1. Engineering Project
Tendering

2. General principles in tendering
Money and time
Economic use of resources
Contractor’s contribution to design and contract
Production cost savings
Continuity
Risk

3. Preliminary enquiry(before Tendering)
Letter to the potential selected contractors asking them whether they are interested to tender
Typical information provided including
Employer, Consultants,
Location of site,
General description of works
Date of return,…and etc

4. Tender period Ample time must be allowed
Depend on any addendum will be issued
Normally four weeks should be allowed

5. Tender Documents Bills of quantities Drawings Form of tender
An addressed envelope for the return of the tender
Information and instructions for tendering

6. Information and Instructions for tendering
Date and time for the return of tender
Place where all other drawings may be inspected
Arrangements for site inspection
Time and place of opening of tenders
Instruction that contractors are to acknowledge receipt of all documents

7. Receipt of tender
The tenders should be opened in the scheduled time in the presence of employer’s and consultant’s representatives
Tender prices of the tenders are recorded.
Consultants should carry out tender appraisal subsequently

8. Question and Answer The lowest three or four tenders would be analyzed
Tenders would be asked to qualify or withdraw the qualification of some unclear items
Tender interviews would be hold amongst the client’s and consultants’ representative, and tenderer one by one

9. Report on tenders and acceptance
Tenderer would be recommended based on the price, planning, programme, financial, capability and competence
Contractor would be appointed upon client blessing is obtained
Letter of intent would be issued to the contractor

10. Tendering method Open Competitive Tendering
Selective Competitive Tendering
Negotiated Tendering

11. Competition and negotiation
The relationship between competition and negotiation
When to negotiate
The basis for negotiation
How to negotiate

12. Competition
Price
Quality
Design
Management
Time

13. Advantages of competition
Accountability
A true reflection of current market prices
Quotations easily define and measure
contract period,
design and management

14. Disadvantages of competition
A waste of resources
Restriction on full communication between design team and tenderers on details
The lowest tender price may be much greater than the cost plan

15. Negotiation
Pre-contract negotiation
Post-contract negotiation

16. Situations adopted Negotiation
Business relationship
Contractor-financed projects
Continuation of contract
Special circumstances
Special expertise or equipment
Tendering climate
Quick start

17. Basis for negotiation
Competitive price for similar work under similar conditions in another or previous contract
An agreed assessment of the estimated cost plus percentage of overheads and mark up

18. How to negotiate Equality of negotiators Parity of information
Structure of estimate
Apportionment of cost

19. Advantages of negotiation
Save time
Full communication
Progressive agreement is feasible
Elimination of many claim items

20. Disadvantages of negotiation
Possible unnecessary higher price
Loss of time if unsuccessful
Lack of accountability

21. Non-traditional arrangements
The work is not to be quantified and measured in a bill of quantities
Information for the contractor to carry out the work is same as traditional arrangement

22. Advantages of quantities system
Risk is lower for the contractor
Competition is fairer
Lower tenderers’ overheads during tendering
Allow the total price to be analyzed in great detail
Best means of cost control

23. Disadvantages of quantities system
Design must be substantially complete for measurement
For small jobs, it is inefficient
Some quantities are partially speculative

24. Specification-based documentation
Normal specification-based contracts
Performance specifications

25. Review The advantage of competitive tendering is?
Restriction on full communication between design team and tenderers on details and site operations
Resource in preparing several unsuccessful tenders can be avoided.
The lowest tender price may be much greater than the cost plan
Contract period, design and management can be easy to define and measure