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TENDER PROCESS
AND
DOCUMENTATION
Lecture by:
Ms. Noorhidayah Sunarti (012-6254776)
LOC1/AC2 1
WHAT IS TENDER?
LOC1/AC2 2
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.
LOC1/AC2 3
WHAT IS
TENDERING ?
LOC1/AC2 4
Stages of a project
Stage 1: inception & feasibility identifying
project objectives / set up project brief
LOC1/AC2 5
Stages of a project
LOC1/AC2 6
Tendering
Will be started after the design complete and
project budget must be approved
The process that is used to obtain offers
leading to a contract between:
client contractor
client consultant
main contractor sub-contractor
LOC1/AC2 7
Purpose of tendering process
LOC1/AC2 8
Difference between a contract and
a tender
LOC1/AC2 9
General
TENDERING
PROCESS
LOC1/AC2 10
Tendering process
PRINCIPAL ACTIVITIES
LOC1/AC2 11
Tendering process
PRINCIPAL ACTIVITIES (contd)
LOC1/AC2 12
Stage 1: Selection of the most preferable or
appropriate contract procurement
method.
LOC1/AC2 14
Stage 3: Preparation of tender
documentation typical contents
Letter of invitation
Checklist for submission of tender
Articles of agreement
Conditions of contract
Form of tender
Tender specifications
Bills of quantities
Tender drawings
Sample copy of letter of acceptance
Sample copy of bang guarantee for performance
bond
Schedule of day work rates
Sample copy bank guarantee for advance payment
LOC1/AC2 15
Tendering process
LOC1/AC2 16
Stage 1: Preparation
LOC1/AC2 17
Stage 2: Approval to tender
LOC1/AC2 18
Stage 3: Documentation
Contract based on quantities Contract based on tender & specs
Compilation of: Compilation of:
Letter of invitation to
Letter of invitation to tenderers
tenderers
Articles of agreement /
Articles of agreement /
conditions of contract
conditions of contract
Form of tender
Form of tender
Form of tenderers details. i.e:
Form of tenderers details.
contractors registration,
organization background, track i.e: contractors registration,
record (past and present organization background, track
projects) record (past and present
projects)
Letter of acceptance
Letter of acceptance
Bank and insurance guarantee
Bank and insurance guarantee
forms (performance bond)
forms (performance bond)
Bank and insurance guarantee
Bank and insurance guarantee
forms (advance payments)
forms (advance payments)
Specifications
Specifications
Bills of quantities
Summary of tender
Relevant drawings
Schedule of rates
LOC1/AC2 Relevant drawings 19
Stage 4: Invitation
LOC1/AC2 20
TENDER NOTICE
OR NOTICE
INVITING TENDER
LOC1/AC2 21
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.
LOC1/AC2 22
Format of an ideal Tender
Notice
a. Name of the Project. i. Date on which the Tender
b. Name & Address of the Document sale commences.
Company floating the j. Date and time up to which
tender. tender documents can be
c. Name of work, materials obtained.
or services. k. The cost of tender
d. Place of work location. documents.
e. Approximate estimated l. The date and time up to
cost of work. which the tenders to be
f. Earnest Money. submitted and are to be
g. Period of completion. opened.
h. Date on which the Tender m. Specification.
Document sale commences. n. Eligibility Criterion.
LOC1/AC2 23
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
LOC1/AC2 24
Guidelines to fulfill in the
Tender System
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.
LOC1/AC2 25
Tenderers 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.
LOC1/AC2 26
Stage 6: Award contract
LOC1/AC2 27
TENDER PROCESS
FOR CONTRACTOR
LOC1/AC2 28
Tendering process
Stage 6: Stage 5:
Stage 4:
Submissio Conversion
n of Commercial
of estimate
tender appreciation
to tender
LOC1/AC2 29
Stage 1: Decision to tender
Receipt of tender documents
Pre-tender data sheet
Decision to tender
Consider implications of:
Bonds
Warranties
Parent company
Guarantees
Funding
LOC1/AC2 30
Stage 2: Determine basis of
tender
Abstract materials and subcons
Sent out enquiries
Consider construction methods / prepare method
statement
Design temporary works / consider alternatives
Prepare outline programme
Check major quantities
Identify restrictions
Visit site and compile site report
Campaigning meeting (designating areas
responsibilities)
LOC1/AC2 31
Stage 3: Preparation of cost
estimate
Calculate recurrent rates using:
Operational
Unit rates
Man-hours estimating
LOC1/AC2 32
Stage 4: Commercial
appreciation
Tender committee meeting part 1-
Review:
Method
Programme
Technical and commercial risks
Cash flow and finance
Use of own plant
Competition
Commercial opportunities
Economic climate
Check prelims against historical cost data
LOC1/AC2 33
Stage 5: Conversion of tender
estimate to tender bid
LOC1/AC2 34
Stage 6: Submission of tender
LOC1/AC2 35