TENDERS

Submitted To: Submitted By:

Ar. Preeti Bhatia Snigdha Sachdeva 1916442 Semester- X

CONTENTS
• Definition
• Type
• Procedure for Inviting Tenders
• Sample Tender Notices
• Process
• Scrutiny
DEFINITION
• Tendering is the process of making an offer , bid or
proposal or expressing interest in response to an
invitation or request of tender. Organizations will seek
other businesses to respond to a particular need , such as
the supply of goods and services, and will select an offer
or tender that meets their needs and provides the best
value for money.

• It is an invitation from the owner to the contractor to

execute some work at specified cost in specific time.

• It is published in the form of tender notice in

newspapers, notice boards, online, etc. According to the
cost of works.
TYPES OF TENDERS
• OPEN TENDERS • SINGLE TENDER

An oral talk or written document between the Engineer and Invitation is given to only one firm to render a service by
the Contractor for certain small job quoting their rates.

Sometimes it is advertised. If the quoted rates are high, it will be negotiated prior to
the agreement of the contractor.
• SEALED TENDER
• RATE CONTRACTOR
Invited for important or huge projects wide publicity is
given. Usually adopted for supply of materials, machine, tools &
plant, etc.
Always written documents are made.
It specifies the supply at a fixed rate during the period of
• LIMITED TENDER
contract.
Only a selected no. of contractors are invited to quote their
Quantity is not mentioned.
rates.
PROCEDURE FOR INVITING TENDER
Preparation
1. Preparation of tender documents
Approval to
Tender
2. Issue of notice inviting tender or tender
call notice Documentation

3. Submission and opening of tenders and

Invitation
their scrutiny
4. Acceptance of tender and award of Processing
contract
Award
Contract
SHORT TENDER NOTICE

• When work is to be completed very quickly or no contractor prefers to accept the work (the tender is floated) then a
notice with short duration is again published by the client. Such a tender notice is called “ Short Tender Notice”.

• The terms and conditions remain the same as that for ordinary tender notice.

QUOTATION

• For small jobs, the owner/engineer gives an offer to the contractor for quoting rates for works and supplies required.

• No EMD is required with a quotation.

EARNEST MONEY DEPOSIT

• It is the amount of money to be deposited along with the tender document to the department by the contractors
quoting a tender.

• This money is a guarantee against the refusal of any contractor to take up the work after the acceptance of his tender.
In case of refusal , this amount is forfeited.

• EMD of contractors whose tenders sre not accepted will be refunded.

• 1% -2% of the estimated cost of work is the Earnest Money Deposit.

SAMPLE
TENDER
NOTICES
TENDER PROCESS
1. Lump-Sump Tender
• In this system the contractor undertakes the execution of a specific work for a definite lump-sum
amount within a specified time period. On completion of the work , it is checked as per drawings
and specifications and if approved the amount is paid to the contractor.
• The quantities of various items is not measured.
• For the construction of sculptures and decorative works this system is adopted.

2. Cost Plus A Fixed Percentage Tender

Under this system, the contractor furnishes labor and materials and completes the work for the
actual total cost plus an agreed percentage of it as the profit of the contractor., The speed and
quality of work is maintained in this system but there is always tremendous wastage of materials
as the contractor’s aim is to increase the total cost of the work. This system is adopted only in the
case of emergency works.
3. Cost Plus A Fixed Fee Tender
In this system a fixed fee is given as contractor’s
profit irrespective of the total cost of work. This
is to control the tendency of the contractor to
increase the cost of the project unnecessarily.
Smaller the completion time more is the profit
and hence the contractors hurry to complete the
work the quality of workmanship is not
maintained. This system is not generally used.
4. Target Tender
The contractor is paid a fixed fee on a prime cost basis for the work performed under the contract and
in addition he receives a percentage on the savings effected against either a prior agreed estimated
total cost or a target value arrived without changing the specification.
5. Percentage Rate Tender (B1system)
In this system the contractors are required to quote single percentage either higher or lower at which
he wants to execute the job. Here scrutiny of the tenders become easier and as cement and steel is
usually supplied by the department. Chances of manipulation is less. This is the most commonly
adopted system of contract in the different departments of our state.
6. Item Rate Tender (B2 system)
Here the contractor gets the payment depending on the rate at which he has quoted every item of the
work. It was rather difficult to scrutinise the tenders submitted by various bidders and the system was
hence modifies and now the department quotes the items of work along with their quantities and the
bidders are required to quote the percentage at which he can execute the various items.
7. Labour Tenders
This is the most commonly adopted system for the construction of private individual buildings in
small cities. The contractor arranges all necessary labour, tools , plant & equipment required. The
materials are supplied by the owner and he appoints an Engineer to supervise the work to maintain
the quantity and economy in construction.
8. Joint Venture Tender
In case of huge important projects the construction works can be categorised into different parts and
each part can be given to a specialised contractor in that field . This method improves the quality of
work and the project can be completed within a short period of time .
9. Turn- Key Tender
In this system all the works related to a project including designing, planning, execution etc. are to be
done by the contractor. Once the project is completed it is handed over to the owner. The owner has
to complete the transaction works and occupy the structure by simply turning the key i.e. opening the
door.
10. Indirect Lump-Sum Tender for flats or Bungalows
In this system the rate of construction per sq.m. of
plinth area is jointly fixed by the constractor and the
owner which includes contractor’s profit also.Once this
agreement is made the contractor starts the work and
receives payment at regular intervals during the different
stages of work.
11. BOT System
Build operate and transfer is a new system in which the
land is acquired by the Govt. and the contractor is asked
to build the structure and then operate it untils the
collects the money he had spent for the construction, as
fees from the users. Once the construction cost is
recovered , the structure is handed over to the owner.
SCRUTINY OF TENDER
• Scrutiny of tender/ contract documents means 2. It should be checked that every tender should
the analysis of the promises which are going to be duly signed by the contractor.
be made by the parties to each other, so that 3. The address of contractor should be clear and
the documents becomes a balanced one which complete.
protects the rights and obligations of the
4. Verification of contractor conditions should be
parties to shape an individual law for an
done.
individual project.
5. Rates should be mentioned in both figures and
• The pointers that are needed to be kept in mind
words, both should be same, if there is any
while scrutiny are as follows:
difference lowest should be accepted.
1. List of all tenders received along with the
6. Calculations done by contractor and thetotal
details of EM received should be prepared.
cost of the work should be carefully checked.
SCRUTINY OF TENDER

7. After tender have been opened , a comparative statement is prepared in

presence of the tender opening authority and got signed by them.
8. Then compare the rates of various tenders in respect of each item rate against
the estimated rate.