Project managment

Considering tenders

Opening tenders

Arrangements for return of tenders should be set out in the ‘Instructions to Tenderers’, giving both the place and latest time for receipt. Tenderers need to use secure means of delivery, and should receive a signed confirmation of delivery. It is usual to require tenders to be returned in sealed envelopes, marked only with the contract name and no means of identifying the name of the tenderer.
Arrangements should be made to mark each tender envelope with the date and time of receipt, and for the safe storage of same until opening is authorized.
Documents received after the closing time should be similarly marked and held unopened, until the employer decides whether they can be considered valid or not. Obviously common sense must be exercised; the employer will not wish to have a genuine bid invalidated by conveyance mishaps outside the control of a tenderer, such as a postal strike, or aircraft delayed. Once tenders are opened, no late delivery of a tender can be considered.
Tenders for large projects are sometimes opened at a public ceremony, the name and total tendered price of each tenderer being announced. This has the advantage that everything is ‘above board’ so that practices which could distort price competition are precluded. Also, contractors gain immediate knowledge as to how they stand with respect to getting the contract. In other cases, such as in local government, the practice is for tenders to be opened by a senior official in the presence of the chairman of the appropriate committee and others
according to the standing rules of the authority. Arecord is usually made of the tendered prices as opened and signed by one or more of those present.
The tenders when opened are then usually passed to the employer’s engineer for examination. The first step is to mark all documents with the name of the tenderer and list them. This list should be given an independent check so as to be certain that, if a tenderer says one of his documents has been missed, the employer’s officials can show it was not received. Once the list has been compiled, any document not returned by a contractor that should have been
returned, is noted.

Qualification attached to tenders

Some tenderers may attach qualifications to their tender, usually set out in their covering letter. Qualifications which simply refer to some minor interpretation of a statement in the documents can usually be left for later agreement.
But some qualifications may deal with a matter of considerable importance that changes part, or all, of the basis of contract as set out in the contract documents.
Some employers have rules which require qualified offers of this kind to be rejected out of hand: if so, this should be made clear in the Instructions to Tenderers.
An offer which is qualified in some important respect may give a tenderer an unfair advantage over other tenderers. For instance, a qualification that tendered prices are subject to increase if rates of wages ruling at the time of tendering increase, would invalidate a tender if the contract documents contain no such provision. On the other hand, a tenderer may submit a more subtle qualification, such as ‘Our prices are dependent upon being able to complete the contract within X months’, where the months X are less than the period for completion stated in the contract documents. The problems this can lead to are discussed in Section 6.9. A contractor can, of course, always submit an offer in accordance with the contract documents and add a second offer which proposes some reduction on the former offer if some qualifying condition is accepted.
Whether a qualified offer can be accepted or not depends upon the powers and restraints under which the employer operates. A private person or company, subject to no restraint, can accept any tender. But a public authority or utility will be bound by standing rules and perhaps EC or other rules also;
while a project funded by one of the international funding agencies may come under rules that preclude any qualification being accepted which could be inferred as granting a favour to one tenderer and not to others.
In some cases specific alternatives are allowed in the contract documents.
These most often refer to methods of constructing major temporary works, such as cofferdams for bridge foundations; river diversion works for construction of a dam, etc. The contractor may be required to quote a price for following a design shown in the contract drawings, but be permitted to offer an alternative design of his own. The option has to be made fully clear in the contract documents, and full details of the tenderer’s alternative design have to be provided.

Checking tenders

Detailed consideration of tenders will usually start with an arithmetic check of
the lowest three or four offers which are free of unacceptable qualifications. Any
arithmetic errors found should be dealt with in a manner which is set out in
the Instructions to Tenderers. Usually the unit rates quoted for items are taken
as correct, and all consequent multiplications and additions are arithmetically  corrected. Where this results in an alteration to the total tendered sum, either this altered sum is adopted, or the altered sum is brought back to the quoted tendered sum by inserting an ‘Adjusting item’ – the Instructions must state which. A reason for leaving the quoted tender sum unaltered is that the contractor’s estimating staff work out the unit rates, whereas the contractor’s directors will not check a tender arithmetically but will look at the total sum tendered to decide finally whether or not it is sufficient to cover the whole job.

The lowest three or four tenders are then checked for compliance with contract and other requirements, under the following headings:
• Compliance: conformity with instructions; completeness of entries; compliance with bond and insurance; absence of unacceptable qualifications, etc.;
• Technical: conformity with specification; proposals for materials; use of sub-contractors; temporary works proposed and methods of construction;
intended programme, etc.;
• Organizational: staff proposed, experience, responsibilities held, etc.;
• Financial: make-up of total price; amounts for items in Preliminaries; unit rates; exceptional prices, errors and omissions, etc.
In addition, if open tendering has been adopted, details of tenderers’ resources,
past experience, financial and other data will need to be examined. This work will be conducted in parallel with the checking of prices described below.

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