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Q.S App. Advanced-Tender

Q.S App. Advanced-Tender

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Published by: Mohammed Abdul Khadar on Sep 08, 2010
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01/16/2011

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ADVANCED QUANTITY SURVEYING APPLICATION

TENDER PROCESS TENDER DOCUMENTATION SESSION 3 PROF CHITRA WEDDIKKARA FRICS AAIQS FIQS ARAIA FIA(SL) NOVEMBER 2006

TENDERING PROCESS
Tendering Process ‡ Is the process by which a client/employer procures a building project. A Tender ‡ A tender is the final price or µoffer¶ which is submitted to the client by the contractor and is a sum of money for which he is prepared to carry out the work and will include not only the estimate but also the a margin of overheads and profit
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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 the net cost of carrying out a specified amount of building work ‡ Where as Tender is the final price or µoffer¶ made to the Employer by the contractor and is the sum of money for which he is prepared to carry out the work and not only includes the µestimate¶ but also the margin of profit and overheads
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FUNCTIONS OF AN ESTIMATOR
The Estimator:
‡ ‡ ‡ ‡ ‡ ‡ ‡ The person in the contractor¶s organization responsible for the preparation of prices 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 in attempting to assess the extent of likely future costs Should have through working knowledge of many aspects of the construction industry 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 contract documentation and forms of contract
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TENDER DOCUMENTATION & TENDERERS SELECTION
Tender documents THE 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

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DECISION TO TENDER
Decision to tender ‡ The contractor¶s estimating capabilities are scarce resource ‡ Producing of tenders cost money ‡ Great care must be taken before committing to the costly estimating operation Criteria influencing the decision to accept or reject an invitation to tender

‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡

Genuineness of the invitation The nature, the size and complexity of work Three year continuous job may be tempting but with limited resource 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?

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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 degree of accuracy Firm or fluctuating price required Contractor may not be ready to accept the risk or pricing firm price contracts Only interested in a fluctuating price basis
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Criteria influencing the decision to accept or reject an invitation to tender
‡ Large degree of risk in attempting to predict what inflation is likely to be 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 the project
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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 contractor¶s 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)

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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

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THE DECISION TO TENDER
‡ All above information must be recorded by the estimator and submitted to the management to discuss the possibility of submitting the tender. If after due deliberations the management decides to tender then the acceptance to the invitation to tender must be submitted to the architect for the dispatch of the tender documents
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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

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Collection of information to prepare the tender
‡ Enquiries to suppliers must be on standard printed forms to be sent 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

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Collection of information to prepare 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

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Documents Forming a Tender document
1. 2. 3.
‡ ‡ ‡ ‡ ‡ ‡

Invitation for bids Instruction to Bidders Standard forms
Bid security Letter of acceptance Agreement Performance security Advance payment Security Retention Money guarantee

4. 5. 6. 7. 8. 9. 10.

Conditions of contract Form of Bid and qualifications Specifications Drawings Schedules Bills of quantities Any other document listed in the contract agreement
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SUBMISSION OF TENDER
‡ Tender prepared by the estimator must be submitted to the commercial manager for adding of overhead and profit margin of the company ‡ The conversion of the estimate into tender is undertaken by the management at an adjudication meeting where aspects other than pure cost are considered ‡ Necessary covering letter prepared and including all relevant documents pertaining to the tender must be packaged for submission ‡ The tender document must be submitted at the stipulated time
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TENDER EVALUATION
‡ Tenders submitted by the various contractors are checked for the conformity and any qualifications ‡ Arithmetical checks must be carried out to check the accuracy of the submission ‡ Evaluation report is prepared by the consultants on the reasonable and the cost effective offer which is in conformity with the specifications etc ‡ Recommendation is made by the consultants to the suitability and the choice of the tender for the project
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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
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Ethics in the tender process
INTERNATIOAL CODE OF TENDERING IS BASED ON TEN ETHICAL PRINCIPLES

‡ Tendering at all levels conducted honestly ‡ Parties must conform to all legislative obligations including those required by Trade practices and consumer Affairs laws ‡ Parties should not seek and submit tenders without a firm intention to proceed ‡ Parties should not be engaged in any practice which gives one party an improper advantage over the other

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Ethics in the tender process
‡ Parties should not be engaged practices such as collusion on tenders, 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 any particular project ‡ Tender documents must specify the clients requirements and indicate 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 is known to the party
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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
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Discussion questions
Select 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

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