4. TENDERING FOR PROCUREMENT OF GOODS
Procurement of goods done by following the standard method of
obtaining bids in,
(a) Advertised Tender System;
(b) Limited Tender System; and
(c) Single Tender System
5. a) Advertised Tender System;
used for procurement of goods of estimated value of Rs. 10 lacs (ten lacs rupees) and
above or such limit as may be prescribed. Advertisement in such cases shall be given in the
Official Gazette of Himachal Pradesh and at least in two leading daily news papers having
wide circulation.
The Procurement Entity shall post the complete tender documents in its web site and
permit prospective bidders to make use of the documents downloaded from the web site.
Specific mention shall be made in the tender documents for comprehensive maintenance
contract where ever required.
The minimum time to be allowed for submission of bids shall be three weeks from the date
of publication of the tender notice or availability of the tender documents for sale, whichever
is later. If items are from abroad, the minimum period shall be four weeks for both domestic
and foreign bidders.
6. Highly valuable plant and machinery of a complex and technical nature, bids shall
be procured in the following manner, namely:-
technical bid consisting of all technical details along with commercial terms and
conditions and financial bid indicating item-wise prices for the items mentioned
in the technical bid shall be submitted separately by the bidders;
the technical bid and the financial bid shall be sealed by the bidder in separate
covers duly super-scribed. Both these sealed covers shall be put in a bigger
cover which shall also be sealed and duly super-scribed. The technical bids
shall be opened by the Procurement Entity at the first instance and evaluated
by a committee constituted by Head of the Department; and
at the second stage financial bids only of the technically acceptable offers,
7. All the terms, conditions, stipulations and information to be incorporated in the
tender documents shall contain instructions to bidders, conditions of contract,
schedule of requirements, specifications and allied technical details, price
schedule (to be utilized by the bidders for quoting their prices), contract form and
other standard forms, if any, to be utilized by the Procurement Entity and the
bidders.
8. b) Limited Tender System;
Limited Tender System shall be adopted when estimated value of the goods to be procured is upto Rs. 10 lacs
(ten lacs rupees) or such limit as may be prescribed. Copies of the tender documents shall be sent directly by
speed post or registered post or courier or e-mail to the firms dealing in required goods to obtain more responsive
bids on competitive basis. The number of firms in Limited Tender System shall not be less than three.
Purchase through Limited Tender System may be adopted even where the estimated value of the procurement
is more than the limit specified in the following circumstances, if, -
the Head of the Department certifies that the demand is urgent and procuring of goods through limited tender
system is justified in view of urgency, indicating therein reasons why the procurement could not be
anticipated for resorting to advertisement tender system;
there are sufficient reasons to be recorded in writing by the Procurement Entity that it shall not be in the
public interest to procure the goods through advertised tender enquiry; and
the sources of supply are definitely known and possibility of fresh source(s) beyond those being resorted to,
is remote.
9. c) Single Tender System
Single Tender System shall be adopted in case of articles of proprietary nature, which are available from
single source.
Articles of proprietary nature shall be purchased, after obtaining a certificate from the manufacturers or
sole agents, as the case may be, to the effect that the rates quoted by them are identical to those
approved by the Director General of Supplies and Disposals and / or Comptroller of Stores, Himachal
Pradesh or the rates quoted by them are similar to those quoted in any other state in the country.
Single Tender System shall also be resorted to for additional purchase of goods from the original
suppliers, which are intended either as part replacement of existing goods, services or installations or the
extension of existing goods, services or installations, where such additional purchase of equipments and
services shall meet the requirements of Procurement Entity for utilizing the already existing equipments
or services.
12. TENDERING FOR CONTRACTING SERVICES
Department may outsource certain services in the interest of economy and
efficiency and the detailed procedures and instructions for this purpose shall be
such as may be prescribed.
The Department shall prepare tender enquiry documents containing, inter alia, -
(a) the details of the work or service to be done or rendered by the contractor;
(b) the facilities and inputs which shall be provided to the contractor by the Department;
(c) eligibility criteria for performing the contract;
(d) statutory and contractual obligations to be complied with by the contractor;
(e) contractor’s past experience in similar work or service;
13. Contracting services done by following the standard method of obtaining bids
in,
(a) Advertised Tender System
(b) Limited Tender System
15. Tendering in Construction
A tender is a fixed-price offer to execute a work or supply products. During the first
step of this tender procedure, contractors are invited to submit sealed bids for
construction or provide particularly planned services or items within a specific time
limit.
Tender means an offer made by a contractor to the owner with a view to obtain his
acceptance for construction of a facility.
An invitation to tender may be issued for many different requirements, including
demolition, equipment supply, supply of raw materials and more. In construction, the
tender process is usually to locate and select the contractor that will carry out the
16. The main objective of the Tendering Process in Construction is
to eliminate favoritism and corruption in awarding works to
construction companies.
With the help of the tender, the client can compare different prices quoted by
various contractors for work. It is always the low price and experienced
contractor wins the tender. The tendering process in construction plays an
important role in the selection of the cheapest and most quality bidder for work.
17. Tender Document
A Tender is a written document in which work details are mentioned. Is the
document is publicly released or sent to eligible suppliers or contractors who are
willing to fill it and take the work
A tender document helps in a tendering process that helps a buyer select
qualified and interested suppliers based on certain contract criteria. Broadly this
is pricing documentation and quality criteria
18. TENDER
DOCUMENT
Set of
terms and
conditions
A complete
set of
drawings with
details
Detailed
specification
of work and
material to be
used
General
conditions
and special
conditions of
contract
Schedule of
quantities of
various items
of work.
(mentions
quality)
21. 1. Open Tendering
Main tendering process in construction employed by government as well as private sector.
Client advertises the tender offer in the local newspaper and media giving detail and
key information about the proposed works and inviting interested contractors to tender.
If the pre-requisite to tendering on the form of possession for tender of
the necessary registration has been identified in the tender paper, then the advertisement is
directed to only that particular class of the agency or firm having the said qualifications.
To reduce the number of inquiries, the earnest money is deposited
Although the price is very important in the decision on which tender or bid to accept, it is
not the only factor taken into account. The client does not bind to accept the lowest or any
22. Advantages of Open Tendering
It allows any interested contractor to tender. Therefore it allows an unknown
contractor to compete for the work.
High levels of transparency and competition
Allows the tender list to be made without bias. The client will obtain the best
bargain possible.
No favoritism/partiality in selecting contractors.
It is a traditional method of tendering and familiar to all sectors of the engineering
and construction industry.
Create opportunities (for a more significant number of contractors) so that the
owner can receive a better price.
23. Disadvantages of Open Tendering
The tender list can be long as too many contractors tendering for the job.
Uneconomic/inefficient use of the source.
Public accountability may be questioned if the lowest offer is not accepted.
The tendering process consumes additional time.
Can choose a contractor with no prior experience.
Untrustworthy competition.
24.
25. 2. Selective Tendering
The selective tendering process in construction is the one alternative developed to address the
limitations of the open tendering procedure.
A shortlist of contractors is drawn up and they are invited to submit tenders ensuring that contractors
with the necessary experience can submit bids.
The purpose of the selective tendering process in construction is to improve the quality of the bids
received, to ensure that contractors with the necessary experience and competence are allowed
to submit the necessary bids, due to the urgent work involved.
Makes the tendering process in construction more manageable and less a burden on the
parties involved.
It can be a faster process than open tendering as there is no need for pre-qualification questionnaires.
26. Advantages of Selective Tendering
It reduces the cost of tendering and the economic use of resources.
Reduce tender documentation.
Shorter tender periods, less time consuming.
Better management of the tender process.
Only the competent and qualified contractors are invited to tender
Can choose a dependable, competent contractor.
Better tender process management.
27. Disadvantages of Selective Tendering
Less competition can lead to bias.
It reduces the amount of work available to other contractors, particularly for new
contractors.
Tender Prices may invariably be higher than would have been in open tendering.
Favoritism may occur throughout the shortlisting process.
Greater chance of collusion.
28.
29. 3. Negotiated Tendering
The negotiation tendering process in construction is mostly used in
the engineering and construction industry commencing from tendering till
dispute resolutions, i.e. under the pre-contract negotiations & post-contract
negotiations. Usually with a single contractor but may be up to three contractors.
This occurs when a client reaches out to a single supplier. This may be because
they’ve worked together in the past, or they could be a specialist in the field. For highly
specialist contracts, or for extending existing contracts, negotiated tendering might be
the best way forwards.
30. Negotiation process and its need;
The contractor can be selected either from the employer’s list
of preferences or on the advice of the professional team.
The contractor is apprised of the work scope. Negotiations can
be applied to the following type of contract.
In this type of tendering process in construction, the employer
has a long-term business relationship with the contractor.
Where the contractor is involved in the financing of the project.
Where there is a pressing need to have a very early start of work on
the site and to complete the works on a fast track basis.
31. Advantages of Negotiated Tendering
This form of construction tendering process reduces the risk of failure.
The best alternatives for the employer to adopt are special circumstances such as
emergencies, security reasons, etc.
Early Commencement of work on site. It decreases the period involved
in appointing the contractor for any tendering work.
The Contractor can contribute his expertise during the design stage.
32. Disadvantages of Negotiated Tendering
The cost of work is likely higher than competitive tender.
Reduces the availability of work for other contractors especially new ones.
33.
34. 4. Serial Tendering
Serial tendering is where tenders are submitted based on typical quantities or
schedule of works.
This enables tenders to value works over a series of similar projects, for a fixed
period of time.
For example, minor works, repetitive work or maintenance contracts.
The tender documents usually detail the buildings that would be covered by the
works, the time period over which the works will be carried out, an estimate of the
value of the works and an estimate of the size of individual orders.
35. The rates submitted can be used to value works over a series of
similar projects, often for a fixed period of time following which the tender
procedure may be repeated .
When individual works are required, the client issues an instruction (or
order) to the contractor which may include a written description of the
works, drawings if appropriate and a valuation agreed by the client and
contractor.
Payments are then calculated based on an the agreed schedule of rates
36. Advantages of Serial Tendering
Can reduce tender costs.
Encourages suppliers to submit low rates to secure ongoing work.
Encourages innovation and stability by giving winning contractors confidence to
invest in their business.
Tender procedure can be repeated and used for similar projects.
37. Disadvantages of Serial Tendering
Reduces competition and investment by other suppliers who are unable to secure
tenders.
38.
39. 5. Framework Tendering
Clients that are continuously commissioning construction work might want to reduce procurement
timescales, learning curves and other risks by using framework agreements. This allows the client
to invite tenders from suppliers of goods and services to be carried out over a period of time on a
call-off basis as and when required.
Involves documents that define the scope and possible locations for the works or services likely to
be required during the defined time period. They should describe the contract conditions that will be
used for pre-construction services (such as design), and/or the contract conditions that will be used
to execute the works.
40. Depending on the size and complexity of the anticipated projects, the supplier
might provide a pricing mechanism or risk adjustment mechanism for different
types of contract that might be used, for example a minor works contract, a cost
reimbursable contract, a design and build contract, and so on.
A suitable option would then be selected by the client depending on the nature
of the projects that emerged.
When there is more than one suitable supplier available to the client, they can
introduce a secondary selection process.
41. Advantages of Framework Tendering
The advantage to the client of this process is that they are able instigate a selection
procedure for individual projects without having to undertake a time-consuming pre-
qualification process
reduced tender costs
can speed things up on individual projects.
For suppliers, they are likely to be awarded projects frequently if they are already on
the framework
42. Disadvantages of Framework Tendering
Suppliers having already been appointed on a framework agreement, they may then
have to bid for individual projects anyway, and after a great deal of time and effort
may not be awarded any projects, costing them more time and energy
43.
44. 6. Single-stage and Two-stage Tendering
Two-stage tendering allows early appointment of a supplier or specialist . It can be
useful on projects where the client’s requirements are not yet set.
Stages :
In the first stage, the supplier and client make a bespoke agreement, a pre-
construction services agreement or a consultancy agreement, leaving an appendix
detailing the requirements to tender during the second stage.
The appeal of two-stage tendering is that it allows the client to pass design risk to
the contractor, whilst the contractor is part of the team early on. Usually there is no
obligation to complete the second stage, and the price is negotiable.
45. Advantages of Single-stage and Two-
stage Tendering
It can help create more harmonious working relationships.
Contractor does not face much competition
46. Disadvantages of Single-stage and
Two-stage Tendering
If negotiations fail, client’s keep a backup bid in place. But some suppliers may be
reluctant to come on board after they learn another contractor was awarded first stage
tender.
48. Tendering
Tendering is the process of inviting bids for significant projects.
Invitation from the proprietor to the contractor to perform particular work at a
given cost and within a specified time frame
With the help of the tender, the client can compare different prices quoted by
various contractors for work.
49. Characteristics of Tender
Eligibility Criteria
Brief Description of work
Period of completion of work
Earnest Money Deposit
Place and Period of Issue of tender documents
Date, time and place of opening of tenders
53. TENDER
PREPARATION (PRE-
TENDER STAGE) TENDER PERIOD
TENDER
EVALUATION
PROJECT
DEFINING AND
SCOPING
SELCTION
PROCESS FOR
TENDERES
TENDER
DOCUMENTATION
SELECTION
CRITERIA
54. PROJECT DEFINING AND SCOPING
A Project Brief is prepared that defines the scope of the project for which Tender Documents are to be prepared. This document must
define all project requirements (including functional goals, performance, technical criteria, completion dates or term date requirements) for
the project. Any known constraints associated with the delivery of the contract should be identified up front (e.g. public access
requirements, availability of land, limits to work, approval conditions). Failure to include all scoping requirements may result in expectations
not being met, and disputes or increases in cost at a later date.
A cost estimate is established based on the scope defined in the Project Brief, which should include the proposed risk allocation. Costs
need to be estimated for all resources associated with the project (including labour, materials and supplies).
A time estimate is established based on the scope defined in the Project Brief. This involves the definition, sequencing and duration
estimation of individual project activities.
A cost/benefit exercise is carried out, taking into account the initial cost estimate, time estimate and expected costs/revenues over the life
of the project.
An appropriate budget is allocated and finance arranged to develop the project.
Appropriate time is allowed to undertake these activities.
56. TENDER DOCUMENTATION
The content of the tender documentation will vary for particular projects according to factors such as
project size, complexity and delivery method. The documents will contain the evaluation criteria, the
evaluation procedures and the proposed timing of the evaluation process
57. SELECTION CRITERIA
Before calling tenders, project-specific qualification criteria must be established
and the relative importance of each must be decided. such criteria need to cover the
critical factors on which the success of the project is based.
The qualification criteria must be clearly stated in the tender documentation and
their order of importance may be indicated
Typical criteria for selection include
Conformity – does the tender conform to the requirements outlined in the tender
documents?
Capability – this would include previous experience, financial resources,
technical resources, quality assurance system, workplace health and safety
record, environmental compliance
Innovation
Price – the tendered cost may include whole-of-life as well as capital costs
Construction period
58. Pre-qualification bidders are supplied with pre-qualification documents. To review,
qualification, information provided by them includes:
Past experience
Major works ongoing
Financial capacity
Equipment to be used
Technical personnel
59.
60. TENDER
PREPARATION (PRE-
TENDER STAGE) TENDER PERIOD
TENDER
EVALUATION
TENDER
ADVERTISEMENT/
CALL FOR TENDERS
RESPONDING
INVITATIONS TO
TENDER &
DEVELOPING THE
COMMERCIAL
OFFICER
TENDER
MEETINGS
AND
ENQUIRIES
AMENDMENTS TO
TENDER
DOCUMENTS
SUBMISSION AND
CLOSING OF
TENDERS
61. TENDER ADVERTISEMENT/ CALL FOR
TENDERS
Tender notice/notice inviting tender published in newspapers/websites/ e-
procurement portals
It is a mandatory requirement for Government organizations from a
Transparency point of view and publishes a public notice in newspaper format-
wise.
It includes a letter to invite to tender, preliminaries such as pre-construction
information, the form of contract, a tendering pricing document, design drawings,
and any other specifications necessary for the works.
62. In cases where tenders are advertised, it is recommended that the advertisement includes the
following
an appropriate summary description of the work required
details of when and where the documents may be obtained
details of when and where tenders will close
details of any tender documentation purchase price or deposit and if applicable, the method of obtaining a refund
of that cost
the name, address, telephone number, facsimile number and email address of contact person.
With respect to procedural issues, it is recommended that
A written record is kept of all persons to whom the tender documents are issued. It is also recommended that
each tender set be numbered for identification and tracking purposes.
Tender document deposit monies collected and receipts issued (if required).
In the case of selected, pre-qualified and invited tenders, the tenderers are informed of the number of tenders
being invited.
No tender price offered orally is received.
63.
64.
65.
66. RESPONDING INVITATIONS TO TENDER &
DEVELOPING THE COMMERCIAL OFFICER
In the case of selected or invited tenders, where a tenderer decides not to
proceed with the tender, the tenderer should promptly advise the client.
In the case of pre-qualified tenders, tenderers should be required to provide an
undertaking to tender if selected.
Tenderers should formally acknowledge the receipt of tender documents in
writing and promptly advise the client if they become aware of errors, omissions,
ambiguities or discrepancies in the documents. The tenders submitted should
conform to all aspects of the requirements defined in the tender documents.
67. TENDER MEETINGS AND ENQUIRIES
It is recommended that all information provided between the parties is treated as
confidential and commercial-in-confidence. It should be ensured that
All briefing meetings held for tenderers are minuted. Minutes are then forwarded to all
tenderers and are included as part of the tender documentation.
The contact person responsible for dealing with enquiries from tenderers is to document all
such inquiries, noting the time, the date and the issue discussed.
Information provided to one tenderer is also promptly given to all other tenderers.
In the case where an enquiry reveals a significant error, omission, ambiguity or discrepancy in
the tender documents, the information provided to resolve the issue is promptly forwarded in
writing to all tenderers.
68. AMENDMENTS TO TENDER DOCUMENTS
It should be avoided. A review of the tender documents prior to issue will minimise the
requirement to amend tender documents due to errors or omissions
Where significant issues arise that make it necessary to amend the tender documents
during the tender period, the amendments are advised as an addendum, forwarded to
all tenderers. Each addendum is issued in sufficient time for all tenderers to consider
the amendments properly and fully before tenders close.
The tender period may need to be extended, particularly if the addendum is issued late
in the tender period.
The lot feeder should ensure that each tenderer acknowledges receipt of each
addendum in writing and confirms in their tenders that allowance has been made for
each addendum
69. SUBMISSION AND CLOSING OF TENDERS
The security and confidentiality of all tenders received is achieved following the closing of
tenders. Procedures for the security of documents, access to documents and the availability of
price-sensitive information are to be developed in advance of the closing of tenders.
• Tenders are generally received in a secure tender box and opened in the presence of a
specially qualified team
One copy of each of the tenders (the original) is separately stored in a secure location from
working copies, for reference purposes.
Each tenderer is informed in writing that its tender has been received.
In the event that the client is prepared to consider late tenders and non-conforming offers, the
conditions in the tender documentation should describe how the client will treat late tenders and
non-conforming or alternative offers
70. Opening and recording tenders:
Tenders should be opened and recorded in a way that maintains the security of the tenderer’s intellectual property
and that offers no advantage to one tenderer over another. It is good practice to open and summarise tenders as
soon as possible after the closing time. The tenders should be opened, checked and recorded by at least two
people.
Non-conforming tenders
Tenders which fully comply with tender requirements should be given preference. The clinet may consider non-
conforming tenders where the tenderer can demonstrate that
their bid will be more cost effective without jeopardising the desired outcomes and levels of service; and
the rights and interests of both parties are protected; or
superior levels of service can be achieved whilst conforming with (a) and (b) above; or
new cost effective technologies, procedures or techniques are offered which can meet the requirements of (a)
and (b) above.
Tenderers who seek to reduce costs by compromising workplace health and safety, service or other factors which
72. TENDER ANALYSIS
The importance of assembling an experienced and competent tender evaluation team is critical to the
success of the tender process. Above all, a consistent approach to the evaluation of all tenders is
required.
After receipt of tenders, submissions are comparatively assessed against the Criteria for Selection
defined in the tender documents.
Tenders are likely to contain significant differences, particularly in areas of design, time, cost, risk
allocation, durability and operation.
Tenders may also differ in terms of certainty of delivery and clarity of content.
A tender that does not comply with the tender documents should be rejected.
If a tender is rejected, the reasons for such action are to be clearly documented and communicated to
the tenderer
73. TENDER CLARIFICATIONS
The evaluation team may seek clarification of any issues from applicants,
verbally or in writing, but may not solicit new information.
The tender clarifications need to be carefully managed to ensure that
confidentiality is maintained and tenderers are treated equitably and ethically
74. TENDER SELECTION AND AWARD
The client should ensure that unsuccessful tenderers are advised in writing that
their tenders have been unsuccessful.
In the finalisation of the contract documentation, the client and successful
tenderer shall ensure that the contract incorporates the tender submission of the
successful tenderer and any qualifications during the tender process.
It is noted that this phase of the process is to settle all outstanding technical,
commercial and/or legal issues necessary for finalisation of the contract. It is not
an opportunity for either party to vary the final contract price or to materially alter
the proposal
75. Tender evaluation
An evaluation team will examine each tender received and make recommendations as to which
tender represents the best value for money. Once the contract has been finalized and work has
been awarded, both the successful and unsuccessful tenderers will be notified.
Once the final decision has been made on the tender award to the particular contractor, the tender
administrator creates the tender results notification which is in letter form and then sent to all participating
contractors.
Once the client or government accepts a tender, it 555555555555555555554is binding on both parties.
This means that the agency or company that won the tender has to provide the goods or services in the
manner agreed to and at the price offered, and the client/government must pay the agreed price at the
agreed time. The tendering process in construction is complete with tender awarding.
