rIle guieling prillciple mUM be /() ('11,\'11/'('
thai the colI}identiality alld faimess of lellderillK is preserved. III Ihe
event of a satisfaclory cOlI/raer /lot being negoliated, all tenelers may be
rejecled.
Rejec/ion of all WIden al,w justified whell:
Tel1e1as (Ire lIot slIb.ltmlfially to Ille lellder documents.
Too few lenders receil'ed to ellsure competition.
6.0 AWARD OF CONTRACT
6.1 Issue of Letter of Acceptance
The employer will nonmdly seck 10 award the conlr:lct to the tenderer
submilting the lowest evaluated responsive tender. The award must be
made during the period of lender validity or any extension thereto
accepted by the lcndercrs.
Where the lowest evaluated tender contains deviations from the
requirements of the tender documents which are not deemed to render
the lender as non-responsive and which have not been dealt with under
clause 5.3. it is normally necessary for the employer/engineer and
tenderer 10 meet. prior to ,my decision being made concerning the award
of the comraet. in order to determine and agree whether such deviations
are acceptabl.c and shall be incorporated in the contract, or whether they
shall be withdrawn by the tenderer.
Following such discussions, and assuming that agreement has been
reached on all points, the employer/engineer should prepare a
memorandum of understanding giving details of the agreements made.
This memorandum should be submitted to the tenderer for his
agreement and signature. Once this agreement has been obtained the
employer/engineer should issue a letter of acceptance, attaching the
sig.ned memorandum. to the tenderer. Where it hns not been possible to
with the tenderer suhmilling the lowest evalu:lted
tender, the above procedure should be repeated with the tenderer
submitting the next lowest evaluated tender.
The leiter of acceplance should identify the contrnct and the works to be
executed by the contractor as well as the contract price which the
employer will pay to the contractor in with the terms of the
Where the contrilct includes FIOIC Conditions of Contract for
Works of Civil Engineering Construction, Fourth Edition. the general
terms of the insurance policies must be agreed with the selected tenderer
before the leiter of acceptance is issued.
The notification by the letter of acceptance will constitute the formal ion
of the contract.
The memormulum of underslanding should be a faclUal slalemenl
recording 01/ decisions and agreements reached durin.t: Ihe pre-award
discussions. II .fllOttld normally nOl be necessary 10 record Ihe delail of
Ihe disclissions. The memorandum will become one of Ihe documents
formin;.: part ofthe contract agreement and will take precedence over all
OIher contract documellts. II is titus essential that it is signed by both
parties.
Where it is nOl immediately possihle to is.we a formal letter of
acc:eptance to Ihe successful lenderer, the issue of a leuer of intent to
enler illto a contract may in some cirnmlsta1lces sen'e a useful purpose.
Care should he t!xen:ist!d in formulating a letter ofinlt!nt so that il is 1IOf
conslrued as heing the letter ofacceptance.
If a leller of intent is issued. it should normally contain:
A c:lear statement that it intended to accept the tender together
with any L"()nditions precedent.
If the employer is preparedfor ,he colltractor to commence any part
of the works (e.J.:. lIIo"ilisation. orderin,:: of materials, lelli/IJ: of
subcontracts. etc.) then delails of silch work.
The basis ofpaymelltfor work authorised and a limit (if any) to the
financial liability which may be incurred before formal acceptance
vf the teltder.
A statemem that if tile contract is subsequemly not awarded to the
tenderer, tile properly audited costs incurred by him in peiforming
work authorized by Ille leller of intent will he paid by the employer.
A request IV II,e tenderer IV acknowledge rel:eipt of the leller of
illtent and to confirm "is acceptance of its cOl/ditiolls.
6.2 Performance Security
It is normally a reljuircment of the contract that the contractor shall
furnish a performance security within the time, and in the amount.
currency and form. prescribed in the contract documents. The perform.
ance security should be furnished before the expiry of the validity period
of the tenders.
Tenderers should be advised, in the tender documents. of the
consequences of failing to produce a perfonnance security according to
the stated requirements.
Such consequences would nomlally be that the contract is declared null
and void and the contraclQr forfeits his tender security.
The employer is then free to award the contmct to the next lowest
tenderer.
The successful tenderer's tender security must be returned to him
promptly once he has his performance security.
Wllcre employer.f lire relying on project fUlldill!!, from external financial
i/lstitutions, they should umJirm the form ofpellormance security to he
used with that ills,itwion.
If ,he timing is such that it will be impossible for the contractor, in
l:omplial/ce with the terms of the coUlract, to provide the pe,formance
securi,y before the \'olidity period of Ille ,enders has expired, tile
employer/engineer should protect himself by aski"R the other tenderers
to extend the validity pericxl oftheir tenders accordingly. Refusal by any
tenderer 10 extend the validity period of his tender for this reasoll would
not emi,le the employer to call telllier security.