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0% found this document useful (0 votes)
13 views8 pages

tender

Uploaded by

karanjar874
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Tendering

Procurement tendering is the process wherein the organization will invite


suppliers to submit their proposals or bids. The invitation that the supplier
will receive is usually called a request for tender (RFT). Tendering and
request for tender (RFT) are often used interchangeably.

A tender refers to a written document that describes the details of the


project and the work that it will involve. It is shared with the public to
attract bids from qualified contractors and suppliers. Clients may also
directly send invitations to tender to contractors and suppliers who are
eligible and willing to participate in the project.

A tender document is crucial in the tendering process because it provides the


ors and suppliers. A client must
consider pricing and quality when choosing contractors and suppliers for a
project.

What is the tender process?

A tender process is when the client invites bids from qualified and interested
contractors to carry out specific construction work packages. A tender
process begins with an invitation to tender.

Tenders are typically advertised through local media to give all interested
contractors equal opportunity to submit their bids, clearly indicating the
materials to be used and the .

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then evaluates all the proposals based on criteria such as quality and price.
After a public evaluation process, the tender process is concluded once the
winning contractors and suppliers are determined.

Importance of the tender process

The tender process is critical in construction because of the following:

Preventing bias: The bids in a tender process are evaluated based on


predetermined criteria such as quality and price, giving all interested
parties a fair chance of selection.
Value for money: The client can choose contractors and suppliers to
produce the highest quality of work at the lowest price point.
Healthy competition: The tender process encourages potential
contractors and suppliers to be more efficient and deliver the highest
possible quality of work while reducing operational costs and
inefficiencies. This helps create a competitive market as all the
potential contractors and suppliers aim to be more creative and
innovative.
Ease of entry for new firms: The tender process is objective and fair,
making it easier for new firms to enter the market as long as they meet
the predetermined criteria.

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Types of tendering methods

Open tendering method


Single-stage selective tendering method
Two-stage selective tendering method
Selective tendering for design and builds
Negotiation
Joint ventures

Open tendering method

Even though there are several types of tendering methods, this is the most
used tendering method for government projects. They use an advertisement
with the details of the type, scope and other relevant information in brief.
Then, contractors those who are willing to accept it, apply for the
advertisement. This procedure has many issues. It does not provide
reliability about the quality of the work. And the preparation may create
many expenses and losses. People have declined the use of this method
because of such disadvantages.

What are the advantages and disadvantages of the open tendering method?

Advantages of Open tendering method

High transparency and competition


Create opportunities (to more number of contractors)

All interested contractors are allowed to apply, thereby increasing the


ease of entry for new players in the market.
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The client obtains the best bargain possible.
The selection of contractors is without bias or favoritism.
Open tendering encourages competition among potential contractors
without obligating the client to accept bids.
It is suitable for the construction industry.

Disadvantages of Open tendering method

Can select a contractor who has no experience


Time consumption is more for the tendering process.
Unreliable competition

The tender list may be too long because the tendering applications are
open to all interested contractors.

tender documents but are not selected.


The contractors may offer a price without fully considering the details
of the contract. Therefore, the client may get seemingly reasonable
prices that do not reflect the actual price point of their project.
The client runs the risk of choosing a contractor offering the lowest
price and not getting the highest quality of work.

Single-stage selective tendering method

Initially, a limited number of contractors will be selected by the owner. If


the employer builds regularly, he will also have a short and approved list of
contractors unless he can use ad hoc lists where the names of the contractors
are mentioned who have proved their abilities and competency.

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What are the advantages and disadvantages of the Single-stage selective
tendering method?

Advantages of Single-stage selective tendering

Time consumption for the tendering process is low.


Can select a reliable, experienced contractor.

resources.
Reduces tendering costs because the client invites fewer contractors to
submit their bids.
It helps to save time because the tender process is shorter.
The client can select the lowest offer because only qualified
contractors are considered.
The tender process is easier to manage.
Reduced tender documentation because only a shortlist of contractors
is invited.

Disadvantages of Single-stage selective tendering

It presents a barrier or entry for other contractors, especially new


contractors. I.e. it lack competition
It increases favoritism. I.e. it can be biased.
The tendering period may be longer.
There is a risk that contractors may overprice their services.
There is a risk that contractors may collude.

Two-stage selective tendering method (Negotiated method)

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. In this procedure, the employer

responsibility for the design. Two-stage selective tendering consists of two


stages.

The first stage: This step includes the process of selecting a suitable
contractor and establishing the price levels using the collected information.
Those details should be strong enough to make such decisions.

The second stage: The selected contractors start the production drawings. As
a result of this stage, they complete the documentation of the contract after
making bills to include in it.

What are the advantages and disadvantages of the Two-stage selective


tendering method?

Advantages of Two-stage selective tendering

Time consumption for the tendering process is low.


Can select a reliable, experienced contractor for a reasonable price

Negotiated tendering minimizes the risk of failure in the construction


industry.
The tendering process is significantly shortened as the most suitable
contractor can be selected much faster.
The contractor is brought into the project early and can contribute
their expertise to the design.

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It is the best tendering method for particular circumstances, such as
during emergencies.

Disadvantages of Two-stage selective tendering

can be risky (at the negotiation stage)

This method increases the barrier of entry for new contractors and
reduces the availability of work for non-selected contractors.
Contractors are likely to quote higher prices than in more competitive
tendering processes.

Selective tendering for design and builds method

In this method, the contractor has two responsibilities. They are, designing
and building the project. He must give the services in a very professional
way. There is an agent for the employer, who is responsible for his
constructive interests and requirements. They present a price as a total
amount that must pay to carry out the project till the end according to the
conditions and policies in the contract.

What are the advantages and disadvantages of the Selective tendering for
design and builds tendering method?

Advantages of Selective tendering for design and builds

Can save the design time and cost


Less risk to the client.

Disadvantages of Selective tendering for design and builds


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Price may be high
Final quality may be affected.

Joint ventures

With respect to other types of tendering methods, this method is mainly


used for complex projects which determined as hard to handle. This is the
best solution for the problem of distributing liability among consultants and
contractors. It does not require to establish a special company for this
purpose, but it will be possible to do so. The parties those who are
participating must pay attention to the agreement before entering it.

The Stages of the Tender Process

The chart below shows the various steps that form a typical tendering
process for a large contract. Smaller value contracts may be simpler.

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