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    Types Of Tenders And Tendering Process Construction Essay

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    A stamp can be said as an offer to make work or provide goods at a fixed monetary value. Originating measure of a tendering procedure in which qualified contractors are invited to subject certain commands for building or for supply of specific and clearly defined goods or services during a specified timeframe. The stamp procedure is designed to guarantee that the work to be done for client/government is given out in a just manner. For illustration in Malaysia, there are a figure of policies known as procurance policies which guide authorities of Malaysia on how to do determinations on which stamp to accept. Although monetary value is really of import in the determination on which stamp or command to accept, it is non the lone factor taken into history.

    Once client/government accepts a stamp, it is adhering on both parties. This means that the individual or company that won the stamp has to supply the goods or services in the mode agreed to and at the monetary value offered, and client/government must pay the in agreement monetary value at the in agreement clip. In other words, one time accepted, a stamp is a binding contract.

    2.2 Types of tendering

    When talk about tendering, it is involved some sort of complicated procedure and process. Before any tendering procedure can be done, professional squad and employer must do certain all necessary stamp paperss have been prepared, checkered and approved. The beginning of the support besides must hold been identified and the undertaking funding put in topographic point. The processs for subsequent phases should hold been established with the express consent of the employer to guarantee the tendering procedure will travel swimmingly.

    What types of tendering that employer want to take is depends on nature of contract, complexness of the building, expertness needed and several grounds. But normally for the authorities undertaking all over the universe, is tend to do unfastened stamp to guarantee the procurance and works to be done in reasonably mode without bias. As the research worker reference before, unfastened stamp is one of the types of tendering that normally used in this universe. Actually there are several types of stamp including unfastened stamp, selective stamp, negotiated stamp, consecutive stamp and term tendering.

    2.2.1 Open stamp

    Open tendering is the chief tendering processs employed by both the authorities and private sector. The client advertises the stamp offer in the local newspaper giving item and cardinal information of the proposed plants and ask foring interested contractor to tender. In the legal sense such stamp notices constitute invitation to handle, a mere petition by the employer for suited contractor to subject their commands or offers.

    If the pre-requisite to tendering on the signifier of ownership of the necessary enrollment has been identified in the stamp notice, so the advertizement is directed to merely that peculiar category of the public holding the said makings. In order to cut down figure of questions, earnest money is deposited ( for private undertaking ) . Until the reception of a bone fide stamp selected so it will be returned. Although monetary value is really of import in the determination on which stamp or command to accept, it is non the lone factor taken into history. Client does non adhere to accept the lowest or any offer. The advantages and disadvantages of unfastened stamp are stated below:



    It allows any interested contractor to tender. Therefore it gives chance for an unknown contractor to vie for the work.

    The stamp list can be long as excessively many contractors tendering for one occupation.

    Leting the stamp list to be made without prejudice. Client will obtain the deal possible. No favoritism in choosing contractors.

    Uneconomic usage of beginning.

    Guaranting good competition non obliged to accept any offers.

    Public answerability may be questioned if the lowest offer is non accepted.

    Traditional method of tendering, familiar to all sector of the technology and building industry.

    Does non pull reputable and established contractor unless they are forced to, due to miss of work.

    Selective stamp

    Selective tendering is the one options developed to turn to the restrictions of the unfastened tendering process. In this method, a short list of contractor is drawn up and they are invited to subject stamps. The intent of the elected tendering are to better the quality of the commands received, to guarantee that contractors with the necessary experience and competency are given the chance to subject the necessary commands, due to urgency work involved, for specific grounds of the employer, eg security grounds in authorities undertakings. etc. and to do the tendering process more manageable and less a load on the parties involved. Such list may be prepared through recommendation from the Client ‘s professional advisor whom have knowledge of the Contractors set abouting the work in the yesteryear or advertizement through the newspaper ( prequalification ) . The advantages and disadvantages of the selective tendering are stated below.



    Merely the competent contactors were invited to tender, so the lowest can be accepted.

    Reduces the handiness of work for other contractors particularly new contractors.

    It reduced the cost of tendering ( economic usage of resources, reduced stamp certification, shorter stamp periods, better direction of the stamp procedure, etc. )

    Tender Price may constantly higher than would hold been in unfastened tendering.

    Greater opportunity of collusion.

    Tendering period longer because it involved two distinguishable phases.

    Favoritisms may happen in the short listing.

    Two Stage Selective Tender

    Two phase selective tendering combined elements of competition and dialogue into a expression where the employer could use the contractor ‘s expertness at an early phase of the undertaking rhythm so as to maximise invention, inventiveness and quality and at the same time optimize cost, clip and resource input. A contractor is selected competitively early in the design procedure. The stamp paperss contain about measures of the major value points. As design and planning proceed, the concluding stamp is developed from cost and priced informations supplied with the initial stamp. Two phase selective tendering was really popular in developed states. It was different from selective tendering because has two ( 2 ) distinct phases viz. :

    Choice of suited contractor

    This involves the choice of a suited contractor and the constitution of a degree of pricing for subsequent dialogues.

    The aim is to choose suited contractor every bit early as possible is to work together with the professional squad and to set up a degree of pricing for subsequent dialogue.

    The standards for short listing is usually confined to points such as proficient and fiscal capableness, experience in similar plants and extent of resources ( work force, works and equipment ) .

    The pricing papers should be flexible plenty to provide for accommodation of monetary value fluctuation for the period between two phases and the pricing of the 2nd phase.

    In choosing a suited campaigner, a footing for pricing the subsequent 2nd phase should be established consequently.

    Determination of Contract Price

    Once a suited contractor is selected, he will work together with the undertaking squad get down lending to the pre contract procedure in his capacity as indifferent but independent building expert. This contractor will lend the followers:

    Contribution as a Technical Advisor to the Design Process

    Practical Skills and Buildability

    Minimization of Project Delay

    During this phase, a dialogue to make an understanding on the concluding contract monetary value is undertaken and the pre contract procedure is perfected.

    If no understanding being reached, the employer has an option to abandon the tendering exercising and re-tender the plants utilizing any other tendering process.

    The application of two phase selective tendering might be appropriate where the plants are a really complicated nature, where at the clip of choice of the contractor, the magnitude of the work may non be known with sufficient certainty and where it is an indispensable pre-requisite for plants to be finished by an early completion day of the month. Table below are some advantages and disadvantage of two phases selective tendering.



    Benefit of the contractor ‘s expertness in buildability, specializer cognition in proprietry systems, undertaking programming, etc ensuing in value for money.

    Its application requires a high degree of acquaintance and committedness on the portion of employers and contractors.

    Early beginning of work at site even when the magnitude of the plants is non known with sufficient certainty at the clip of site ownership.

    Owing to a comparatively smaller component of competition, but on the other manus higher dialogues content, the stamp procedure is comparatively more expensive and longer than other common processs.

    Savingss of clip due to the convergence of the design and tendering phase.

    Should the 2nd phase be deadlocked or result in no acceptable understanding being reached, the stamp procedure has to be initiated all over once more, albeit, through a different path. This incurs a clip and cost punishment to the undertaking as a whole.

    The process utilizes the best facets of both competition and dialogue to get at the most favorable agreement at an optimal steadfast monetary value before work commences.

    This procedures requires a high degree of committedness, unity and good religion on the portion of both sides which unhappily is normally deficient, therefore the evident failures encountered to day of the month.

    Since the contractor is portion of the undertaking squad at a really phase of the undertaking, this consequences in better communicating and information flow.

    By and large there will be fewer claims and differences in the station contract award phase due to the contractor ‘s engagement at the design / pre contract phase. Experience has shows that the contractor has a clearer apprehension of the demands and a better grasp of the elaboratenesss of the design and contract certifications.

    Negotiation Tender

    Negotiation tendering is extensively used in the technology and building industry get downing from tendering till difference declarations, i.e. under the manners of pre-contract dialogues and station contract dialogues. Normally with individual contractor but may be up to three contractors. Negotiation procedure involves are as follows:

    Designation by the employer of a suited contractor to negociate with. The contractor can be selected either from the employer ‘s ain list of penchants or on the advice of the professional squad.

    The contractor being apprised of the workscope.

    The selected contractor is issued with inside informations such as the range of work involved, relevant drawings, design and /or information to enable him to appreciate the extents of duties and the employer ‘s existent demands. Some employers prepare and issue to the contractor proper stamp paperss inclusive of a nominative measures of measures to help contractor in pricing the plants for the extroverted dialogues. Negotiations can be applied to the following type of contract:

    In Partnering type of contracts under the so called win-win expression.

    Where the employer has a long term concern relationship with the contractor.

    In state of affairss where the parties are in a relationships of keeping and subordinate companies.

    Where the contractor is involved in the funding of the undertaking.

    In state of affairss where the employer finds it advantages to use the same contractor to go on an initial or bing contract for the new plants

    Where there is a pressing demand to hold a really early start of work on the site and to finish the plants on a fast tract footing.

    In particular fortunes e.g. Security grounds, exigencies etc where it is expedient to procure the services of a peculiar contractor merely.

    Where there is merely a individual contractor who is the lone one available or with ether the particular accomplishment or resources to transport out the peculiar plants.

    The employer ‘s resources are either limited or forced thereby doing the usage of the other tendering impractical.



    Merely reputable contractor are invited for dialogue.

    The cost work is likely higher than competitory stamp.

    The Contractor can lend his expertness during design phase.

    Reduces the handiness of work for other contractors.

    Early Beginning of work on site. It shortens the period involved in naming the contractor.

    Should the dialogues be dead end or turn out finally unsuccessful, this causes wastage of valuable resources on both sides and loss of clip for the employer, thereby detaining the overall choice of suited contractor.

    Reduce hazard of failure

    Best options for the employer to follow is particular fortunes such as exigencies, security grounds and etc.

    Experience has shows that contracts allow out this footing consequence in fewer differences and claims during the building phase.

    Term Tender

    Term tendering usually used on major care undertakings. It may be awarded to a contractor to cover a scope of different edifices in different locations. It is frequently limited to a fixed clip graduated table, although the demands of the client may frequently necessitate this to be extended. It is like a standing offer to set about a slackly defined extends of work normally within a fixed clip period. The type of work is normally specified and priced in a agenda of rates. The contractor will ab initio be offered the work to cover a figure of different trades normally on the footing of monetary values contained in a agenda prepared by the client.Where the client supplies the rates for the work, the contractors are given the option of citing a per centum add-on or tax write-off from these rates depending upon their desire to win the undertaking. The contractor offering the most advantageous per centum to the client will so be awarded the contract. An indicant of the sum of work expected over the specified period of clip will help the contractors in the consideration of the per centum to be quoted.

    2.3 Conventional Tendering Procedure

    As the research worker mentioned before, this chapter will concentrate on conventional stamp while the following chapter will concentrate on electronic tendering. Therefore readers will see clearly background on conventional tendering and electronic tendering. Conventional tendering procedure will affect pre-tender phase, stamp advertizement phase, shutting of stamp, stamp gap procedure, stamp rating procedure and eventually tender award.

    2.3.1 Pre-tender Phase

    At pre-tender phase, when the clients have an thought, client will name adviser to discourse further about the undertaking. Consultant will make their occupation, reding, pull offing the stamp and contract, and besides transfer the thought into the drawing. At this phase client and advisers will brainstorming about the range, clip to finish and budget that client willing to apportion. Researcher believes that pre-tender phase is most important affair because it will originate the following measure of a undertaking. If the pre-tender phase is failed, the undertaking will non successfully complete.

    2.3.2 Tender Ad

    Tender advertizement besides called stamp notice. The conventional stamp notice will publicize in local newspaper. In stamp notice, basic demand should be looking are:

    Title of the undertaking.

    Class of contractor, caput and subhead needed.

    Location, day of the month, and clip to obtain the stamp papers.

    Fees for stamp papers.

    Location, day of the month and clip for entry of stamp physician.

    2.3.3 Shutting of Tender

    In stamp notice will advert the clip and day of the month of stamp shutting procedure. If the contractors fail to subject their commands within specific clip and day of the month, it considers the contractors refuse to offer for the stamp. At that clip besides tender cogency period is started. At this period, contractors can retreat back their commands if they are no more interested to contend for the stamp. Consultant usage this period to do appraisal and rating each of the offers.

    2.3.4 Tender Opening and Evaluation Process

    Measure surveyors normally will manage stamp gap procedure. In order to continue the unity of the competitory procedure, it is imperative that the rating of proposals is undertaken objectively, systematically and without bias towards peculiar providers. Tenders are normally evaluated against a pre-determined set of standards. The rating of the stamps shall be prepared the soonest possible after the stamp gap. A study prepared by the Quantity Surveyor will depict the findings of the said rating and it will be supported by tabular arraies and graphs. In the terminal, the Quantity Surveyor will urge which tenderer, who in his sentiment, is the most suited to set about to put to death the undertaking.

    2.3.5 Tender Award

    An rating squad will analyze each stamp received and do recommendations as to which stamp represents best value for money. Once the contract has been awarded, both the successful and unsuccessful tenderers will be notified. Once the concluding determination has been made on the stamp award, the stamp decision maker creates the stamp consequences presentment which is in missive signifier, and so sent to all take parting contractors.

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