q.s app. advanced-tender

8/8/2019 Q.S App. Advanced-Tender

1/22

ADVANCED QUANTITY

SURVEYING APPLICATION

TENDER PROCESS TENDERDOCUMENTATION

SESSION 3

PROF CHITRA WEDDIKKARAFRICS AAIQS FIQS ARAIA FIA(SL)

NOVEMBER 2006


2/22

2

TENDERING PROCESS

Tendering Process

Is the process by which a client/employerprocures a building project.

A Tender A tender is the final price or offer which is

submitted to the client by the contractor and is asum of money for which he is prepared to carry

out the work and will include not only theestimate but also the a margin of overheadsand profit


3/22

3

TENDERING & ESTIMATING

A distinction between two words

Tendering and Estimating

Often used to mean same thing in the industry but not

the same Estimate is the is the preliminary assessment of thenet cost of carrying out a specified amount of buildingwork

Where as Tender is the final price or offer made to the

Employer by the contractor and is the sum of money forwhich he is prepared to carry out the work and not onlyincludes the estimate but also the margin of profit andoverheads


4/22

4

FUNCTIONS OF AN ESTIMATORThe Estimator:

The person in the contractors organization responsible for the preparation ofprices and estimates for the building work

Tries to predict as accurately as possible the cost of construction

Has the responsibility of using his/her skill, experience, and judgement inattempting to assess the extent of likely future costs

Should have through working knowledge of many aspects of the constructionindustry especially with regard to the effects on the cost

Should have a knowledge of building technology and services

Management theory and techniques with regard to precontract planning,tendering policy and the organisation of resources

Understand Quantity surveying, including understanding of contractdocumentation and forms of contract


5/22

5

TENDER DOCUMENTATION &

TENDERERS SELECTIONTender documentsTHE PURPOSE

Must clearly define the contractual obligations of parties

Provide details of all work covered under the tender

Draw attention to any special conditions or obligations from normal practice

Must provide any supporting information required

Nominate person to COLLECT necessary information

Should provide positive encouragement to tenderers

TENDERS selection

Open tenders

Selective tenders

Pre-registered tenders

Invited-or pre-qualified tenders

Negotiated tenders


6/22

6

DECISION TO TENDER

Decision to tender

The contractors estimating capabilities are scarce resource

Producing of tenders cost money

Great care must be taken before committing to the costly estimatingoperation

Criteria influencing the decision to accept or reject an invitation totender

Genuineness of the invitation

The nature, the size and complexity of work

Three year continuous job may be tempting but with limitedresource and equipment a realistic contractor may not over

stretch Tackling one large job may limit himself in the market for the

next two years

The regular clients may forget him

The type of work may not be suitable

The principal parties involved

Who the client is?


7/22

7

Criteria influencing the decision to accept or

reject an invitation to tender

Number of nominated sub contractors

Administrative problems and target dates)

Time allowed for tendering

Time available to prepare tender with a reasonable degreeof accuracy

Firm or fluctuating price required

Contractor may not be ready to accept the risk or pricingfirm price contracts

Only interested in a fluctuating price basis


8/22

8

Criteria influencing the decision to accept or

reject an invitation to tender

Large degree of risk in attempting to predict what inflation is likely tobe in an unstable economy

Contract details

Important factors such as the contract period, starting date

whether any phased work exists

access to site, site conditions

Location

Working conditions all having a bearing on the suitability of theproject


9/22

9

Criteria influencing the decision to

accept or reject an invitation to tender

To keep good relations resulting in the possibility of further work

The value of the main contractors own work, PC sums etc

The quantum of work to be carried out by his own work force

Current work load

Number of contracts he/ is engaged in?

Economic, Industrial and political climate

Market price (boom times the demand for material and labour forces)

Industrial relations (labour productivity, industrial disputes and stoppages)


10/22

10

Criteria influencing the decision to

accept or reject an invitation to tender

Who the architect and the quantity surveyor is?

Attitudes of the parties?

The consultants track record in terms of dispute

generation and resolution


11/22

11

THE DECISION TO TENDER

All above information must be recorded by

the estimator and submitted to the

management to discuss the possibility ofsubmitting the tender. If after duedeliberations the management decides totender then the acceptance to the

invitation to tender must be submitted tothe architect for the dispatch of the tenderdocuments


12/22

12

Collection of information to prepare

the tender Tendering time limited

Estimator must plan the program carefully

Before pricing all details regarding tender must be

collected Materials prices must be obtained

Sub contractors quotations must be collected

Plant equipment hire rates must be collected

All preliminary items such as electricity and telephone

charges insurance premiums water rates etc


13/22

13


the tender Enquiries to suppliers must be on standard printed forms to besent out to the suppliers

To get accurate prices the following must be given to the

supplier

The specification of the material The quantity of material required

Trade discounts,

Indication of delivery dates

The terms on which he price required

Discounts and Proforma

Preferred method of unloading


14/22

14


the tender The date of submission of sub contractors quotations

Anticipated starting dates and completion dates

Unloading and storing f materials

Security and location of services Visit to the site and architects office

Plant manages advice on scaffolding

Contract manger on Labour

Attendance provided by the main contractor if it is a

subcontract Details of site conditions access spot items

Cash flows etc


15/22

15

Documents Forming a Tender

document

1. Invitation for bids

2. Instruction to Bidders

3. Standard forms Bid security

Letter of acceptance

Agreement Performance security

Advance payment Security

Retention Money guarantee

4. Conditions of contract

5. Form of Bid and qualifications

6. Specifications7. Drawings

8. Schedules

9. Bills of quantities

10. Any other document listed in the contract agreement


16/22

16

SUBMISSION OF TENDER

Tender prepared by the estimator must besubmitted to the commercial manager for addingof overhead and profit margin of the company

The conversion of the estimate into tender isundertaken by the management at anadjudication meeting where aspects other thanpure cost are considered

Necessary covering letter prepared and

including all relevant documents pertaining tothe tender must be packaged for submission

The tender document must be submitted at thestipulated time


17/22

17

TENDER EVALUATION

Tenders submitted by the various contractorsare checked for the conformity and anyqualifications

Arithmetical checks must be carried out to checkthe accuracy of the submission

Evaluation report is prepared by the consultantson the reasonable and the cost effective offerwhich is in conformity with the specifications etc

Recommendation is made by the consultants tothe suitability and the choice of the tender for theproject


18/22

18

TENDER RECOMENDATION

On the Basis of recommendation of the

consultant the employer selects the

suitable contractor

The letter of acceptance or the letter of

award is then issued to the contractor

The contractor then gets ready for the

commencement of the project and

mobilization


19/22

19

Ethics in the tender process

INTERNATIOAL CODE OF TENDERING IS BASED ON TENETHICAL PRINCIPLES

Tendering at all levels conducted honestly

Parties must conform to all legislative obligationsincluding those required by Trade practices andconsumer Affairs laws

Parties should not seek and submit tenders without afirm intention to proceed

Parties should not be engaged in any practice whichgives one party an improper advantage over the other


20/22

20

Ethics in the tender process

Parties should not be engaged practices such as collusion ontenders, inflation of prices to compensate unsuccessful tenders,hidden commissions or secret arrangements

There should not be conflict of interest among parties

Conditions of tender must be the same for each tenderer on anyparticular project

Tender documents must specify the clients requirements andindicate the criteria for evaluation

The confidentiality of all the information provided must be preserved

Any party with conflict of interest must declare as the conflict isknown to the party


21/22

21

Discussion questions

Your company has been asked to show expression of

interest in the construction of a cause way between Dubai

and Qatar?

Your commercial manager has requested you to

prepare a questioner in order for him to attend the pre-bid

Meeting.

What factors will you consider in preparation of such paper

to help the commercial manager in the decision to accept

or reject an invitation to tender


22/22

22

Discussion questionsSelect a Tender document of your own choice for a low cost commercial/ industrial

Project. (FIDIC 1987 edition )

Evaluate the invitation to tender in the document and identify the criteria in the invitation

to tender, tender documents and conditions of contract that will influence a decision to

tender. Identify construction and estimating workload conditions that will influence the

decision to tender?

Assuming the following conditions

That you are a medium size construction company

At present you find yourself stretched to 75% of your capacity.

There is the possibility of a down turn in the construction industry

Identify the company conditions that will influence a decision to tender and prepare a response to

the invitation. You are given only 10 days to tender

There is a few prime cost items in the contract