Project Planning & Construction Management

Unit 4-
Control Management

RTU Curriculum
• Elements of tender operation
• Types of tenders and contracts
• Contract document
• Legal aspects of contracts
• Contract negotiation & award of work
• Determination of a contract, arbitration
 Contents
• Tender
• What is tendering?
• Govt. Tender
• Private Tender
• Classification of Tender
• Process of Inviting Tender
• Tender Document
• Information To Be Given In A Tender Document
• Information To Be Given In A Tender Notice
Definition / Meaning of Tender

To invite bids for a project, or to accept a

formal offer.

Tender usually refers to the process

whereby governments invite bids for large
projects that must be submitted within a
finite deadline.
What is Tendering?

Tendering is the process of making an offer,

bid or proposal, or expressing interest in
response to an invitation or request for 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.
Tender request documents; also referred to as
invitations to tender, Requests for Tender (RTF),
Requests for Proposal (RFP) etc outline what is
required, that is, what the requesting organization’s
needs are.

These documents also outline the particular

requirements, criteria, and instructions that are to be
followed.

Future tenders are generally widely advertised to

offer opportunities to a number of suppliers,
encourage competition and provide a greater pool of
offers to select from.
Interested suppliers will then prepare a tender; the
documents that outline the offer that they are making,
and will include pricing, schedules as well as their
eligibility for the project or procurement.

They will outline their advantage over competitors;

provide information on qualifications, competencies
and experience.

Further they have to demonstrate how their bid offers

the best value for money.
The submitted tenders are then evaluated with
regard to defined criteria. In a normal tendering
situation, this process should be conducted fairly
and honestly, and in a manner that is free from bias
or favour.

The offer that best meets all of the requirements

outlined in the request, and provides value for
money should win the contract.
The tendering process is generally utilised for
procurements or contracts involving substantial
amounts of money.

Tendering is utilised by:

 Government departments, offices and
agencies
 Private sector companies and businesses
 Non Government Organizations
 Overseas markets and businesses
Government Tendering

The Indian Government, along with State and local governments, their
agencies and departments, buy many goods and services from the
private sector, and provide a significant market opportunity for
businesses.

The government market provides many opportunities to tender for a

wide range of goods and services, from large procurements and projects
such as Defence, infrastructure and health, to supply of stationary and
cleaning contracts.

Government tendering involves various guidelines and procedures, such

as the Commonwealth Procurement Guidelines, to ensure that the
process is conducted in accordance with ethical, fair and transparent
practices. Government procurement processes are designed to
encourage competition and promote the efficient, effective and ethical
use of government resources.
Private Sector Tendering
Many private businesses are choosing to buy their products and
services by finding suppliers via a tendering process.

The private sector is attracted to tendering to realise benefits

including; maximising competition, providing an opportunity for a
much larger pool of suppliers to make an offer, as well as having a
greater choice in selecting a supplier that offers value for money.

However, the private sector has the luxury of having a much more
flexible tendering process, in comparison to the public sector
(government). Without tight constraints, the private sector can
often make the process simpler and more flexible, and tenderers
generally have fewer requirements to adhere to when submitting a
tender.
Whilst the tendering process may differ between Government and
private sector, the two groups generally look for similar things; the
core being value for money. Quality, reliability, efficiency, and added
value are important factors in any tender offers that are sought after
when evaluating tender submissions.

Other factors include-

• Authenticity and insight: Does the bidder have genuine,

substantiated knowledge and experience of the sectors of activity
in which the business is engaged and the factors that influence its
market environment and profitability?

• Partnering and synergy: Are the corporate values and policies of

the business understood and supported?
• Is there a sense that this bidder is the one best placed to work with
the client in a productive team effort?

• Risk and professional accountability: Has the bid addressed these

concepts? Does it indicate an understanding of their significance
for successful contract performance?

• Innovation: New ideas, fresh thinking and solutions that

competitors will find it hard to match are ingredients that can win
the day, but innovation needs to be both deliverable and
dependable. Has the bidder taken account of the risks associated
with innovation?

• Flexibility and responsiveness: Does the bid communicate a

readiness to ‘go the extra mile' to provide maximum value in
meeting the client's requirements, and a willingness to adapt
methods and procedures in response to unforeseen changes in the
requirements of the contract?
Classification of Tenders

1. Open tender– An oral talk or written document

between the Engineer and the Contractor for certain
small jobs to be performed. Sometimes it is
advertised.

2. Sealed tender—Invited for important or huge

projects; wide publicity is given; always written
documents are made.

3. Limited tender—Only a selected no. of contractors

are invited to quote
4. Single tender—Invitation is given to only one firm
to render a service by quoting their rates. If the quoted
rates are high, it will be negotiated prior to the
agreement of the contract.

5. Rate contract—Usually adopted for supply of

materials, machine, tools & plant, etc. (items to the
store).

It specifies the supply at a fixed rate during the period

of contract. The quantities are not mentioned in type of
contract and the contractor is bound to accept any order
which would be placed before him.
Procedure of Inviting Tender:

1. Preparation of Tender Document

2. Issue of notice inviting tender or tender call
notice
3. Submission & opening of tenders and their
scrutiny
4. Acceptance of tender and award of contract
Information to be given in a tender notice

• Name of the department inviting tender

• Name of work and location
• Designation of officer inviting tender
• Last date and time of receipt of tender
• Period of availability of tender document
• Cost of tender document
• Time of completion and type of contract
• Earnest Money Deposit to be paid
• Date, time and place of opening the tender
• Designation of the officer opening the tender
Tender Document

A tender document is the document which contains

all terms and condition of the items/services to be
procured by the purchaser.

It generally includes: Terms and conditions, scope of

supply, bill of quantity, format for agreement,
Earnest Money Deposit, Security Deposit, do’s,
don’t do’s, special condition of contract, general
conditions of contract, payment terms, delivery time
and locations etc.
Information to be given in a tender document:-

1. General conditions of tender

2. Schedule of items of work with clear specifications
3. Special conditions
4. The notice inviting tender in specified form like PWD 6
5. Layout plan, location of work
6. Division in which location is situated
7. Schedule of quantities of work
8. Nearest road/railway link
9. Set of drawings including working drawings
10. Availability of materials in the vicinity
11. Detailed specifications or reference to standard specifications
for each item of work
12. Complete architectural and structural drawings