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AQS 2151 Pre-Contract Administration for Quantity Surveyors

Tendering: Methods of Tendering Invitation & receipt of tenders Processes & procedures in the public & private sectors

Methods of Tendering
The objective of tendering is to select a suitable contractor at an appropriate time and obtain from him an acceptable offer upon which a contract can be let.

Generally there three (3) types of tendering used: Open Tendering Selective Tendering Negotiated Tender

Methods of Tendering
Open tender Open to all eligible contractors Invitation to tenders through the mass media (e.g. general press) Maximum competition A tender document fee is required from each contractor Selective tender As the name implies, a list of selected tenderers is produced as a basis for this method of obtaining tenders The design team together with Client will normally determine which contractors will be invited to tender. Design team will take into account contractors track records, business record, financial stability and capacity to carry out project

Methods of Tendering
Negotiated Tender Series of negotiation will take place between the client and selected contractor. Normally under design and build procurement.

Methods of Tendering
OPEN TENDERING Advantages of Open Tendering No favouritism Introduction to new firms Maximum competition Disadvantages of Open Tendering Is the lowest firm capable? Is it financially secure? Experience in tender submission? Cost of tendering increased as number of tenderer increases

Methods of Tendering
SELECTIVE TENDERING Advantages of Selective Tendering Only capable firms are invited to tender Reduces the overall cost of tendering Disadvantages of Selective Tendering Higher tender prices Possible charges of favoritism

Works < RM 10 million
Invited for local Companies with 100% bumiputera

Works RM 10 million RM 25 million

Invited for local Companies with 100% bumiputera OR Public Listed companies on BSKL with foreign shares not more than 30% and Managing Director and workers are 100% local.

Works > RM 25 million
Invited for local Companies with 100% bumiputera Local companies listed on BSKL OR JV companies, with foreign equity not more than 49% and majority of Board of Directors, Management and workers are local.

Invitation & Receipt of Tenders

Tender advertisement Local tender - minimum: in one main BM daily International tender - in one main BM daily and one main English daily, and distribute to foreign embassies

Invitation & Receipt of Tenders

Information in tender advertisement: name of department calling the tender title of project type of tender contractors qualifications
place, date & time to purchase tender document place, date & time to submit tender document price of tender document site visit (if any) (See sample of tender advertisement)
Class head and sub-head (PKK & CIDB)

Invitation & Receipt of Tenders

Submission of tender: submit the priced tender document to and at the time as stated in the tender advertisement closing time is normally no later than 12 noon
Late Submission: Late not more than 30 minutes. Can be accepted. (Subject to approval)

PKK Classifications

Limits on Value of Projects

> RM 10,000,000


RM5,000,001 RM10,000,000
RM2,000,001 RM5,000,000 RM500,001 RM2,000,000 RM200,001 RM500,000 <RM200,000

CIDB Classifications
Grade G7 G6 G5 G4 G3 G2 G1 Limits No Limit Not exceeding RM 10,000,000 Not exceeding RM 5,000,000 Not exceeding RM 3,000,000 Not exceeding RM 1,000,000 Not exceeding RM 500,000 Not exceeding RM 100,000

Tendering Procedures
Special Approval For Tender
PKK has the power to consider and approve any special request from contractors to participate in tenders for which they are not eligible to participate due to their registration of classes and experiences

(with specific reference to the Public Sector)

Why public sector? Largest single owner/developer

Tendering Procedures

one-third of total construction

procedures are more structured and formalised (e.g. governed by factors such as source of funding and type, nature and estimated cost of project) basis for good practice

Category of Procurement
Works infrastructure, building & engineering, M&E Goods raw materials, intermediate and finished goods

Services manpower, consultants and expertise

Types of Procurement
Direct Purchase goods & services up to RM10,000 - directly from any known suppliers goods & services between RM10,000 - RM50,000 - from suppliers registered with MOF works up to RM50,000 - indent to a contractor registered with CIDB and PKK Quotation works, gods and services between RM50,000 RM200,000 may be invited through registered post, by hand or posted on designated notice board Tender next slide..

Tendering Procedures
Project >RM 200,000 to be let on open tendering (there are exceptions) Selective tendering / negotiation allowed in specific circumstances (e.g. urgent or sole supplier) - prior approval from MOF

Tendering Procedures
Issuance of Tender Document
Issue from the office that prepares Tender Document i.e. PWD offices Before the issuance. The office shall ascertain
That only authorized representatives of contractors are allowed to take the document and they should produce evidence or credentials of their authorities That they have to show their Bumiputra status That a verification of status shall be made to ensure that it is still valid on that date

The issuing officer should record names, addresses and classes of registration of contractors

Tendering Procedures
Mandatory requirement for all tenders for works funded by the govt. own source of fund to be opened to Malaysian contracting firms only

The exceptions: incapability of Malaysian contractors to undertake certain works for civil engineering works valued >RM50 million each

Tendering Procedures
Tender Deposit local tender - no tender deposit international tender - tender deposit varies between RM50,000 - RM1 million Tender Period local tender - 21 days international tender - 56 days

Tendering Procedures
Tender Validity Period 90 days (may be extended) withdrawal after closing date - disciplinary action by PKK and/or agency concerned
1st Offence : 2 years suspension from participating in government tenders 2nd Offence: 5 years 3rd Offence: Cancellation of registration Shareholders : blacklisted Board of Directors : blacklisted

Tendering Procedures
Receipt and Opening of Tenders
Tenders shall be submitted at the office or deposited into tender boxes provided on or before the date mentioned in the Tender Notice Tenders shall be opened by Tender Committee On opening Committees shall prepare a schedule of tenders consisting of names, classes and registrations, status of tenderers, amount of tenders and time for completion No tender shall be open after the closing time but shall be accepted and forwarded to Tender Committee as they are.

Opening of tenders Evaluation Acceptance