Chapter -3

Tender & Tender Documents.

Definition—Tender is an offer, in writing , from a
contractor to execute some specified work or supply
of material for certain payment of money.
The work may be----------
1. construction work as per specification & drawings.
2 . Supply of materials & labours
3. Transportation of materials.
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 Types of Tender

Local tender Global tender

Local tenders- are published in local newspaper. These are

invited for any type of work to be executed in our

country.specilised design or manufacture from the globe is not

needed. All these are fulfilled in our country.

.
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 EMD:
It is the initial deposit paid with the tender in order to
show the earnest desire of the contractor to take up
the work if awarded. An amount equal to 1.5 to 2% of
the estimated cost of work is taken as EMD. This
amount remains in the safe custody of the govt for the
work. This amount carries no interest. After opening
the tender EMD of all unsuccessful contractors is
refunded to them on applying to the authority
the EMD of successful contractor forms a part &
parcel of security deposit of 10% required to be paid
while signing the contract. The main purpose of EMD
is to maintain healthy competition between the
bidders .EMD is accepted in cash,DD or in the form of
government securities like postal order, bank
guarantee .

3
 Security deposit:
once the tender is accepted the selected /sucessful
contractor has to deposit a certain amount with the
government. The amount varies from 5% to 10% of
estimated cost of work with a highest limit of 5 lakh
for any amount of work. this amount is known as
security deposit which includes the amount of SD
paid with the tender. This amount is helpful as a
check on the contractor for fulfilling all terms and
conditions of the contract including the quality &
time limit. This amount remains with the Govt till
the final completion is over.
It is refunded in Two stages.
1.-50% after virtual completion of the project
2.-Remaining 50% after the defect liability period
4
 Validity period:
As the the tenders are opened in presence of the
contractors in public sector, the lowest bidder is
immediately located because of % rate tender system.
The lowest bidder is then called as successful
contractor who has to start the work within 120 days
of opening of the .this 120 days period is called the
tender validity period .the filled up tender when
accepted becomes agreement The contractor within
120 days is informed with work order to take up the
work by signing the contract as indicated in the work
order. The reason for validity period is the time
consuming process of procuremnt of materials, making
arrangements of water supply etc.
5
 Rejecting all tenders:
1.If there is suspicion of illlegal collusion forming a
ring & syndicate
2. If there are radical changes in the nature of work
or alignment.
3.The lowest tender is much higher than the
estimated cost of the work.
4.minimum no. of tenders are not received for
healthy competition.
-----min—03
--------------05----good competition
----------more than 10------very good.
5.serious sickness or death of contractor.
6.Earthquakes, floods, wars
conditions beyond control of common man.
6
Rejecting all tenders:
1.not submitted in perticular format sold by the dept.
2.Improper offer given by the contractor. Ie. Too low or too
high
3.EMD not enclosed with the tender.
4.not signing on the contract.
5.some counter conditions put by the contractor which
are not acceptable to the dept.
6.Bamkrupt.
In olden days the tender was rejected due to-------
a) lack of experience
b) lack of finance
c)Inadequate staff & reputations

Prequalification:

7
Necessity of tender:

1. To check willingness of the contractor to carry out

the work.

2. To get reasonable offer from the contractors within

the estimated cost.

3. To complete the work in time.

4. To use expertise & resources of the contractor

8
Global tenders:

These are internationally published. Any firm or contractor

from the world can take part in the tendering process. Such

tenders are invited for very large projects like

airport,tunnels,Expressways.etc

9
Other types include-----
open tender-contractor can enter into open
competition. All gets the opportunity to fill
the tender.
Limited tender-limited no. of contractors are
invited.
Negotiated tender-Negotiations are held
between owner & the contractor.
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 Tender notice:-
it is notice given in the newspaper inviting the contractors to
give their offers to carry out work for certain specified amount.
The notice may be given local & / or international newspaper.
This is very important document of contract because the entire
contract agreement depends on the notice.
It should be short with minimum required information about
the work.
THE ADVETISEMENT SHOULD BE ACCURATE & COMPREHENSIVE. The copy of
advertisement should be included as part of document. Which
will be helpful in legal matters.
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Contents in tender notice:
a) Name of authority inviting tender.
b)Name of the work and its location.
c) Estimated cost
d) Time limit
time limit & penalty.
e) Earnest money required with the tender.
f) The availability of data & forms.
g) Last Date, place ,Time Of Receipt Of Tender
h)The right to reject the tender.
OTHER INFORMAATION SUCH AS COST OF BLANK
FORM,CONDITIONS,MODE OF SUBMITTING,THE WAY IN WHICH IT IS
SUBMITTED.
12
 Drafting tender notice:
Drafting a specimen tender notice
OFFICE OF E.E.
SPECIAL WORKS DIVISION
M.G.ROAD,PUNE-01
Tender notice
No: ---90/01/14-15 Date:12/1/15
sealed item rate tenders are in B2 are invited by Executive engineer
public works division Pune from the registered contractors in appropriate
class for the the following works.

Sr.no Name of work Estimated Earnest Security Time of

cost in Rs money deposit completion
In RS In Rs
1 Construction of 3021500/- 30215/- 151075/- 18 months
guest house building
for Govt.poly. pune
13
Blank tender form at a non refundable cost of Rs.500/-(600/-by
post) can be obtained from the office of Executive Engineer P W
Division no.1 Pune up to 4.00 pm during working hours on all
working hours ( Except holidays) from ------------ to ---------
Tenders will be received in office of EE up to 3.00 pm on -------
and shall be opened on the same day at 4.0 pm in presence of
contractors who may likely to attend.
The undersigned reserves the right to reject any or all tenders,
without assigning any reasons.

sd /-
Executive Engineer
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 Authority inviting tender
Tender notice
No: ---90/01/14-15 Date:12/1/15
Sealed tenders are invited in (type) tender form from
registered contractors --------class, for the work as mentioned
below and will be received in sealed covers addressed to -------------
-(Authority inviting tender ) , duly subscribed with the name of the
work, by the undersigned, in his office unto the date and time noted
as below and will be opened on same day, in presence of intending
contractors, if possible. A certified true copy of the registration will
have to be tendered with the application, by the contractor, for the
issue of tender form.
1.An amount as mentioned below should be paid on account of EM
by cash or DD drawn in favor of -------(Authority inviting tender
1.name of work--------------------------------------------------------
2.estimated cost--------------------------------------------------------
3.Earnest money--------------------------------------------------------
4.Security deposit------------------------------------------------------ 15
5.time of completion-------------------------------------------------
6.cost of blank forms.------------------------------------------7.blank
forms are avaible between ----------& ------------
8.last date receiving tenders--------------------------------
9.date of opening tenders------------------------------------
10.class of contractors--------
additional information if any regading the contract can be obtained
from the office of the undersigned.

The undersigned reserves the right to reject any or all tenders,

without assigning any reasons.

sd /-
Executive Engineer

16
 EMD:
It is the initial deposit paid with the tender in order to
show the earnest desire of the contractor to take up
the work if awarded. An amount equal to 1.5 to 2% of
the estimated cost of work is taken as EMD. This
amount remains in the safe custody of the govt for the
work. This amount carries no interest. After opening
the tender EMD of all unsuccessful contractors is
refunded to them on applying to the authority
the EMD of successful contractor forms a part &
parcel of security deposit of 10% required to be paid
while signing the contract. The main purpose of EMD
is to maintain healthy competition between the
bidders .EMD is accepted in cash,DD or in the form of
government securities like postal order, bank
guarantee .

17
 Security deposit:
once the tender is accepted the selected /sucessful
contractor has to deposit a certain amount with the
government. The amount varies from 5% to 10% of
estimated cost of work with a highest limit of 5 lakh
for any amount of work. this amount is known as
security deposit which includes the amount of SD
paid with the tender. This amount is helpful as a
check on the contractor for fulfilling all terms and
conditions of the contract including the quality &
time limit. This amount remains with the Govt till
the final completion is over.
It is refunded in Two stages.
1.-50% after virtual completion of the project
2.-Remaining 50% after the defect liability period
18
 Validity period:
As the the tenders are opened in presence of the
contractors in public sector, the lowest bidder is
immediately located because of % rate tender system.
The lowest bidder is then called as successful
contractor who has to start the work within 120 days
of opening of the .this 120 days period is called the
tender validity period .the filled up tender when
accepted becomes agreement The contractor within
120 days is informed with work order to take up the
work by signing the contract as indicated in the work
order. The reason for validity period is the time
consuming process of procuremnt of materials, making
arrangements of water supply etc.
19
Defect liability period:
it is the period during which any defect in the work is noticed,then the
contractor has to rectify this defect at his cost upto satisfaction of the
authority.
The period is usually,
---first monsoon season
or…..

----six months after virtual completion

……whichever is later.
If nothing is mentioned about the period then it is taken as12 calendar months.
Assessing the defect…..
1.faulty planning & design.
2.Fulty execution of work
3.use of inferior materials & workmanship.

If contractor fails to rectify the defects---SD is not refunded.

20
 Rejecting all tenders:
1.If there is suspicion of illlegal collusion forming a
ring & syndicate
2. If there are radical changes in the nature of work
or alignment.
3.The lowest tender is much higher than the
estimated cost of the work.
4.minimum no. of tenders are not received for
healthy competition.
-----min—03
--------------05----good competition
----------more than 10------very good.
5.serious sickness or death of contractor.
6.Earthquakes, floods, wars
conditions beyond control of common man.
21
Rejecting lowest tender:
1.not submitted in perticular format sold by the dept.
2.Improper offer given by the contractor. Ie. Too low or too
high
3.EMD not enclosed with the tender.
4.not signing on the contract.
5.some counter conditions put by the contractor which
are not acceptable to the dept.
6.Bamkrupt.
In olden days the tender was rejected due to-------
a) lack of experience
b) lack of finance
c)Inadequate staff & reputations

Prequalification:

22
Corrigendum of tender notice:
The last date & time for the receipt of complete
tenders forms can be extended in following
circumstances:
1.The preparation time to the contractors is short
& same is brought to the notice of the authority.
2.Important changes in plan & design are essential
after issue of forms.
3. Tender papers are not ready in office.
4. sufficient no. of blank forms are not sold.
In new schedule should be brought to the notice
of the contractors by giving corrigendum in the
newspaper.
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In continueation of the tender notice published in this
newspaper dated…….it is hereby notified that the dates of
issues & receipt of tenders for the work of -----------has
been extended up to---------& --------respectively.
All other conditions remains the same.

date EXECUTIVE ENGR

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