TENDERING AND ESTIMATING (QUS210)

LECTURE 4 & 5

4.0 PREPARATION OF TENDER

4.1 Decision to Tender
The tender documents arrive and the estimator records all relevant information such as:
• The time allowed for preparing the tender
• Drawings available
• The approximate value and extent of the project
• The client, Architect, Q.S and other consultant
• Value of main contractors own work
• Project Details e.g. phased work, conditions of contract, access to site, working
conditions.
• Firm price or fluctuating price tender required
• Current workload and timetable for project After reviewing the above information,
management must decide whether to tender for the project or decline the invitation. If it is
decided not to submit a price, the tender documents should be returned immediately to the
architect/supervising officer. If it is decided that a tender should be submitted, the
contractor move to the next stage.

4.2 Collection of Information

The time allowed for preparing a tender is always limited; the estimator must plan the
programme very carefully. The work which has to be undertaken in a typical 4 week
tender period comprises:
• Despatching enquires
• Visit consultants offices
• Visit the site
• Receipt of quotations and examinations
• The ‘mechanical’ process of pricing the tender documentation
• Meetings with plant manager, contracts manager etc to determine a preliminary
programme, construction methods and likely plant requirements.

4.3 Enquiries and Quotations Suppliers Enquires should state:

• The specification of the material
• The quantity required
• The anticipated delivery dates
• The terms upon which the price is required
• The date by which the quotation is required
• The address of the site and access details
• Period for which the quotation is open for acceptance Sub-contractors Photocopies of
the relevant parts of the bill of quantities, specifications and if possible copies of
drawings should be sent out to perspective sub-contractors. Enquires should state clearly:
• The items to be priced
• The terms of the main contract
• The period for which the quotation is open for acceptance
• The plant, materials, attendance etc to be provided by the main contractor
• Anticipated commencement and completion dates
• The form of contract and details from the appendix
• The terms of payment • Date by which the quotation is to be submitted
• Address and details of the site

4.4 Visit to Site

The visit to site can be made after all enquires have been despatched and before prices
begin to come back. The visit to the site will enable the estimator to produce a report
giving the following information:
• The position of the site in relation to roads etc
• Names of local and statutory authorities
• Details of site/ground conditions, spot items etc
• Site access, egress and possible site layouts 24
• Facilities for disposal of surplus excavated materials etc

4.5 Visit to Consultants Offices

It may be that only drawings showing plans and elevations will be sent out with the tender
documents and that further details and working drawings can be examined at the
consultants’ offices e.g. the estimator may require further details of manufactured joinery,
steelwork joinery fittings etc, before these sections can be priced accurately.
4.6 Receipt of quotations
Prices received from sub-contractors and suppliers are examined for sufficiency, terms etc
4.7 Planning and Mid Tender Review
The project is discussed with other managers to determine a preliminary programme,
construction methods, sequence of work, site layouts and what other plant, services,
labour and site staff are required. It must be decided whether:
• All labour can be obtained locally or will it be necessary to recruit for the project.
• Sufficient plant is already owned or is it necessary to purchase/hire additional items.
• It would be desirable to sub-let any further work. The preliminary programme should
also be prepared containing the following information:
• Contract starting and completion dates
• Any work to be done in stages
• Work to be sub-let by main contractor
• Work to be done by nominated sub-contractors (if JCT 98 form)

4.8 Preparation of the Estimate

It can be divided into 4 stages:
1. The establishment of all-in rates for key items i.e. labour, gang costs, plant costs etc.
2. The selection of domestic sub-contractors and suppliers
3. The use of these ‘all-in’ rates together with costs per unit for materials to calculate unit
rates for each item in the bill
4. The pricing of the preliminaries and project overheads

4.9 Final Review

The consideration of the estimate to produce a tender is the responsibility of management.
The estimator and other senior staff will prepare reports for consideration by management
who will consider the following items before determining the tender figure;
• Project reports • Conditions of contract
• Contractual and construction risks
• Terms of the quotations from sub-contractors
• Capital required for the project
• Technical and management staff required
• Current workload
• Market Conditions
• Competition
• Reputations of client, consultants and area. Following evaluation of the alternatives, risk
and scope for profitability the ‘mark up’ is determined and the actual tender figures
calculated. The decision being made within the framework of company policy. A record
of all tenders should be kept together will the results (if known) for future reference.

4.10 Action after Submitting a Tender

4.10.1 Action with a successful tender
Check contract documents to ensure that:
• The dates, penalties etc are the same as those contained in the tender documents
• The bills have been copied correctly from the original
• The drawings are those which were circulated with the tender documents Disseminate
information
Information should be made available to those responsible for purchasing, construction
planning and plant. Feedback information Feedback from site on labour and plant outputs
etc, to be kept for future pricing Cost/Value Reconciliation At regular intervals during the
construction period, the costs at that time should be compared with a meaningful
valuation of work done in order to check that the job is ‘on target’

4.10.2 Action with an Unsuccessful Tender

It the tender has been unsuccessful the contractor must assess why this is the case.
Records of tenders submitted must be kept and estimators must evaluate their
performance. Suppliers and sub-contractors should be notified of results as soon as
possible.
Factors in Pricing General and Special Attendance on Subcontractors
Each site has its own peculiar characteristics which can have considerable influence on
the total cost of development. Some of the more important factors are:

(1) Location of site: - Due to higher wastages, materials and other cost, it is expensive to
erect a similar building in an urban area than in a provincial setting. Some parts of the
areas are subject to higher rainfall than others and this can lead to a greater loss of
working time even within the same region, the cost of operating on different sites can
vary widely. A project on a remote country site may involve long length of temporary
access road and temporary power cable for electricity supplies and increase cost of
transporting operatives and materials and components, protection of adjoining buildings
and the public and restrictions on the use of mechanical plant. Taking these problems will
incur additional cost. Furthermore, a very expose site may make working conditions more
difficult and costly. Some locations may be more vulnerable to vandalism and theft and
so require more costly protective measures.

(2) Demolition site clearance: A site may contain buildings which requires demolition,
paved areas which requires breaking up and trees which require felling, grubbing up and
disposal of their roots, another site may be cleaned of all obstruction.

(3) Contours: Few sites are entirely level. The most steeply sloping, the greater will be the
cost of foundation and earthwork, the steeping of strip foundation increase their cost.
Most buildings require constant floor levels and this will involve considerable excavation
and fill on its slopping site.

(4) Ground conditions: Where the strata is low load bearing capacity. It may be necessary
to introduce pile or other more expensive types of foundation. Raft foundations on made
up ground or in areas liable to mining subsidence may be three trust as expensive as
normal strip foundations where as pile foundation used to convey loads to a deeper load
bearing strata could be as much as five times as expensive. The cost of excavation in rock
could be five to eight times as expensive as working in normal ground, the provably
length of haul in the disposal of surplus soil also needs consideration. Where ground
water is close to the surface of the site, costly pumping operations may be needed. A wet
site may also involve raising temporary sheds and offices on brick bases and more costly
temporary roads. The types of strata will also influence the form and extent of timbering
or other means of supporting that will be needed to the sides of excavations.