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1920 Lect 04a Tender Process

The document provides an overview of the tendering process for construction projects. It discusses [1] what a tender is and the purpose of tendering, [2] the key activities in the tendering process including selecting a procurement method, developing a tender list, preparing tender documentation, inviting tenders, and evaluating submissions, and [3] the types of documentation involved at each stage such as forms of tender, conditions of contract, bills of quantities, and performance bonds.

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Qayyum
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304 views

1920 Lect 04a Tender Process

The document provides an overview of the tendering process for construction projects. It discusses [1] what a tender is and the purpose of tendering, [2] the key activities in the tendering process including selecting a procurement method, developing a tender list, preparing tender documentation, inviting tenders, and evaluating submissions, and [3] the types of documentation involved at each stage such as forms of tender, conditions of contract, bills of quantities, and performance bonds.

Uploaded by

Qayyum
Copyright
© © All Rights Reserved
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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PRE-CONSTRUCTION

Tender:

Process & Documentation


Terms used throughout:

Tender / tenderer
Bid / bidder
Tender activities
Tender documentation
Contract/ contractor
Client
Consultants
WHAT IS A 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.
Tendering

Will start 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 - Main contractor –


Consultant - Sub-contractor
Purpose of tendering process

1. To select a suitable contractor at a time


appropriate to the situation of the project.

2. To obtain from the contractor selected at the


proper time, an acceptable tender or offer
upon which a contract can be let.
TENDER CONTRACT

A tender formally A contract is the term


means an invitation used for when the
to trade under the parties have reached
terms of offer. agreement.
Tendering Principal Activities

1. Selection of the most preferable or


appropriate contract procurement method

2. Development of tender list

3. Preparation of tender documentation

4. Invitation / calling off tender

5. Preparation and submission of tenders


Tendering Principal Activities

6. Receipt and opening of tenders

7. Evaluation of tenders

8. Acceptance of tender award or award of


contract
(1) Selection of the most preferable or
appropriate contract procurement
method.

Traditional contract procurement route


Longer time – lead to critical work scheduling
Less errors – more precise

Fast-track contract procurement route


Shorter time
Consequences – may be lead to critical error,
variation.
(2) Development of tender list

Potential tenderers can directly apply to


the employer for future works.

Employer generate list based on previous


Dealings

The professional team generate their own


list and recommend to the employer.
Pre-Qualification of Tenderers

Class of Contractors (database)


Contractors registration (Kem
Kewangan, CIDB, PKK etc.)
Experience/ Related, Current
Specialist works
Pre-Qualification of Tenderers

Methods & techniques to pre-qualify varies


but it should include obtaining the EVIDENCE
OF CAPABILITY from their:

 Experience (relevant)
 Financial strength (Bank Statement)
 Paid-Up (Authorised) Capital
 Staff strength
Pre-Qualification of Tenderers

- Inclusion of too many tenderers (while


promoting competition) will reduce the
attraction for many of the best-qualified
contractors.
- Too few tenderers will generally increases
prices because of lack of competition.
Pre-Qualification of Tenderers

 Strike a reasonable balance to


stimulate high interest while
assuring reasonable competition…6
to 8 ok generally
Pre-Qualification of Tenderers

- Prior Pre-Qualification process can


almost ascertained that the award will
go to the lowest evaluated tenderer

- But tender document (sometimes)


states that the lowest may not
necessarily be chosen (i.e., based
solely on tendered sum)
(3) Preparation of tender Documentation
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 bank guarantee for performance
bond
Schedule of day work rates
Sample copy bank guarantee for advance
payment
(3) Preparation of tender Documentation

Letter of invitation to tenderers

Articles of agreement / conditions of contract

Form of tender

Form of tenderer’s details, i.e: contractor’s


registration, organization background, track
record (past and present Projects)
(3) Preparation of tender Documentation

Letter of acceptance
Bank and insurance guarantee forms
(performance bond)
Bank and insurance guarantee forms (advance
payments)
Specifications
Summary of tender
Schedule of rate
Relevant drawings
Tender Documentation
(Conventional)

Invitation to Tender
Tender Form
Bill of Quantities/ Itemised/ Lump Sum
Tender Drawings
Form of Contract (IEM, PAM)
General Conditions (applicable to all
contracts)
Special Conditions (applicable/specific for a
partulcar contract)
Tender Documentation
(Conventional)

Work Included/ Not included (Optional)


Addendum
Supplemental
Construction Schedule/ Alternatives
Form of Performance Bond
Tender validity period
Tender Documentation
(Conventional)

Tender Form Includes:


Statement that Tenderer has examined all plans
etc (visit site)
Statement that Contractor will execute the project
if awarded
Agreement to submit Performance Bond
Contract Sum (Amount)
Completion period
Other special provision (if applicable)
Tender Documentation
(Design & Build)
The Needs Statement spells out almost
everything:
(professional, experts, experiences inputs)

Planning and zoning requirements


Architectural & building concept
Infrastructural requirement
Mech. & Elect. works
Contractual requirements (Bond, warranties,
design guarantee, retention, DLP, LAD etc..)
Tender Documentation
(Design & Build)
RFP – Request For Proposal
TOR – Term of Reference

 Request for the interested/ selected


contractors to state comprehensively
about what are required by the Client in
meeting their Needs.
 RFP should give clear picture of what
Client wants & how Contractor can fulfill
them
Tender Documentation
(Design & Build)
Content (cont’d):

Statement of works
Client requirement
Deliverables
Client-supplied items
Type of Contract
Terms of payment
Tender Documentation
(Design & Build)

Content:
Schedule completion
Evaluation Criteria (technical capabilities,
financial strength, registration, past record,
expertise, Company’s background,
proposed or alternative schedule)
Estimate (budget)
Confirmation of site visit?
Tender process
Stage 1: Preparation

Stage 2: Approval to Tender

Stage 3: Documentation

Stage 4: Invitation

Stage 5: Evaluation

Stage 6: Award
Stage 1: Preparation

Final completion of drawings, specification,


measurement / take-off process.

Choose conditions of contract.

Parties involved: architect, engineers,


QS, client, project manager
Stage 2: Approval to tender

Discussion and decision on type of tender


to be used.
Selection of tender:
Parties involved: CLIENT, CONSULTANT,
PROJECT MANAGER

Open
Selective
Negotiate

Shortlist the selected contractor


Stage 4: Invitation

Based on selection of tendering


methods

Open / competitive / bid tender –


produce tender notice

Selective – shot listed contractors will


be invited to tender if they wish

Negotiated – only one contractor is


approached- direct entry to project
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.
CONVENTIONAL
CONVENTIONAL

https://www.jkr.gov.my/tender/
http://www.ukas.gov.my/en/carta-aliran-proses-kelulusan
Format of an 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.
 Earnest Money.
 Period of completion.
 Date on which the Tender Document sale
commences.
Format of an ideal Tender Notice (cont’d)

 Date on which the Tender Document sale


commences.
 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.
 Eligibility Criterion.
Stage 5: Evaluation

Received tender submitted by contractor

Tender assessment / evaluation

Tender recommendation / report – tender


board

Completed tenders are received arithmetical


check
Reasonable tender sum
Reasonable completion time
Capabilities of tenderers under considerations
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.
Tender Evaluation

QS/Engineer will prepare the Tender Report


summarising all the bids submitted under the
required deadline.
Each tenderer (contractor) will be checked in
details; quotations, unit prices, other pertinent
factors (merits/ demerits), completion time,
alternatives.
Tender Clarification/ Interviews where required
Preferred contractor determined and justified.
Stage 6: Award of Tender

If Tender Report is accepted, a recommendation


is made to Client (Management) to decide.

Pre-award meeting with contractors – validation of


lowest complying bid

Validate lowest bid - Pre-contract meeting


with contractor for contract signing

Approval by tender board / treasury (tender


exceeds RM10 mill.) – an acceptance of tender form
is issued to tenderer , signed by the authorised
officer
Thank you

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