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GPQS 13
Tendering, Bidding & Contracting

ASSIGNMENT
Success of a construction contractors organization depends on acquiring right
type of work, at the right time and for the right price. Keeping this in view explain
how you will proceed, as In-Charge of the Tendering Division of Construction
Company, to prepare a tender for a major bridge (or highway) work for submission
to a client. What all instruction you will be giving to the bidder, how you will be prequalifying the bidder and awarding the work. Explain in detail.

The role of the contractors estimator is vital to the success of the organization. The
estimator is responsible for predicting the most economic costs for construction in a
way that both clear and consistent.
THE MAIN ROLE OF IN-CHARGE OF TENDING DIVISION
The role of the Bid Manager/Estimator to smoothly manage a response to 'Request
for Tenders' (RFT) or 'Request for Proposals' (RFP) issued by purchasing authorities
and ensure that the solution proposed is complete and appropriate and results in the
best proposal possible.
Reviewing enquiry documents to establish a bid strategy and maximise the
probability of success.
Supervising the preparation of tenders and ensuring that the tendering team has a
full understanding of the bid conditions and of the company procedures, and ensure
that the tenders are submitted on time.
Supervising price build up to establish a realistic cost estimate with adequate
provision for project risks and incorporation of current costing rates and, in
collaboration with the Commercial Director and the Business Managers, ensure that
the price is in line with the target set.
Continually reviewing the bid management processes, updating and revising as
necessary, to ensure the process meets the client and Company requirements.
Negotiation with customers and suppliers to agree terms acceptable to the customer
and Company. Developing and maintaining relationships with suppliers in
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conjunction with the Procurement and Sourcing Department, communicating

requirements to and negotiate with partners in other areas of the business to
adequately resource tenders. Producing management reports in a timely manner as
required.
This is a key role in the whole process as it over-arches all other roles; the Bid
Manager must assess what information is required, coordinate the response material
from all parties involved (including sub-contractors and joint partners), and ensure
that the completed submission puts forward the best possible response in terms of
completeness, appropriateness and that it demonstrates the best added value options
to the purchaser. The Bid Manager must also make sure that deadlines are met as
well as manage graphic design and visual presentation of hard copy and digital
versions of the response documents.

PREQUALIFICATION PROCESS
Pre-qualification is a process of evaluating and determining the competency of
companies that appear qualified to perform construction services that meet the
owners expectations for such services.
In the design of a pre-qualification system for publicly bid construction works, the
following
elements should be included and are considered to be fair and objective measures of
the applicants qualifications:
Experience: The contractors direct or relevant previous experience in completing
similar work should be considered.
Resources: The amount of resources the project will require compared to the total
resources the contractor has available should be considered.
Resources include: financial, manpower, lists of management personnel, backup
management personnel, resumes, key personnel lists, equipment, bonding and
insurance capacity, information/communication systems used and the capacity to
complete the work.
Litigation: The past and current history of the company record of litigation, claims
and conflict resolution should be considered.
Safety Qualifications: The company safety record, safety training programs, safety
awards earned and EMR (Experience Modification Rating Factor) should be
considered.

TENDER PROCESSES FOR A MAJOR BRIDGE

The tender process, which ends in the award of a main contract to the contractor, is
complex and generally follows four distinct steps.
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Step 1:
Subcontractor and supplier are invited by contractors to prepare tender prices for
specific project activities and materials. Structure of a bill of quantities allows a
relatively easy break-up of a bill into specific trade sections for use by bidding
subcontractors.
Subcontractors and suppliers of materials prepare tender prices and quotation and
submit them to bidding contractors.
Step 2:
A contractor complies a tender either from prices submitted by subcontractors or
from quantities in a bill then submits a tender to the client.
Step 3:
The project manager evaluates submitted tenders and recommends to the client a
tenderer with the best tender price. The client notifies the best bidder of acceptance
and in doing so awards a contract to the winning contractor.
Then term best tender has different meanings. Some clients relate it to the lowest
tender, some interpret it as most competitive tender, ..etc.
Step 4:
After the award of the main contract, the winning contractor selects subcontractors
and suppliers from those who has submitted the bid prices to the contractor during
tendering. The contractor now in a strong position to negotiate competitive prices
with subcontractors and suppliers. If the client forced bidding contractors to lower
the bid price though bid shopping, it is quite likely that the winning contractors will
apply the same bid-shopping practice to sub-contractors and suppliers to recover the
foregone profit.
THE BID PLAN
An effective bid plan to be prepared and implemented by Estimator among the
bidding team, following are the major issues to be address in this plan.
A summary of the submission terms: Most tenders have clear and absolute terms
for submitting a document varying from colour of ink, font size and structure, to
delivery times. These terms should be clearly listed to ensure compliance. Buyers
can reject tenders on the basis of not complying with these terms without even
looking at the evaluation criteria.
Bid team: Names, roles and responsibilities, timescales and contact details with
respect to their previous experience in Bridges.
Bid timetable: Include a timetable of all tasks to be completed including key
review points and the resources allocated to each. If there is a requirement to inform
the tendering body that you intend to submit a tender document, make sure you do
so. This will ensure that you are kept up to date with any tender changes and any
clarification questions which may be asked.

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Mandatory requirements list: Create a list of all mandatory and response

requirements specified by the Buyer within the tender documentation. Include in this
list all the returnable forms and schedules which need to be signed. Tick off each
requirement as it is included within the tender response.
The evaluation criteria: Include details of the criteria to be used during the
evaluation. It is important that everyone bears these criteria in mind in completing
their input.
The winning strategies: List the winning bid strategies, which have been identified
as the key reasons that the Buyer should select your company for the contract. Not
only should these strategies be documented as Why Us? statements, but examples
and evidence should also be brought into relevant areas of the main tender response.
Equally any weak areas should be noted and ways of mitigating these identified, so
they can be incorporated into the bid plan as well.

TENDERING METHODS
Major bridge tender shall be submitting by selected contractors having sound
experience in bridge construction.
Following are the standard method of tendering;
In Bridge construction, the main tender process is generally for the selection of the
Bridge contractor that will construct the works. However, as procurement routes
have become more complex, so tenders may be sought for a wide range of goods
and services (for example on a construction management contract the works are
constructed by a number of different trade contractors each contracted to the client)
and contractors may take on additional functions such as design and management.
There is also an increasing tendency for suppliers to be aggregated into single
contracts, for example, 'integrated supply teams' on public projects may include; the
main contractor, designers, sub-contractors, suppliers, facilities mangers and so on.
Irrespective of the nature of the goods or services that are being sought, the process
for securing tenders may take a number of different basic forms:

OPEN TENDERING
Open tendering allows anyone to submit a tender to supply the goods or services
that are required. Generally an advert will be placed giving notice that the contract is
being tendered, and offering an equal opportunity to any organisation to submit a
tender.

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On larger projects, there may then be a pre-qualification process that produces a

short-list of suitable suppliers who will be invited to prepare tenders. This sort of
pre-qualification process is not the same as selective tendering.
Open tendering has been criticised for attracting tenders / expressions of interest
from large numbers of suppliers, some of whom may be entirely unsuitable for the
contract and as a result it can waste a great deal of time, effort and money. However,
open tendering offers the greatest competition and has the advantage of allowing
new or emerging suppliers to try to secure work.
For a more detailed description of the procedures for open tendering see Tender.

SELECTIVE TENDERING
Selective tendering only allows suppliers to submit tenders by invitation. A preselected list of possible suppliers is prepared that are known by their track record to
be suitable for a contract of the size, nature and complexity required. Consultants or
experienced clients may maintain approved lists of prospective suppliers and then
regularly review performance to assess whether suppliers should remain on the list.
Selective tendering can give clients greater confidence that their requirements will
be satisfied and should reduce the wasted effort that can be involved in open
tendering. It may be particularly appropriate for specialist or complex contracts, or
contracts where there are only a few suitable firms. However, it can exclude smaller
suppliers or those trying to establish themselves in a new market.
See selective tendering for more information.

NEGOTIATED TENDERING
Negotiating with a single supplier may be appropriate for highly specialist contracts,
or for extending the scope of an existing contract. It can reduce the costs of
tendering and allow early contractor involvement, but the competitive element is
reduced, and unless the structure of the negotiation is clearly set out there is the
potential for an adversarial atmosphere to develop, even before the contract has been
awarded.
See negotiated tendering for more information.

SERIAL TENDERING
Serial tendering involves the preparation of tenders based on a typical or notional
bill of quantities or schedule of works. The rates submitted can then be used to value
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works over a series of similar projects, often for a fixed period of time following
which the tendering procedure may be repeated.
Serial tendering can reduce tender costs, and may encourage suppliers to submit low
rates to secure an ongoing programme of work.

FRAMEWORK TENDERING
Clients that are continuously commissioning work might reduce timescales, learning
curves and other risks by using framework agreements. Such arrangements allow the
client to invite tenders from suppliers of goods and services to be carried out over a
period of time on a call-off basis as and when required.
Framework tender documents are likely to include a request for schedules of rates
and time charges and a breakdown of resources and overheads to be applied
(including any proposed subcontractor or sub-consultant details).
One or more suppliers are then selected and appointed. When specific projects arise
the client is then able to simply select a suitable framework supplier and instruct
them to start work. Where there is more than one suitable supplier on the
framework, the client may introduce a secondary selection process to assess which
supplier is likely to offer best value for a specific project. The advantage of this
process to the client is that they are able instigate a selection procedure for
individual projects without having to undertake a time-consuming pre-qualification
process. This should also reduced tender costs.

SINGLE-STAGE AND TWO-STAGE TENDERING

Single-stage tendering is used when all the information necessary to calculate a
realistic price is available when tendering commences. An invitation to tender is
issued to prospective suppliers, tenders are prepared and returned, a preferred
tenderer is selected and following negotiations they may be appointed.
For more information see Single-stage tendering.
Two-stage tendering is used to allow early appointment of a supplier, prior to the
completion of all the information required to enable them to offer a fixed price. In
the first stage, a limited appointment is agreed to allow work to begin and in the
second stage a fixed price is negotiated for the contract

PRE-TENDER INTERVIEW

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Following an assessment of the pre-qualification questionnaires submitted by

prospective tenderers, an initial short-list of prospective tenders may be invited to
attend pre-tender interviews before they are invited to tender.
A pre-tender interview is an opportunity to:

Assess the tenderers understanding of the commission.

Assess the tenderers likely approach to the project.
Assess the tenderers current workload.
Assess the tenderers enthusiasm.
Clarify ambiguities on either side.
Verify that the proposed timescale for the tender process is achievable.
Verify that the proposed nature of the tender process will obtain the best results.

Price does not feature in the pre-tender interviews as tender documents have yet to
be issued.
Discussions held during the interviews may result in changes being made to the
tender documents or to the length of the tender period. It can be in the interest of
client to make these changes as it ensures that they get the best value and most
accurate tenders possible.
The interviews will normally be arranged by the contract administrator. They may
include presentations by prospective tenderers, followed by questions from a small
panel. The panel should agree in advance the nature of questions to be asked of each
consultant based on an assessment of their pre-qualification questionnaires. Answers
may be scored and weighted, and sufficient time allowed between interviews for
scores to be compiled and considered. This allows an objective appraisal to take
place and also allows a consensus opinion to be formed, rather than having decisions
driven by a single person.
Pre-tender interviews should be carefully managed so that tenderers are not made
aware of who the other tenderers are, as this may impact on the competitiveness of
the tenders they submit. This may include arrangements in relation to timing, car
parking, waiting rooms and signing in books as well as the removal of any materials
left by at the interviews by tenderers.
If the pre-tender interviews reveal that one or more prospective candidates are
unsuitable, the initial short list may be reduced and the remaining candidates invited
to tender.

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EVALUATION OF TENDERS
Assessments that identify the tender that best meets the clients needs and offers the
best value for money can be more beneficial in the long run. This is sometimes
referred to as the most economically advantageous tender (MEAT) approach as
opposed to the lowest-price approach.
The client's needs, priorities and definition of value will be unique for each project,
and so assessment criteria will differ from project to project. During the prequalification process, assessment criteria are referred to as selection criteria
whereas during the tender process they are referred to as award criteria.
Typically, assessments might consider some of the following criteria:

Price.
Relevant experience.
Understanding of the requirements.
Past performance.
Technical skills.
Resource availability.
Management skills and systems.
Proposed methodology (this might include mobilisation plans, design
proposals, and non-compliant proposals if these have been allowed).
Compliance with the requirements set out in the invitation to tender.

NB it may be appropriate for some of these criteria to be assessed at prequalification stage, rather than at tender assessment.

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