5/21/2023

BACHELOR OF THE SCIENCE OF ENGINEERING IN CIVIL

ENGINEERING

SESSION 03

TENDERING

By
Ch. QS. Gayan Fernando
Chartered Quantity Surveyor/ Lecturer
B.Sc. (Hons) in QS, LLB (Hons)
M.Sc. in CL&DS, Dip. in Arb., AIQSSL.

TENDERING - WHY
• After a client has selected an appropriate
procurement strategy, the next stage will be a
review of how best to obtain the resources to have
the work carried out.
• The client will identify and contact suitable
personnel or organizations and agree with them the
scope and nature of their work or the resources to
be supplied and the basis of payment
• This will be achieved through a process of
tendering
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TENDERING - WHY
• A wrong choice may lead to an unhappy
client/contractor relationship, a dissatisfied client
and possibly even an insolvent contractor
• Any one contractor will not be suitable for one job
• Purpose of tendering is to select the most
competent source with the most realistic price

TYPES OF TENDERING
• Competition (Open/ Selective), Nomination
• Serial
• One envelop/ Two envelop
• With/ without pre-qualification
• Multi stage

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OPEN TENDERING
• Closely embraces the free market competition
• Increase in competition and leads to reduction in
cost
• Called tenders through public news paper
advertisement

OPEN TENDERING
+
• No charge of favoritism
• An opportunity is provided for all capable firm
• Contractor will give best price
-
• Lowest tender may not be the best
• Time consuming
• Wastage of tendering cost for failures
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SELECTIVE TENDERING
• Tenders are called from a selective list
• Less in competition and leads to increase in cost
compare to open tendering
• Called tenders through directly sending tender
notice to tenderers

SELECTIVE TENDERING
+
• Certainty on capability of tenders
• Reduce aggregate cost of tendering
• Less time consuming process compare to open
tendering
-
• Receive little higher price
• Client will not receive the best offer

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NOMINATIVE TENDERING
• Called single tendering
• Price is obtained only form one source
• Most probably there may be a negotiation process

NOMINATIVE TENDERING
+
• Certainty on capability of tender
• Reduce aggregate cost of tendering
• Less time consuming process compare to
competitive tendering
-
• Receive higher price
• Client will not receive the best offer

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SERIAL TENDERING
• Competition of both competitive and nominative
tendering
• The contractor is chosen for the first phase by
means of competitive tendering
• The tender is used for the second and later phases,
with adjustment of the initial contract price
• Suit for repetitive projects

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SINGLE ENVELOP METHOD

• When the specifications and requirements are
uniquely defined to enable submissions of both
technical and financial bids/proposals in one
envelope.

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TWO ENVELOP METHOD

• First envelope contains the qualification and
technical proposal
• Second envelop contains the financial part (price
bid/proposal).
• Two envelope are opened and evaluated
sequentially.
• Main objective of this type - to evaluate the
technical proposal and capacity of the bidders
without influence of the price quoted for moderate
technically complex works.
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WITHOUT PRE-QUALIFICATION
• Financial and technical qualifications are not
considers for calling bids.
• Once price proposal is evaluated, qualification is
considered.

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WITHOUT PRE-QUALIFICATION
• Technical qualifications
o Experience in construction (general & specific)
o Technical staff
o Machineries and equipment

• Financial qualifications
o Annual construction turnover
o Liquid assets
o Profitability ratio
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WITH PRE-QUALIFICATION
• Financial and technical qualifications are considers
before calling bids.
• Bids are called from only qualified applicants.

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WITH PRE-QUALIFICATION
• General
• Technical qualification
• Financial qualification

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WITH PRE-QUALIFICATION
General
• Business registration
• CIDA registration and grade
• Company profile & structure

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WITH PRE-QUALIFICATION
Technical
• Experience of work(General, specific)
• Key staff and their qualification & experience
• Machinery and equipment
• Quality assurance & quality control policy
• Sustainable procedure
• Occupational health and safety management system
• Communication and data management system
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WITH PRE-QUALIFICATION
Finical
• Average annual turn over
• Liquidity assets.
• Current ratio (Current asset/ current liability)
• Depth ratio (total depth/ total assets)
• Profitability ratio

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WITH PRE-QUALIFICATION
Pre-qualification document/ pre-qualification
questionnaire
• Pre-qualification questions
• Submission of answers
• Evaluation matrix (allocated marks, minimum
requirements)
• Selection

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MULTI STAGE TENDERING

• When it may be impractical to prepare complete
technical specifications in advance for the
procurement
a) large complex facilities
b) works of a complex and special nature

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MULTI STAGE TENDERING

• In the first stage, proposals are invited on the basis
of a conceptual design or performance or
functional specifications
• In second stage request for proposal is called based
on the developed version with discussion,
suggestions from initial stage

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TENDER DOCUMENT – TRADITIONAL

• Invitation for bids (IFB)
• Instructions to bidders (ITB)
• Bidding data
• Conditions of contract/ General conditions
• Particular conditions / Contract data
• Specifications (general & particular)
• Drawings
• Bill of quantities
• Standard forms (form of bid, form of agreement,
form of securities…etc)
• Schedules for additional information
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TENDER DOCUMENT – D & B

• Invitation for bids (IFB)
• Instructions to bidders (ITB)
• Bidding data
• Conditions of contract/ General conditions
• Particular conditions / Contract data
• Employer’s requirements
• Standard forms (form of bid, form of agreement,
form of securities…etc)
• Schedules for additional information
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DECISION TO TENDER
Contractor consider following factors before decide to
submit tender
• Contract conditions
• Current Workload
• Type of work
• Resources needed
• Tender documentation
• Client’s Special Requirements

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PRE-BID MEETING
• Held before bid submission
• Clarify issues and answer questions
• Minutes are recorded
• Results of pre-bid meeting to be made by issuing
addendum

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BID PREPARATION
• Price BOQ and other schedules
• Attach required rate analysis
• Annex reports, evidences and supporting documents for
technical and financial qualifications
• Annex company profile, business registration, CIDA
registration, VAT registration and other required
information
• Attach work programme
• Fill and sign form of bid

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BID SUBMISSION
• Original and No. of copies of bid should be submitted
before deadline as requested
• To the address given in bidding data
• Late bids are not accepted

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BID OPENING
• Envelops marked “Withdrawal” are opened first and their
original bids are not opened
• Envelops marked “Modification” are opened second and
read out with original bids
• Finally other bids marked as “Original” are opened
• Envelops marked as “Copy” are not opened

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BID OPENING
Announced …
• Name and address of the bidder
• Absence or presence of the bid security
• Bid price given in words in the form of bid
• Any discount offered by bidders

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BID EVALUATION
Three stages …..
• Preliminary examination of bids
• Detailed evaluation
• Post qualification verification

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BID EVALUATION
Preliminary examination of bids
• Bidder’s is eligible - bidder shall not be blacklisted and the
domestic bidder should have required CIDA registration
• Validity of bid – singed by a person having legal power to
sign or an authorized party with a power of attorney
• Bid security - in acceptable format, for required amount
and duration
• Responsiveness – substantially responsive to the
requirement of the bidding document

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BID EVALUATION
Detailed evaluation
• Exclude VAT, contingencies and provisional sum amounts
• Correction of arithmetical errors
• Application of applicable discount
• Adjustment to bid prices for omissions
• Adjustments for acceptable departures
• Operational costs and life cycle costing
• Conversion to common currency
• Domestic preference
• Examine for unbalance bidding
• Alternate bids 34

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BID EVALUATION
Post qualification verification
Evaluation of technical and financial qualifications

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TENDER NEGOTIATION
• For negotiation of high rates
• Requesting a discount
• Scope changes

Needed to enter into a MOU

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LETTER OF ACCEPTANCE
• An offer is an expression of willingness to
contract on certain terms
• Acceptance is the final and unqualified expression
of assert to the terms of the offer
• Imposing conditions to LOA makes it as counter
offer

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LETTER OF INTENT
• It merely expresses an intention to enter into a
contract in the future.
• LOI doe not create a contractual liability
• If the party who has acted on LOI, payment
should based on a quantum meruit

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