❑ An invitation to bid for a project.

❑ The main objective of the Tendering Process in

Construction is to eliminate favoritism and corruption in
awarding works to construction companies.
INDEX
1. Introduction, definition and tender types
2. Tendering procedures: tender document preparation, types of invitations
(public notice, private invitation and negotiation), floating of tender, opening
and award of tender.
3. Aspects of tender: units of measurements and mode of measurements,
specifications of raw materials, schedule writing.
4. Content of tender documents: undertaking from the contractor,
prequalification of tender, general and special conditions of tender, bill of
quantities, general specifications, material specifications, special specifications,
set of working drawings.
5. Contractual procedures : work order letter and acceptance letter, interim bills
and final bills, bill certifications.
 Introduction
› It is an invitation from the owner to the contractor to execute some work at a
specified cost at a specified time.

› It is published in the form of tender notice in newspapers, notice boards, etc.

according to the cost of works.

› With the help of the tender, the client can compare different prices quoted by
various contractors for work.

› It is always the low price and an experienced contractor wins the tender. The
tendering process in construction plays an important role in the selection of the
cheapest and most quality bidder for work.
 Characteristics of Tenders
Some of the most important characteristics of tenders are listed below

› All potential contractors and suppliers must submit their bids within the deadline
decided by the client.

› The bid (tender papers) must include all the required and relevant details about
the materials to be used, the expected cost of the project, etc.

› After the deadline has passed, all bids are evaluated by the client based on a
set of predetermined criteria such as price and quality.
› The process of tendering starts with an invitation to tender or a request for tender
(RTF).

› It ends with the public evaluation process and followed by which one of the firms
that submitted a tender wins the project or contract.

› Before they are floated by the client, tenders are generally advertised in different
local media and newspapers, to allow all interested contractors an opportunity
to bid for the project.
Advantages of Tendering In
Construction
The following are some Advantages of Tendering In Construction,

1. No Nepotism
Tenders or bids are evaluated based on certain predetermined criteria, such
as price, quality, and value for money.
In other words, the agency which offers the best quality product or service at the
lowest price point would win the contract or tender.

2. Value for Money

For the client, tenders give the greatest value for the amount of money
spent. This is because the client can choose potential contractors to select the ones
that can produce the highest quality product or service at the lowest price point.
This allows the government or company to save money without having to
compromise on quality.
3. Encourages Competition

The process of tendering helps to promote a competitive market. This is

because several potential contractors, firms, or suppliers get a chance to bid for
every project.

And because selection depends on quality and price, every bidder tries to
reduce operational costs and labor costs as much as possible to lower expenses
and improve quality.

This entire process encourages healthy competition in the market and

prevents laziness and provides a boost to innovation and new ideas.
4. Easier Entry for New Firm

The system of tendering makes it possible and simpler for new firms to enter
the market or even a particular industry.

This is because contracts under these systems are awarded based on

predetermined, objective criteria.

This process helps new firms to quickly get a foothold in the market or
industry, thus significantly lowering the traditional barriers to entry.
Types of Tender In Construction
Which type of tendering process in construction the employer wants to
choose depends on the nature of the contract, the complexity of the
construction, the expertise needed, and other several reasons.

The following major Tender types are used in construction:

1. Open Tender
2. Selective Tender
3. Negotiation Tender
1. Open Tender
Open tendering allows everyone to submit a tender to supply the material
or provide services that are required in construction.

Open tendering performs in both the private and government sectors.

The government or client advertises the tender offer in the local newspaper
and media giving detailed and key information about the proposed works and
inviting interested contractors to tender.

Open tendering provides great competition among various contractors.

Advantages of Open Tender
• It allows any interested contractor to tender. Therefore it allows an unknown
contractor to compete for the work.
• Allowing the tender list to be made without bias. The client will obtain the bargain
possible.
• No favoritism in selecting contractors.
• Ensuring good competition & obliged to accept any offers.
• It is a traditional method of tendering and is familiar to all sectors of the
engineering and construction industry.

Disadvantages of Open Tender

• The tender list can be long as too many contractors tendering for the job.
• Uneconomic use of the source.
• Public accountability may be questioned if the lowest offer is not accepted.
2. Selective Tender
The selective tendering process in construction is the one alternative developed to
address the limitations of the open tendering procedure.

In this method, a shortlist of contractors is drawn up and they are invited to submit
tenders. The purpose of the selective tendering process in construction is to improve the
quality of the bids received.
Advantages :
• It reduced the cost of tendering and the Economic use of resources.
• Reduce tender documentation.
• Shorter tender periods.
• Better management of the tender process.
• Only the competent contractors were invited to tender, then the lowest can be
accepted.

Disadvantages:
• Reduces the availability of work for other contractors, especially new contractors.
• Tender Prices may be higher than would have been in open tendering.
• Greater chance of collusion.
• Favoritisms may occur in the shortlisting.
• The tendering period is longer because it involved two distinct stages.
3. Negotiation Tender
The negotiation tendering process in construction is mostly used in the engineering
and construction industry commencing from tendering till dispute resolutions, i.e.
Under the pre-contract negotiations & post-contract negotiations. Usually with a single
contractor but may be up to three contractors.
The negotiation process involves are as follows:
• Identification by the employer of a suitable contractor to negotiate with.
• The contractor can be selected either from the employer’s list of preferences or on the
advice of the professional team.
• The contractor is apprised of the work scope. Negotiations can be applied to the
following type of contract.
• In this type of tendering process in construction, the employer has a long-term business
relationship with the contractor.
• Where the contractor is involved in the financing of the project.
• Where there is a pressing need to have a very early start of work on the site and to
complete the works on a fast track basis.
Advantages :
• This type of tendering process in construction reduces the risk of failure.
• The best alternatives for the employer to adopt are special circumstances such as
emergencies, security reasons, etc.
• Early Commencement of work on site. It decreases the period involved in appointing the
contractor for any tendering work.
• The Contractor can contribute his expertise during the design stage.

Disadvantages:
• The cost of work is likely higher than competitive tender.
• Reduces the availability of work for other contractors.
Tendering Process In Construction

The tendering process in construction includes the following stages:

1.Pre-tender Stage

2.Tender Advertisement Stage

3.Closing of Tender

4.Tender Opening Process

5.Tender Evaluation Process

6.Tender Award
1. Pre-tender Stage
• At the pre-tender stage, when the clients have an idea, the client will appoint a
consultant to discuss further the project.

• The consultant will do their job, advising, managing the tender and contract, and also
transferring the idea into the drawing.

• At this stage, the client and consultants will be brainstorming about the scope, time to
complete, and budget.

• The pre-tender stage is the most crucial matter because it will initiate the next step of a
project. If the pre-tender stage is failed, the project will not be complete.
2. Tender Advertisement Stage
The tender advertisement is also called tender notice. The conventional tender
notice will advertise in the local newspaper.
In the tender notice, the basic requirement that should be appearing are:
• Title of the project.
• Class of contractor, head, and subhead needed.
• Location, date, and time to obtain the tender document.
• Fees for tender documents.
• Location, date, and time for submission of tender doc.
3. Closing of Tender
The tender notice will mention the time and date of the tender closing process. If the
contractors fail to submit their bids within a specific time and date, it considers the
contractors’ refusal to bid for the tender. At that time also the tender validity period is
started.

At this stage, contractors can withdraw back their tender papers if they are no more
interested to fight for the tender. Consultants use this period to make assessments and
evaluations of each of the offers.
4. Tender Opening and
Evaluation Process
Quantity surveyors usually will handle the tender opening process. To ensure the
integrity of the competitive process.
The evaluation of proposals must be undertaken objectively, consistently & without
bias toward particular suppliers.
Tenders are generally evaluated against a pre-determined set of criteria. The
evaluation of the tenders shall be prepared the soonest as possible after the tender opening.
A report prepared by the Quantity Surveyor will describe the findings of the said
evaluation and it will be supported by tables and graphs.
In the end, the Quantity Surveyor will recommend which tenderer, in his opinion, is
the most suitable to undertake to execute the project.
5. Tender Award
An evaluation team will examine each tender received and make
recommendations as to which tender represents the best value for money.
Once the contract has been finalized and work has been awarded, both the
successful and unsuccessful tenderers will be notified.
Once the final decision has been made on the tender award to the particular
contractor, the tender administrator creates the tender results notification which is in letter
form and then sent to all participating contractors.
Once the client or government accepts a tender, it is binding on both parties. This
means that the agency or company that won the tender has to provide the goods or
services in the manner agreed to and at the price offered, and the client/government must
pay the agreed price at the agreed time. The tendering process in construction is complete
with tender awarding.
 Tender Document
1. COMPOSITION OF TENDER DOCUMENTS
The Tender Documents are composed of the following:

1. Instructions to Tenderers
2. Forms
3. Conditions of Contract
4. Particular Conditions
5. Form of Tender
6. Tendering Data and Contract Data
7. Specifications
8. Bill of Quantities
9. Drawings

The documents are to be taken as mutually explanatory of one another. If an

ambiguity or discrepancy is found in the documents, it shall be interpreted in accordance
with the above-mentioned sequence as an order of priority.
2. ISSUANCE OF TENDER DOCUMENTS
Tender Documents shall be issued at the address given.

3. RESPONSIBILITY OF TENDERERS
❑ Tenderers shall have a responsibility to carry out the Works under the “Design and Build
Contracts” basis.
❑ Tenderers shall examine carefully the Tender Documents to understand fully the content
of the Work including the amounts and any difficulties or restrictions that may affect the
execution and completion of the Work.
❑ Tenderers shall be liable for any failure or negligence to obtain reliable and necessary
information for successful execution or completion of the Work.
4. CLARIFICATION OF TENDER DOCUMENTS

❑ Any inquiries on the Tender Document or any doubts as to its interpretation shall be
written in English and sent to the Consultant by facsimile on or before time on the ___ day
of (month) in year.

❑ The Employer shall respond in writing to the inquiry and/or doubt on interpretation. The
responses will be sent to all prospective Tenderers who purchased the Tender Documents.

❑ All prospective Tenderers shall send to the Consultant for the confirmation of the receipt.

❑ The responses shall constitute a part of the Tender Documents

5. ADDENDA OF TENDER DOCUMENTS

❑ The Consultant may, for any reason, whether at his own initiative or in response to a
clarification requested by Tenderers, modify the Tender Documents.

❑ The Employer will notify in English all prospective Tenderers ,any addenda indicating such
modification on or before the ___day of (month),in year , i.e., at least 6 calendar days
before the day of Tender opening.

❑ The prospective Tenderers shall send the confirmation of receiving the addenda stated
above to the Consultant by facsimile.

❑ The addenda shall constitute a part of the Tender Documents.