Lecture 1

Construction Project – Initiation to Tender Stage

Adban Omar
UMAIR SHAKIR
Outline:

 Client , Consultant, Contractor

 Prequalification (Contractor , Consultant)
 Types of Bidding
 Bidding Documents
 Tender Notice , Quotation
 Security Bonds
 Letter of Intent
Client , Consultant, Contractor
Request for Proposal (RFP)

 An RFP is used where the request requires

technical expertise, specialized capability, or
where the product or service being requested
does not yet exist, and the proposal may
require research and development to create
whatever is being requested.
Expression of Interest (EOI)

A call to potential providers of goods and/or

services to register interest in supplying them.
Commonly a document describing requirements
or specifications and seeking information from
potential providers that demonstrate their ability
to meet those requirements.
Pre qualification (Contractor,
Consultant)

 In most cases, prequalification is found necessary

especially for the large and complex projects.
 Pre-qualification Notice should cover:
 Previous track record on similar projects
 Proposed management structure
 Financial standing of the Resources which can be made
available for the project.
 Information technology available for the firm.
 Details of any joint venture.
Pre qualification (Contractor,
Consultant)

Pre-qualification inquiries should inform the tenderers of

the criteria to be used for selection. After receipt of
prequalification documents from the invitees, a shortlist
should be prepared according to the applicants’
response, measured against the relevant criteria.

This should be drawn up as soon as possible so that all

firms can be notified without delay
Pre qualification (Contractor,
Consultant)

 Helps to create a pool of contractors that have the

quality, capacity and ability to perform work on projects
of a particular size and complexity
 Weeds out contractors with a history of litigation,
claims, and performance failures
Pre qualification (Contractor,
Consultant)
Types of Bidding

 Competitive Bidding
 Negotiation
Stage of Tendering
 Request for Quotation (RFQ)

A standard business process whose purpose is to invite

suppliers into a bidding process to bid on specific products
or services. RFQ generally means the same thing as IFB
(Invitation For Bid)
• For Commodity
• Usually Unit Rate is asked
• Tentative quantities is mentioned
• No EMD is required with a quotation.
Invitation for Bid / Tender Notice

It is an invitation from the owner to the contractor to

execute some work at specified cost in specified time.
It is published in the form of tender notice in news papers,
notice boards, gussets, etc. according to the cost of works.
Procedure for inviting tender:-

1. Preparation of tender documents

2. Issue of notice inviting tender or tender call
notice
3. Submission and opening of tenders and their
scrutiny
4. Acceptance of tender and award of contract
Information to be given in a tender
notice :-
1. Name of the department inviting tender
2. Name of work and location
3. Designation of officer inviting tender
4. Last date and time of receipt of tender
5. Period of availability of tender document
6. Cost of tender document
7. Time of completion and type of contract
8. Earnest Money Deposit to be paid
9. Date, time and place of opening the tender
10. Designation of the officer opening the tender
Information to be given in a tender
notice :-
 Schedule of stores to be issued by the owner of the project
indicating the rates and their place of supply
 Schedule of tools & plant and other facilities to be made available
by the owner, indicating the conditions, hire charges and place of
delivery
 Rate of supply of power and the point of supply
 Location of water supply point
 Time for completion and the progress to be made at intervals of
time
 Conditions regarding employment of technical personnel
 Weather conditions in the area
 Amount of EMD and the form in which it is to be paid
 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.
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 are not accepted will be
refunded.
 1% - 2% of the estimated cost of work is the Earnest Money
Deposit.
Pre- Bid Meeting :

. • The basic purpose of such meeting is to clarify any concerns the

bidder may have to the bidding document, the scope of work and
other details. When they are held for consulting services they are
known as Pre-Proposal meetings
• These meetings are formal and results are made available in
writing to all prospective bidders that are interested in the
documents.
• This gives a good chance to the potential bidder to clarify their
doubts or voice their concerns.
• Minutes of Meeting are formal part of Tender Documents and
should be distributed to all attendants
Single Envelope and Double Envelope
Tendering System

Financial
. Bid:
The financial bid is often in a completely separate envelope and
contains the price you want, the timing of payment, and anything
else like the bank account it should be paid on.

Technical Bid:
the technical bid talks about how you understand the delivering, how
you are going to deliver it, by what resources and with which
qualifications, to which timeline in the format expected, if given.
You should not mention fees at all in the technical bid as these are
often assessed separately so as to ensure best value for money not
just lowest price.
Single Envelope and Double Envelope
Tendering System

Single
. Envelope:

Double Envelope:
Single Stage & Double Stage Tendering System

.
Single Stage Bidding: TOR of the assignment is clear to the employer
and bid are invited either through single envelop (Technical & Financial
Simultaneously ) or two envelop (Technical & Financial Proposal
collected at same time, initially Technical Proposal evaluated and
Financial Proposal of technically qualified bidder opened ). bidder are
evaluated as per criteria specified in tender documents/request for
proposal.
Single Stage & Double Stage Tendering System

.
Two Stage Bidding: Employer itself is not clear about
TOR/Technical Specification of the work to be carried out. So,
Bidding is carried out in two stages. In first stage, Technical
Proposal are called from bidder against basic idea/theme of the
work to be carried out. Technical Proposal are required to state
the method/specification that how the work with basic idea to be
carried out exactly. Bidders submit Technical Proposals. On the
basis of best available specification from these Technical
Proposal, employer again prepare tender/request for proposal
now with exact specification of the work and enter into second
stage of bidding on two envelop basis ( Technical &
Financial separately).
.
Comparative Statement :
Cost of Tender Documents / Tender