Tender

Tender

An offer in writing for executing certain specified work or

supplying specified materials, on certain terms and
conditions, like rates, time limit etc.

• ADVANTAGE TO THE OWNER

- CHOOSE SUITABLE CONTRACTOR FOR EXECUTION OF
PARTICULAR WORK
Types of Clients

SEMIPUBLIC
ORGANIZATIONS
PRIVATE OR
such as Trusts,
INDIVIDUAL OWNER
Institutions, Banks,
Etc.

PUBLIC BODIES
such as Govt.
Depts., Zila
Parishads, Ltd.
Companies, etc.
 Qualities of good tender
• Should be based upon DEFINITE and DETAILED

information
• Drawings to be supplied wherever details are
involved
• Factory made products should be supplied with
their trade names
• Avoid the phrase “As Approved by the Architect”
• Mention “BASIC PRICE OF THE MATERIAL” when
trade name cant be given
• All tenderers shall be given equal and same
information
Types of Tender
ITEM RATE
TENDER

LUMPSUM
TENDER

COST + PERCENTAGE
TENDER

LABOUR TENDER

TENDER FOR
DEMOLITION WORK
 ITEM RATE TENDER
╬ Work based on the rates of various items of work.

╬ Tender form contains Bill of Quantities.

╬ All items of work are described with their quantities.

╬ Quantities given are approximate and not binding on the owner.

╬ Contractor is required to fill in the rates of each and every item both in

figure and alphabet.

╬ The measurements of the work done are recorded and contractors bill

is prepared by working out quantities from the measurements taken

and amount of bill is worked out by multiplying the rates.

╬ It is suitable for all types of civil works like buildings, roads, bridges etc
 LUMPSUM TENDER
╬ Work based on the rates of various items of work.

╬ Tender form contains Bill of Quantities.

╬ All items of work are described with their quantities.

╬ Quantities given are approximate and not binding on the owner.

╬ Contractor is required to fill in the rates of each and every item both in

figure and alphabet.

╬ The measurements of the work done are recorded and contractors bill

is prepared by working out quantities from the measurements taken

and amount of bill is worked out by multiplying the rates.

╬ It is suitable for all types of civil works like buildings, roads, bridges etc
Methods of Inviting Tenders

•PRIVATLY INVITED TENDER

•PUBLIC TENDER
•PRE-REGISTRATION OF CONTRACTORS
Tender Document
LETTER OF OFFER
GENERAL
CONDITIONS &
SPECIAL
REQUIREMENTS OF
WORKS
SPECIFICATIONS OF
WORKS AND
MATERIALS

BILL OF QUANTITIES

DRAWINGS
ARTICLES OF
AGREEMENT &
GENERAL CONDITIONS
OF CONTRACT
 Earnest Money Deposit [EMD]
╬ Initial Deposit enclosed with Tender
╬ Payment shows contractor’s interest in work.
╬ Amount of EMD - 1% of Estimate Amount.
╬ Main intension/purpose – to see fair competition takes place.
╬ Paid by Demand Draft payable at the place of Employing Agency/
Owner. Also accepted in cash.
╬ Remains with Employer/Owner till contractor is selected, sometimes
this period is extended till work is awarded.
╬ EMD of selected contractor is converted into Security Deposit or
adjusted towards Security Deposit.
╬ EMD of contractor’s whose offer/Tender is not accepted should be
returned.
╬ Does not bear any interest
 Security Deposit
╬ PURPOSE
a) Contractor fulfills all terms and conditions of contract.
b) Carries work to entire satisfaction
c) Maintain expected progress of work.
╬ 5% (Five Percent) of estimated amount
╬ Asked and to be Paid by Successful contractor
╬ Paid by Cash, Fixed Deposit Receipts. Also divided into instalments.
First installment - before entering into contract
Further installments - deducted from every Running Bill.
 Security Deposit
╬ Forfeited - If contractor fails to comply all the conditions
╬ Does not bear any interest
╬ To be returned to the contractor after defects liability period is over.

╬ If provision of deduction of Retention Money is made in Tender then

Security Amount is returned along with Final Bill.

╬ If contractor does not attend and cures defects, then work is done
through any other suitable agency and amount incurred is deducted
from contractor’s Security Deposit and balance amount is returned.

╬ Normally such expenditure is not more than Security Deposit. If it is so

then contractor shall pay owner such excess amount.
Comparative statement of Types of
Tenders/Difference/Characteristics
ITEM RATE
1. Balanced, No undue profits,
advantage to
owner/employer. No undue
loss to Contractor
LUMP SUM
Imbalanced : resulting into
excessive profit
disadvantage to
owner/employer : excessive
loss to contractor
COST PLUS PERCENTAGE
Final cost is known on
completion, possibility of more
cost than estimated. Control
over expenditure necessary.

2. Work is commenced after Work cannot be started all Work can be commenced
completing formalities, formalities like finalisation immediately without waiting for
invitation and acceptance of of cost, acceptance of all formalities
Tender Tender and agreement

3. All plans, specifications,
schedule of items are
prepared before inviting
Tender. Elevations and details
can be issued during the
progress of work.
All details, plans, elevations, All details, elevations, sections
sections, specifications need not be ready prior to
schedule of items are commencement of work.
prepared before inviting
tenders.
Comparative statement of Types of Tenders/
Difference/Characteristics
ITEM RATE LUMP SUM COST PLUS PERCENTAGE
4. Quality of materials and good Quality of materials and Standard quality of materials
workmanship assured good workmanship cannot and good workmanship at the
be assured cost of Owner/ economy

5. Possibility of Extra/ additional Possibility of Extra/ Possibility of Extra/ additional

work is less additional work is more work is more

6. Final cost of work is not known Final cost of work is known Final/Total cost of work is not
before completion of work before commencement of known in advance
work

7. Variation in drawing/ design Variation requires Variations can be made but if

can be made if required since considerable thinking since not controlled may increase
final bill/ settlement is based exorbitant claims made by cost than predicted
on measurement of work done the contractor for extra
work.
Comparative statement of Types of Tenders/
Difference/Characteristics
ITEM RATE LUMP SUM COST PLUS PERCENTAGE
8. Necessary essential variations Design is affected since Variations can be made so that
can be done so that design is restrictions on variations design is not affected
not affected

9. Time limit for completion of Time limit for No time limit for the completion
work is strictly adhered completion of work of work
strictly enforced

10. Scope for selection of Scope for selection of Scope for selection of contractor
contractor is wide contractor is less is wide

11. Cost of completed project is Cost of project is Cost of completed project is not
guaranteed if variations are guaranteed if proper guaranteed
limited control over variations
Comparative statement of Types of Tenders/
Difference/Characteristics

ITEM RATE LUMP SUM COST PLUS PERCENTAGE

12. Trade discounts, rebates, Trade discounts, rebates, Trade discounts, rebates, refunds
refunds, are taken into refunds, are taken into etc. are likely to be taken away
consideration before filling account before filling the by the contractor and no
the tender tender benefits of the same are given to
the owner

13. Economy in purchase of Extreme economy in No necessity of economy in

materials and employment purchase of materials and purchase of materials and
of labour is done by the employment of labour is employment of labour, since this
contractor. Owner does done by contractor. is paid by owner. Chances of
not get advantage of this Possibility of falls bills of more amount
inferior/lower submitted by contractor
specifications and inferior
workmanship
Comparative statement of Types of Tenders/
Difference/Characteristics

ITEM RATE LUMP SUM COST PLUS PERCENTAGE

14. Contractor tries to Contractor completes work Contractor may not be particular
complete the work before before scheduled time to complete work within
date of completion limit, he gets good profit stipulated time period. Time
margin period for completion of work is
flexible

15. More work load for Work load of Architect and Architect’s and engineers work
architect and engineer. engineer is reduced load is reduced. However
Measurements of all items considerably since owner’s work is increased.
are required to be measurements are not to Owner has to bear loss and
recorded. Contractor is be recorded. Contractor is wastage of materials from site
responsible for loss and responsible for loss and
wastage of materials from wastage of materials from
site site