Selecting a Contractor - Types of Tendering

Ron Gatepain

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Requirements of the Contractor

Has experience with the type of project to be developed. Is able to cope with the size of the contract. Has sufficient financial resources to be able to carry out the contract. Has or can get sufficient labour and plant in order to carry out the work. Is able to start when required.
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Types of Tendering
Open Tendering Selective Tendering Negotiated Tendering Two Stage Tendering Serial Tendering

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Open Tendering
Contractors invited to tender for a contract through advertisements Can result in a large number of unsuitable firms tendering for the work Can result in wasted time and effort in the selection process Best prices by firms wanting to establish themselves
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Selective Tendering
Architects will normally have a list of contractors who undertake different types of contracts Contractors are invited to tender on their proven record in relation to the type and size of contract and their reliability Has in the past produced problems of 'ringing'

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Negotiated Tendering
Usually used to employ contractors of a specialist nature, or to extend an existing contract, i.e. where a wing is added to a building after the building has been started Cost Reimbursement contract is a variation of this which can be used when completion time is more important than cost.

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Two Stage Tendering

Used to bring in a contractor at the design stage which is useful to advise the architect of any problems with the design of the building. The contractor would be selected by tendering on an approximate BoQ, a bill for a similar project or a notional bill Unit rates would be negotiated on the basis of the original tender

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Serial Tendering
This method tenders are invited from a selected list on the basis of a typical (notional) bill of quantities. The contractor chosen normally submits the lowest price who undertakes to enter into a series of contracts to carry out the work using the rates in the notional bill of quantities. Method reduces the tender costs and normally results in contractors quoting low rates in order to obtain a guaranteed programme of work.

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Negotiation takes place to agree:

a price for completing the work, the form of contract used an agreed programme for the work the method by which the work is carried out

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Advantages
Fewer sets of documents are required Less time in assessing tenders Performance bond not required Contractors performance known Eliminates unscrupulous contractors Gives contractor a fair chance of winning the contract
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