Tender process for construction projects

This blog describes the standard tendering procedure for any construction projects. 

What is Tender?

Tender is the set of documents released by the client to invite number of prospective contractors in response to which contractors submit their proposal to provide their goods or services.  

What is Tendering?

Tendering is the process in construction industry whereby client invites bids for planned project ranging from small to large-scale projects. This process is usually done to pick the foremost competitive contractor for construction works. 

Expression of Interest (EOI)

The first step in tendering process is expressions of interest, which allows the contractors to Before releasing the detailed tendering documents, a request form is sent by the client to contractors to express or show their interest in providing their services. 

Purpose behind sending EOI are to;

• Shortlist or pre-register the contractors for a subsequent bid.
• Create database of pre-qualified contractors for future references
• Identify potential parties who can fulfill the requirements

Invitation to Bid (ITB) or Invitation to Tender

Invitation to bid is a set of detailed documents provided to qualified bidders. ITB describes the proposed project in details as it includes written specification, terms and conditions for the specified work. The purpose is to obtain bidder’s price to finish the project. In ITB, bidders are only differ by the price they provide in response to invitation, as the details released to all bidder are similar. 

A complete set of bid documents might consist of the following;

• Letter of invitation to submit a tender
• Instructions to bidders 
• Form of Tender
• General Terms & Conditions to Contracts
• Book of Rules, Regulations and Procedures for Contractors
• Contractor Guide to Safety
• Project specifications
• Tender drawings
• Bill of quantities/schedule of rates
• Project Schedule
• Clarification form
• Bidders qualifications and bid evaluation criteria

Site Visit/Pre-bid Meetings

Before submission of bid, Bidders visit the proposed site location in order to inspect and examine the site, location and surroundings and satisfy themselves as to the nature of the ground and subsoil the hydrological, climatic and physical conditions, the form and nature of the site and the quantities and nature of the work and materials necessary for the completion of the works and the means of access to the site, and in general obtain all necessary information as to risks, contingencies and other circumstances which may influence or affect their Bid.

Site visit or pre-bid meetings are often scheduled by the client and also notified in bidding documents or bid addendum later after releasing ITB. In case of absence of such information from bid documents, bidders may request the client in written to get the schedule and venue of site visit.

Tender Submission 

Invited bidders submit their bid before bid closing date by online or offline mode as advised by the client. All the required documents are filled, signed and stamped as prescribed in instruction to bidders.

In general, followings documents might include in bid submission;

• Duly filled tender/bid documents along with price schedule
• Bid Bond/Performance Bond
• Project Execution Plan
• Construction Plan
• Project Schedule
• Resource Histogram for the proposed project (i.e. Manpower and Equipment)
• Organizational resource availability
• Organization chart
• Project Organization chart with CVs of Key personals 
• List of completed projects
• Method statements 

Moreover, An alternative bid/s with deviation in original bid specifications may also be submitted in case there is great cost difference without compromising in the quality of works. Such offer is only possible to submit if client has requested. In that case, alternative bid is accompanied with base proposal in separate envelop mentioning “Alternative Bid”.

Alternative proposals must highlight clearly:

• How each alternative departs from or qualifies any specified requirement or intention of the bid documents.
• Individual price variations for each alternative indicating whether it is an increase or decrease as compared to the base proposal, to enable client at its option, to adjust the proposal price where it considers an alteration to be acceptable.

Evaluation of Tender

Three stages of evaluation determine whether the bids satisfy the qualifications, technical, and financial requirements.

First, all Applications for Qualification must be reviewed in accordance with the requirements stated in the Invitation for Qualification Document. The Technical Proposals are assessed for applicants who receives at least “x%” of the overall Qualification Score.

Secondly, Technical Proposals comprising of the technical elements are assessed based on the quality and strength of the bidder’s response to the requirements for Basic bid mentioned in Clauses.

Thirdly, the Employer forwards to the Funder for approval the results of Technical Evaluation and recommendation to open the Financial Proposal Envelopes of those Technically Successful Bidders. Subsequently, the Employer continues with evaluation of Financial Proposals of the
Technically Successful Bidders.

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