Lecture 6

ARCHN305 Building Construction III
BUILDING CONSTRUCTION III

ARCHN305
TENDERS AND BIDDING TENDERS AND BIDDING
Lecture 4, 5 - CONSTRUCTION MANAGEMENT & BUILDING ECONOMICS
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Sunday, March 21, 2010
TENDERS AND BIDDING TENDERS AND BIDDING
HESHAM KHAIRY
Sunday, April 4, 2010 Lecture 7 Construction Tenders and Bidding
What is Tender?
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.
What is Tendering?
Tendering is the management and commercial function of determining the tender
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Tendering is the management and commercial function of determining the tender
based upon the estimate and other details prepared by contractors estimator and
other personal.
Difference between a Tender and a Contract
People often use the same terms for different things and different terms for the
same thing. The term tender formally means an invitation to trade under the terms
of offer. A contract is the term used for when the parties have reached agreement.
Tender system
The process of finalization of contracts is achieved through the tender process.
Most effective method of securing competitive rates.
New technologies and options are received through open tender process.
Advantages of Tender process
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Tender Notice or Notice Inviting Tender
The Tender Notice is a brief description of the job being tendered which is to be
published in Newspapers and on the Internet.
The Internet is a very cost effective way of publishing the tenders.
Format of ideal Tender Notice
Name of the Project.
Name & Address of the Company floating the tender.
Name of work, materials or services.
Place of work location.
Approximate estimated cost of work.
Period of completion.
Date on which the Tender Document sale commences.
Date and time up to which tender documents can be obtained.
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Date and time up to which tender documents can be obtained.
The cost of tender documents.
The date and time up to which the tenders to be submitted and are to be opened.
Specification.
The capacity, past credentials and financial status of the tendered is thoroughly
investigated before awarding the contract. These aspects should be commented
in detail along with the tender documents.
The rates should be quoted in the numbers and words without any corrections.
To take advantage of any possible increase in statutory taxes & duties, the tax
component such as excise duty, Sales Tax, Works Contract Tax, etc. should be
clearly indicated.
Guidelines for filling of Tender System
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Tenderness should not quote many special conditions as some of them may
have financial implications, did this can be added to your quoted cost. Also it
creates confusion and creates room for manipulative forces.
The rates quoted for individual items should be realistic and should not be
abnormal and unworkable.
Types of Tender
Types of tender:
Open tender/ Public tender
Close tender
Competitive tender
Direct Order tender
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Direct Order tender
A tender that received a result of competitive tender.
The system of invitation of tender by public advertisements through
Newspapers or the Internet in the most open public manner is called the Open
Tender System. This is most effective way of obtaining competitive rates.
Open Tender
Limited tenders:
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In this case only a limited number of agencies are asked to bid for the job.
These agencies may be short-listed from the Approved list of the contractors.
Disadvantage of Open Tender
The process is little bit slow
Invited through known contractors.
In a closed tender investment process, invitations to tender are issued to a pre-
determined list of organizations. There must be at least two organizations.
Close Tender
Advantage of the Close Tender
Do it fairly quickly in close tender.
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Do it fairly quickly in close tender.
Disadvantage of the Close Tender
Get complained by public for keeping the tender close.
Non good in government.
A tender is the completed and priced pre-prepared document that lays out all
the terms, conditions and specification.
The Council usually invites between 6-7 suppliers to provide a tender.
The tender enquiry is issued to all suppliers on the same day.
The tender period allowed for pricing and submitting a tender varies; however it
Competitive Tender
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The tender period allowed for pricing and submitting a tender varies; however it
is normally around 4 weeks.
Tender returns all come back in plain, unmarked envelopes to the Head of Legal
Services for opening by the Procurement team, on the same day and at the same
time.
A direct order tender that you name a contractor to implement the project.
Cases of Direct order
Private projects.
Projects of low cost.
Vital projects like Military projects.etc.
Direct Order Tender
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BUILDING CONSTRUCTION III

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