Professional Practice

MODULE - 2

Bishop Jerome School of Architecture Professional Practice Ar. Sreya Vaidyan

Contents:

• Tenders: Types of tenders

• Tender Notice, Inviting, Work order

• Tender document, Tender acceptance, Tender for demolition work

• Earnest money deposit, Security deposit, Retention amount

Bishop Jerome School of Architecture Professional Practice Ar. Sreya Vaidyan

Tenders

Tender in simpler terms is a process where a government or a private

entity invites another organization, company or entity to work for them.

The entity will post the work related details either on their website or on
the local and national newspapers and people or organization interested to
work for them will bid on the work with their quotes.

• Whichever organization is found suitable for the work based on the bidding price, days of
completion and quality will be allotted the tender.

Organizations or people who take regular tenders are more interested in

bidding for government tenders in India as the safety of payment is always
a big factor which is not a problem when it comes to government entities.

• In other words, tenders are the RFPs for inviting bids for a particular work and when the bidding
process completes, work is allocated to the suitable organization.
Source: https://etenders.gov.in/eprocure/app
Bishop Jerome School of Architecture Professional Practice Ar. Sreya Vaidyan
Purpose of Tenders

2
1

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To get the best value To ensure valuable
for money through contracts are awarded
healthy competition. in a way that is fair and
unbiased.
To minimize risk by
using a rigorous
screening process.

Bishop Jerome School of Architecture Professional Practice Ar. Sreya Vaidyan

Types of Tenders

Based On Inviting Method Based On Quoting Method

• Open Tender • Item Rate Tender

• Limited Tender • Schedule Of Rates With % Up &
• Negotiated Tender Down
• Balanced And Unbalanced • Lump sum Tender
Tender • Lump sum Plus % Tender
• Cost Plus % Tender
• Labour Tender
• Tender For Demolition Work

Bishop Jerome School of Architecture Professional Practice Ar. Sreya Vaidyan

Types of Tenders: Based On Inviting Method
Open Tender/ Open to all eligible contractors.
Public Tender Type Of Work : Public Works
• Most transparent type of tendering
• Invited by publishing a tender notice in a newspaper or any other social media.
• Healthy competition exists among the contractor in the open tendering process.

Limited / Selective Tender

A short list of contractors is drawn up and they are invited to submit tenders.
• Reputed and experienced contractors invited.
• Degree of competition is less.
• The purpose of this tender is to improve the quality of bids received to ensure that the contractors with necessary experience are
given a chance to submit the necessary bids for the specific reason of the employer.
• This makes the e-tendering process in India more manageable and less burden for the parties involved.

Negotiated / Single Tender A negotiated tender is effectively a single-stage tender carried out between the client and just
one contractor.
• The benefit of this route is the speed with which a price can be obtained for the proposed works.
• However, the competitive advantage of a formal bidding process is reduced and the client could end up paying more for a quicker
start on site, albeit with a contractor of their choice.
• Also, many public bodies and government departments will not allow negotiated tenders except in exceptional circumstances, as it
is difficult to prove that value for money has been achieved or that favoritism has been avoided.

Bishop Jerome School of Architecture Professional Practice Ar. Sreya Vaidyan

Types of Tenders

Balanced Tender

• Rates quoted by contractors same as schedule rates (DSR) of that year.

• Mostly balanced tenders are preferred by the department.

Unbalanced Tender

• If the rates quoted by contractors are varying much with the rates quoted in DSR.
• By doing so the contractor can earn more amount of money at initial stages and that earned money can be utilized for carrying out
further items of work.
• Unbalanced bidding is where a bidder places a high price on some items and a low price on other items in a unit price contract.

Bishop Jerome School of Architecture Professional Practice Ar. Sreya Vaidyan

Types of Tenders: Based On Quoting Method

Item Rate Tender Offer based on rates of different items of work.

• Items of work are fully described with their quantities.

• Contractor is supposed to fill rates in tender form.
• Payment to contractor: based on measurement of work executed at the rates quoted by him in tender.
• Balanced method of execution. Minimized chances of extra work.
• Reasonable variation in plan and in quantities during execution of work.
• Types of work -buildings, bridges, sewer lines , road etc.

Schedule of Rates
With Percentage Up & Down Modified form of item rate tender.

• In this case, bill of quantities are duly priced.

• Tenderers has to quote only the % above or below the priced schedule.
• Type of work : new buildings as well as maintenance work

Bishop Jerome School of Architecture Professional Practice Ar. Sreya Vaidyan

Types of Tenders: Based On Quoting Method
Lump sum Tender

• The contractor undertakes, to carry out the work as shown in the plans and described in the specification, supplying all the
materials and labours for fixed lump sum or a fixed rate per cubic or square meter of work.
• The contractor will be paid time to time if specified in the contract and if not specified, full amount at the time of completion of
work.
• This type of works suitable for all building works, laying of main sewers, general drainage and plumbing, electrical installation
works, road works, etc.
Lump-sum Plus Percentage
Tender
• Reputed and experienced contractors invited.
• Degree of competition is less.
• The purpose of this tender is to improve the quality of bids received to ensure that the contractors with necessary experience are
given a chance to submit the necessary bids for the specific reason of the employer.
• This makes the e-tendering process in India more manageable and less burden for the parties involved.

Cost Plus Percentage Tender

• In addition to amount agreed he paid a certain percent of his profit for his professional services.
• Fee is fixed at a certain percentage of the cost of work.

Bishop Jerome School of Architecture Professional Practice Ar. Sreya Vaidyan

Types of Tenders: Based On Quoting Method

Labour Tender

• Contractor agrees to carry out the complete labor work based on rate quoted by him.
• Contractor has to supply all tools and planks ,scaffolding, centering materials, nails etc and owner supplies only the material
required. Contractor is responsible for level and setting out of the work.
• Owner has to keep a close watch on the material quality and workmanship.

Demolition Tender

• Tender called for demolition of existing building up to ground floor and removal of all materials including the debris.
• Tender usually takes away all the materials that are there in old buildings and in turn they pays specified amount to owner.
• Highest and not the lowest tender should be approved.
• Whole of tender amount should be taken in advance before the position of the building is given for demolition.
• Contractor should be asked to take out insurance for accidents, workman’s compensation and other.
• Contractor has to make necessary arrangements for cutting of existing water supply, drainage, electric supply etc.

Bishop Jerome School of Architecture Professional Practice Ar. Sreya Vaidyan

Stage Involved In Finalizing Tender

Announcement Of Tender-
Tender Notice

Submission Of Tender

Opening Of Tender

Tender Scrutiny

Rate Analysis

Scrutiny Report

Work Order

Bishop Jerome School of Architecture Professional Practice Ar. Sreya Vaidyan

Tendering Process

Swimlane Diagram
Rectangle Shape - Represents a process
Oval or Pill Shape - Represents the start or end
Diamond Shape - Represents a decision
Parallelogram - Represents input/output

Bishop Jerome School of Architecture Professional Practice Ar. Sreya Vaidyan

Inviting to a Tender
There are three ways in which tender can be called for, based on the type and nature of work.
That is, private work, or a public work, a new work or work of additions and alterations.

Private Invitation Public Notice Negotiations

• The architects and engineers
maintain a panel of contractors and
from the panel a few are invited to
quote for a particular work .
• In such a case the architect knows
the contractor, together with his
intelligence, integrity and financial
stability.
• Thus preventing inexperienced
person entering into contract line.
• This is suitable for private works.
• All public works are required to be
advertised in the news papers, and
any contractor can be quote for the
work.
• Chances of getting the work in
cheaper rate.
• The work is generally given to the
contractor quoting the lowest
amount.
• A single-stage tender carried out
between the client and just one
contractor.
• Inviting one contractor of their
choice to submit a tender response
for the project.
• This is then negotiated with the
client’s professional team (usually
the client’s cost consultant).
• Suitable for private works of small
magnitude or repair works,
additions and alterations work.

Bishop Jerome School of Architecture Professional Practice Ar. Sreya Vaidyan

Pre-requisites For Tendering
Clear site free from all legal or physical obstacles.

• Adequate fund
• As per demand procurement of materials should take place.
• Finalization of designs and working drawing.

Statuary clearances to commence the work.

• Essential infrastructure at the site.

• Completion of pre- contract activities.
• Free accessibility to site (for inspection & later).
• Problems in site should be mentioned clearly as part of tender document

Bishop Jerome School of Architecture Professional Practice Ar. Sreya Vaidyan

Tender Notice

Source: https://etenders.kerala.gov.in/nicgep/app
Bishop Jerome School of Architecture Professional Practice Ar. Sreya Vaidyan
Tender Notice
Characteristics

• Clear and brief • Documents for obtaining blank tender documents

• Name of owner • Eligibility criteria for tendering

• Site address and building type • Last date for receipt of application for issue of blank

• Work brief tender documents

• Type of tender • Place and period of issue of tender documents

• Estimated cost • Last date for receipt of tenders & place of submission

• Earnest money deposit • Cost of tender documents

• Period of completion • Date, time, & place of opening of tenders

Bishop Jerome School of Architecture Professional Practice Ar. Sreya Vaidyan

Opening of a Tender
The tenders should be opened in the presence of the owner or the committee members.

• A list of the tenders along with tender deposit should be recorded.

If the owner does not remain present , the tender should be opened by architect also use the service of
his staff to assist him.

• This is a letter for contractor by architects, engineers and surveyors, in behalf of owner, to inform him that
the client has accepted tender and appointment of contractor is confirmed.

The lowest tender should as far as possible be accepted depending upon the reputation and standing of
the contractor.

• The practice of receiving and opening of the tenders by the client should always be discouraged.

The tender deposit and such other amounts should be deposited in a separate account of the firm

• The architect should be scrutinize the same , prepare his finding and forward the same to his client with his
recommendation as to whom the work awarded and why.

Bishop Jerome School of Architecture Professional Practice Ar. Sreya Vaidyan

Work Order
• The letter also shows date of commencement of work and reference of tender submitted by
contractor
• This is a part of contract document.

Tender Acceptance
• A Letter by architects to contractor.
• Before accepting, written confirmation from his client is required.
• Made clear to contractor that the tender is accepted subjected to conditions that he will sign
necessary contract for the same with the owner.
• Once accepted he cannot withdraw from the same.

Bishop Jerome School of Architecture Professional Practice Ar. Sreya Vaidyan

Essential Aspects Before Selecting A Contractor
• Contractors financial stability depending upon estimated cost of proposed work
• Intelligence, capacity to organize and credit in market.
• Previous works executed and certificates to that effect from the previous architects
• Works at present in hand
• General behavior and temperament

Special Features For Acceptance

• Acceptance within prescribed time limit.
• No such time limit then within reasonable time.
• Tender must be accepted as an absolute without making any counter offer as otherwise the original
offer does not stand.
• Contractor can alter or withdraw tender at any time before acceptance and he will forfeit his
deposit in case of withdrawal.
Bishop Jerome School of Architecture Professional Practice Ar. Sreya Vaidyan
Tender Document
Instructions To Contractor

• Type of tender
• Name of work, address and owners name
• Availability of site
• Price of blank tender form
• Amount of EMD
• Time and place of tender submission
• Advice to tenderers to inspect the site
• Validity of tenders

Bishop Jerome School of Architecture Professional Practice Ar. Sreya Vaidyan

Tender Document
General Conditions And Preliminaries

• Basic rate of building materials and list of approved manufacturers of materials

Letter of offer

• From contractor to architects office

• Letter is prescribed by architect’s office

Copy of articles of agreement and general conditions of contracts

• Printed papers available with IIA

Drawings

• Copies of drawings

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Earnest Money Deposit
• It is a guarantee for due performance of contract.

• Amount paid along with tender.

• Retained in Architect’s office without payable interest.

• Normally 2-2.5% of estimated cost

• For large projects:1% of estimated cost

• Mode: in cash, bank guarantee etc.

Bishop Jerome School of Architecture Professional Practice Ar. Sreya Vaidyan

Forfeiture Of EMD :
• Tenderer fails to commence-earnest money along with performance guarantee is forfeited.

• If tenderer withdraws before validity period or if makes any modifications in terms & conditions
which are not acceptable by the owner(50% of earnest money)

• If successful tenderer fails to furnish security deposit then the earnest money is forfeited.

Refund Of Earnest Money :

• Earnest money of successful tenderer can be adjusted against the security deposit required to be
furnished by him.

• Of Unsuccessful tenderer is returned after the expiry of validity period or after the award of
contract

Bishop Jerome School of Architecture Professional Practice Ar. Sreya Vaidyan

Security Deposit
• Check or safeguard for owner to ensure that contractor fulfills all terms and conditions of contract.

• Rate: 2-5% of estimated cost

• Mode: Cash, Fixed Deposit etc.

• Forfeiture: In full or in parts

Refund:

 Completion of work after expiry of defect liability period

 On obtaining labor clearance certificate

 On finalization of final bills and work accounts

Bishop Jerome School of Architecture Professional Practice Ar. Sreya Vaidyan

Retention Amount
As a guarantee for owner when any claim ( any defects) arises against contractor.

• Engineer in charge withhold the amount from security deposit in claim against contractor.

If security deposit is insufficient, this amount is deducted from the running bill.

• Not a compulsory amount and very rarely arise out of contract.

It has no relation with tendered amount.

• This has no relation with maintenance period and can only be released after finalization or adjustment of claim.

Mode: Cash, Fixed Deposit, etc. 50 % of the said amount is paid after the virtual completion
of the work

• Final installment of 50% is paid after the defect liability period has passed and after issue of final certificate by architect

Bishop Jerome School of Architecture Professional Practice Ar. Sreya Vaidyan