Introduction:
Tendering is getting bids for big projects, which a government agency usually does. The most important parts of the building tendering process are favoritism and crime when giving projects to architecture firms. A tender is an economic incentive to do work. During the early stage of this tender resolution, framers will be asked to submit waterproof tenders for construction at a certain time. In this article, we will learn about tendering process in construction.
Fig: Tendering Process in Construction
Courtesy: mjarrald.co.uk
What Is Tendering in Construction?
In construction, tendering is when a company that wants to buy certain goods or services asks potential suppliers to send in their bids to deliver those goods. A client’s request is called an Invitation to Tender, and the answers that interested suppliers send in are called tenders. In the bids, potential suppliers say how they will meet the client’s needs and how much they will charge for their work.
So, tendering is just the process of finding the company (suppliers) that will give us the goods/services/products that our company needs. There are both private and public tenders on the market, but the public ones are much more popular. It is because private companies are not required to do the bidding. So, they often work for years with the same suppliers.
Features of Tenders:
- The client sets the deadline, and all prospective contractors and suppliers must submit their proposals.
- All pertinent information, such as the type of materials to be used, the estimated project cost, etc., must be included in the bid (tender papers).
- After the bid deadline, the client reviews each submission against a list of criteria, such as cost and quality.
- Tendering begins with a call for bids or a proposal request (RTF).
- Tenders are reviewed publicly, and the winning firm is awarded the contract or project afterward.
- Tenders are usually posted in various local media and newspapers before being floated by the customer to give all interested contractors a fair chance to submit bids.
Types of Tenders in Construction:
1. Open Tender:
The public and private sectors often use an open tender as their primary tendering technique in the construction industry. To invite interested contractors to tender, the government or client publishes the tender offer in the local newspaper and media, providing detailed and crucial information about the proposed works. Suppose the tender document specifies that a particular agency or company must have a certain registration to submit a bid. In that case, the advertisement will only be sent to those organizations that meet that need. Earnest money is deposited to lessen the number of questions (for private & govt. projects).
It will be returned until a genuine tender is received and accepted. When deciding which contract or bid to accept, pricing is certainly only one aspect considered. The client is not obligated to take the lowest or any offer.
2. Selective Tender:
Selective tendering is the only way to get around the problems with the open tendering process. This method makes a short list of contractors who are asked to submit tenders. Elective tendering aims to improve the quality of bids and ensure that contractors with the right experience and skills can submit bids if the work needs to be done quickly and make the tendering process easier to handle and less of a burden on all parties involved. Such a list can produce with a reference from the client’s professional advisor, who knows the contractors or an advertisement in the newspaper (pre-qualification).
Until a real tender is accepted, it will be sent back. Even though the price is very important in deciding which tender or bid to accept, other things are considered. The client is not required to accept the lowest offer or any offer.
3. Negotiation Tender:
Negotiation tendering is used in the engineering and construction industries, from bidding to settling disputes. It is done through pre-contract negotiations and post-contract negotiations. Usually, there is only one contractor, but there can be up to three. Following are the steps in the negotiation process:
- Finding a good contractor to negotiate with by the employer.
- The contractor can be chosen from the employer’s preferences list or with the professional team’s help.
- A contractor is aware of what must be done. The following kind of contract can use negotiations.
- In this type of construction bidding, the employer and the contractor do business together for a long time.
- When the contractor gets some of the money for the project.
- There is a pressing need to start work on the site early and finish it quickly.
Tendering Process in Construction:
The following are the stages of the tendering process in construction:
i) Pre-Tender Stage:
After the client has an idea, the client will engage a consultant to continue the project discussion at the pre-tender stage. The consultant will perform their duties, offering advice, overseeing the contract and tender, and putting the concept into a drawing. The client and consultants will have a brainstorming session on the scope, timeline, and budget.
The most significant phase of a project is the pre-tender stage because it marks the beginning of the following stage. Project completion will only occur if the pre-tender phase is successful. It represents the initial stage or action in the construction tendering process.
ii) Tender-Advertisement Stage:
The tender advertisement is known as tender notice. Traditional tender notices are published in the newspaper serving the area. The basic requirements that should be in the tender notice are
- The name of the project.
- Tender legal paper cost.
- Both the architecture head and the sub-head are important.
- The place, time, and date when the official paper for the tender will be delivered.
- Its place, date, and time for submitting an official tender paper.
iii) Closing of Tender:
The date and time of the tender closing will be specified in the tender notification. Contractors and suppliers are deemed to decline to participate in tender unless their bids are received by the due date and time. Additionally, the tender’s validity period begins at this point. If at this point, a contractor or supplier decides they don’t want to participate in the tender process, they can rescind their tender documents.
iv) Tender Opening and Evaluation Process:
Quantity surveyors often manage the tender opening procedure. Proposals must be evaluated fairly and impartially that do not favor any one potential provider to maintain public trust in the bidding process. Most of the time, bids are scored using a set of standards that have already been established. A thorough review will be compiled as soon as feasible after the close of bids.
The evaluation results will be detailed in a report compiled by the Quantity Surveyor, complete with charts and figures to back up his claims. After reviewing all bids, the Quantity Surveyor will suggest one he believes is most suited to carry out the project’s execution.
v) Tender Award:
Every bid will be reviewed by a team of experts advising that the offered price is a good approximation. The authority issuing the bids will communicate the results of successful and unsuccessful bids.
The final tender notice is written on letterhead and mailed by the tender authority to every bidder. When a user assumes a tender, it links to both sets once the final result of the tender award to the particular architecture has been created. It specifies which winning bidder must bear the bulk of the reward.
Benefits of Tendering Process:
The following are the benefits of the tendering process in the construction industry:
- When you tender a construction project, you might charge more. It will make the project cheaper.
- Construction project management may reduce delays and ensure timely completion. It will save you and the contractor money.
- Contractors may propose cheaper bids during the tender process than the original budget estimate.
- By using a well-planned tender process, you can trust that all bids will reflect what is required for the job and that any delays will be attributed to outside factors rather than incompetent contractors.
- Tendering can help ensure that jobs are done on time and in a coordinated way, reducing the chance of delays and cost overruns.
- When tendering is done appropriately, clients have additional contractor selection possibilities. It can lead to a lower-cost, higher-quality building.
Conclusion:
In construction, the tendering process is important for finding the right contractor. The contractor must first register with the government and then send the government a tender. Government agencies and private companies will review the tender and choose one or more contractors to bid on the project.
References:
1. “Tendering in Construction: What You Should Know About the Process.” Archdesk, 12 Apr. 2022, archdesk.com/blog/project-management-construction-tendering-process.
2. M, Jannon. “What Is Tendering in Construction.” Buildxact US, 31 May 2022, www.buildxact.com/us/blog/what-is-tendering-in-construction.
3. Jeyakumar, Jeasika. “Tendering Methods, Procedures in Construction – Basic Civil Engineering.” Basic Civil Engineering, 15 May 2016, basiccivilengineering.com/2016/05/tendering-methods-procedures-construction.html.
4. Finch, Roland, et al. “Tendering for Construction Projects.” NBS, 15 Nov. 2016, www.thenbs.com/knowledge/tendering-for-construction-projects.
5. Johnson, Eve. “What Is Tender in Construction?” CPD Online College, 31 Aug. 2022, cpdonline.co.uk/knowledge-base/health-and-safety/tender-in-construction.
6. Admin. “What Is the Process of Tendering in Construction? [Complete Guide].” What Is the Process of Tendering in Construction? [Complete Guide], 22 Sept. 2022, www.constructionplacements.com/process-of-tendering-in-construction.
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