Ahmed Elyamany, PhD

October 24/27, 2010

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By the end of this lecture, you will:

1. Define the steps of Tendering.
2. Define the components of contract
documents.
3. Estimate Tender price.
4. Prepare a balanced and unbalanced bid.

 :





Initial Bond
Contract Bond

1.Decision
to Tender

No

Yes
1.Inspecting Contract Documents

2.Decision
to Tender
Yes
3.Estimating Process
4.Tender Adjustment
5.Submitting Tender

Do nothing

No

 :


Mobilization and demobilization -


-

Include:
1. Instruction to Bidder
2. Drawings
3. Specification
4. Bill of Quantity
5. Contract conditions
6. Letter of offer/Proposal/Bid form

1. Instruction to Bidder
:









:
:
:

2. Drawings

(
)
()Workshop drawing

3. Specification

4. Bill of Quantity

m3

4,000

2.5

10,000

5. Contract conditions

:
)(General Conditions
)(Supplementary Conditions

) (Claims
)(Change orders

6. Letter of offer/Proposal/Bid form

:



:
/

.
.

)(Estimating process

.

Tender Price:
Direct cost

= Material+ Labor+ Equipment+ Subcontractor

) Indirect cost (site-overhead

(
)........
General- overhead
(

).................
Profit & Risk

 Senior Managers
:

.


.
:
.1
.
.2 ).(Balanced Bid
.3 )(Unbalanced Bid
.

Profit and Risk

General Overhead
Profit and Risk

Net Cost

Tender Price

General Overhead

Indirect Cost

Construction
Cost

Indirect Cost

Direct Cost
Tender Price

Direct Cost

Construction
Cost

Tender price = Direct cost + Indirect cost +

General- overhead + Profit & Risk
Alternative Structures of Tender Price

Markup


Performance bond

( )

Performance bond Payment bond

Bid bond


.
:
Letter of Offer
) Bill of Quantity (BOQ
:

Item

Unit

Quantity

1
2
3
4
5

m3
m3
m3
m3
L.S.

150
180
40
60
job

Direct cost
Material Equipment
1000
11200
1800
1000
960
400
1200
600
-

Site overhead =10 % D.C.

General overhead =5 % construction cost
Profit risk
=5 % net cost

labor
4000
4000
3200
4800
-

S/C
2000

Item
1
2
3
4
5

Unit Quantity
m3
m3
m3
m3
L.S.

150
180
40
60
job

Direct cost
Material Equipment
1000
11200
1800
1000
960
400
1200
600
-

labor
4000
4000
3200
4800
-

S/C
2000

Item
DC
16200
6800
4560
6000

2000
35560

Total Direct Cost= LE 35,560

Construction Cost= 1.05 * TDC
Net Cost= 1.05 * CC = 1.05 * 1.05 * TDC
Tender price=1.10 * NC=1.10*1.05*1.05* TDC
Tender price=1.21275 * TDC = L.E. 43,125.4

Price Factor
= 1.21275

Item

1
2
3
4
5
Total

/ Quantity

Balanced item price

Total
Unit
130.98
16,200 19646.5
6,800
8246.7
45.82
4,560
5530.1
138.25
6,000
7276.5
121.28
2,000
2425.5
2425.5
35,560 43125.4

Item D.C.

- 400
+ 400

Unbalanced item price

Total
Unit
200465
8246.7
5530.1
7276.5
2025.5
43125.4

Questions?

24