know about the tender procedures and methods to used

1. Measuring tendering and
estimating
T.Pavaruban
J/CE/14/04/18
CE-04

2. CONTENT
 Documentation required to support the
tender process
 Open and selective tendering
 Forms of contract

3. Introduction
This presentation is about:-
 what are Documentation required for tender process & what are
the document to used
What kind of method to use tender selections
1) Open tender
2) Selective tender
Type of contracts according to the following factors
1) Procurement type
a)Traditional method
b)Design and build
c)Management contracting
2) Payment type
a)cost plus percentage fee
b)cost plus fixed fee
c)target cost

4. Tenders documents may include:
A letter of invitation to tender.
The form of tender.
BOQ
Information to bidders & bid data
 Biding forms
Preliminaries: including pre-construction information and
site waste management plan (if required).
A tender pricing document (or contract sum analysis on
design and build projects).
Design drawings, and perhaps an existing building
information model.
Specifications

5. Open tender
Bidding process that is open to all qualified bidders
Tender usually published in the newspaper and internet
chosen on the basis of price and quality.
This is most effective way of obtaining many competitive rates.
Advantages
Any contractor can tender their work
No favoritism occurred
maximum competition
No commitment to tender, all tender received will be genuine.
Disadvantages
Client must bear expensive cost of tendering
The wrong contractor may be chosen because they are from
unknown background
Time consuming

6. Selective tender
A number of contractor of known reputations are selected
by the design team to submit a price of the project.
 The contractor who submit the lowest tender is generally
awarded the contract.
The number chosen to bid under this tender is little
they are chosen for their expertise and experiences
Advantages
As tenderers are known, selection of cheapest bid is not
as high a risk as in an open tender
Disadvantages
Limiting the number of tenderers may exclude new
bidders who may offer more innovative ideas or solutions.

7. Selective Tendering
Less risk to the client
Less chance of improving
contractors reputation
Encourages the use of
cover priced bids
Open Tendering
High risk to the client
Develop contractors
reputation
Reduces the use of
cover price by
contractors

8. Traditional method
In theTraditional Procurement
Design and build
Procurement
All design risk is ultimately
carried by the client
The major risks lie with the
contractor
Capable of obtaining the best
contract price for the full scope
of the works
The contractor assumes
greater financial risk and this is
often reflected in the price
It is not suitable for fast track
projects
Suitable for fast track projects
Client retains control over the
design team and quality can be
assured
It is more problematic to
control design and quality
Different between Traditional &design and build

9. The main advantages of using a traditional approach
to procurement are:
• accountability due to a competitive selection;
• competitive equity as all tendering contractors bid on the
same basis;
• design lead and the client is able to have a direct influence
which can facilitate a high
level of functionality and improve the quality in the overall
design;
• price certainty at the award of the contract;
• variations (changes) to the contract are relatively easy to
arrange and manage; and
• a tried and test method of procurement which the market
is very familiar with.

10. The main disadvantages of using a traditional approach
to procurement are:
•Tenders documents from an incomplete design can be
produced but can lead to less cost and time certainty, and
may lead to disputes;
• overall project duration may be longer than other
procurement methods as the strategy is sequential and
construction cannot be commenced prior to the
completion of the design; and
• no input into the design or planning of the project by the
contractor as they are not appointed during the design
stage.

11. The main advantages of using a design and
construct approach to procurement are:
• client has to deal with one firm and reduces the
need to commit resources and time to contracting
designers and contractors separately;
• use of a guaranteed maximum price with a savings
option split can stimulate innovation and reduce time
and cost;
• overlap of design and construction activities can
reduce project time; and
• improved constructability due to contractor’s input
into the design. The main

12. disadvantages of using a design and construct
approach to procurement are:
• client changes to project scope can be
expensive;
• difficulty in comparing bids since each design
will be different, project programmed will vary
between bidders,
• client is required to commit to a concept
design at an early stage and often before the
detailed designs are complete;

13. The main advantages of using a management
approach to procurement are:
• the client deals with only one firm, which enables
improved coordination and collaboration between
designers and constructors;
• works packages can be let competitively at prices
that are current;
• roles, risks and responsibilities for all parties are
clear; and
• flexibility for changes in design.

14. The main disadvantages of using a
management approach to procurement are:
• price certainty is not achieved until the final
works package has been let
• informed and proactive client is required.
• poor price certainty
• close time and information control required

15. Cost reimbursement contract
A cost-plus contract, also termed a cost reimbursement contract, is a
contract where a contractor is paid for all of its allowed expenses to a
set limit plus additional payment to allow for a profit
Cost plus percentage contract
Cost plus percentage of cost pay a fee that rises as the contractor's cost
rise. Because this contract type provides no incentive for the
contractor to control costs it is rarely utilized
Cost-plus-fixed-fee contract
A cost-plus-fixed-fee contract is a cost-reimbursement contract that
provides for payment to the contractor of a negotiated fee that is fixed
at the inception of the contract. The fixed fee does not vary with actual
cost, but may be adjusted as a result of changes in the work to be
performed under the contract.

16. Conclusions
Client has know
 what are the kind of contracting method used
 What are the method has satisfied his requirement
 What method is time & cost effective
 What kind of risk have to face in during the project period
 Finally the client has identified the most suitable
contactor selection method for his requirement

17. Reference
 Lecture notes
 http://www.construction-
innovation.info/images/pdfs/Research_library/ResearchLibraryC/20
06-034-C/reports/Report_-_Building_Procurement_Methods.pdf
 http://www.tutorialspoint.com/management_concepts/project_co
ntract_types.htm
 http://www.byggai.se/mats/cm1/ProcurementMethods.pptx