Construction Tender Process

Tender steps between Client,

Contractor and Subcontractor
Dr A Kimmance
Planning and Design Stages in the
Construction Process Contractor

Contractor Tendering
Planning Bidding Construction Lessons
Phase Phase Projects Learned

Contractor Start-Up Hand Over

Design Mobilization Closure
Phase

Each stage has a systematic set of interfaced proceedings,

events, activities and processes.
Clients Tender Invite Process
Instruction/Invitation to Tender sent to contractor (need to
identify which tender approach as they are different)
Contractor receives the request for bids (open or selective)
Tender Assessment by Contractor (strategic board review,
dependant on size of project and tender type)
De-briefing of tenderers (scrutinise)
Client issue Letter of Intent (may be optional, depending on tender
type, selective or open)
Award Construction Contract
Project, Goods and/or Services delivered (depending on contract to
be used; (lump sum, cost reimbursement, etc)
Project Payment and statutory document realized
Project Closure
Client Tender - Invite Contractor
Invites contractors (open or select contractor) to submit
the price for which they are willing to carry out a project
(e.g., business, technical, economical, management)
Typically depends on type of competitive, open or selective
tender; contractor relies on level of information contained in
tender, pre-lim drawings, specifications , bills of quantities
prepared on behalf of the client (e.g., architects, consultants).
Tender type (dictates the level of design, cost and construction)
Open (anyone, may include 2 stage pre-qualification )
Selective (usually have worked with the client)
One or two stages, closed (combination)
Clients Process - Approach

Client advertises openly in press or trade publications inviting

contractors to apply for the project
Contractor that is able to under take the project would request a
tender document (depending of type of tender)
After receiving the tender (open or selective) from the client (e.g.,
clients architect, design team, procurement department),
contractor may need to give deposit to ensure a bona fide tender.
Filter out the contractors who are not interested in submitting a
tender.
Open tender is sent to contractor, treated as offer to do work for
assured sum of money, generally preceded by a prequalification
document and statement of works, lists, requests, etc.
Typical Tender Process - Contractor

1) Introduction to Tender (purpose reviewed at board level to attain

decision)
2) Project background (scope , location, size), quantity Survey
3) Legal issues (type of contract), Tender scrutiny
4) Maintaining issues (acceptance criteria)
5) Contractor / Supplier response required (contract period; topically
90 days)
6) Timetable for choosing contractor / supplier (program, planning &
scheduling)
7) Requirements (standards, specifications, IT, resources)
8) Preliminary Designs (basic schematics for taking off)
9) Bill of Quantities (high level quantities and measurements)
10) Miscellaneous: Other Issues (risk, quality H&S, performance,
control, etc)
 Making Assumptions

It is assumed that the contractor possesses the in-

house capacity to carry out for example; all designs,
bills of quantities, topological, geographical and site
surveys , sewerage and drainage (utilities).
The contracting company possesses the equipment
necessary to carry out basic tasks with its own
specialized equipment such as haulage, cranes, JCBs
and scaffolding.
Contractors Process High-Level
Typically starts with contractor reviewing / planning tender
(systematic scrutiny of tender documents)
Typically involves site survey to establish project scope,
type, location, geotecs, cost estimate and quantity take offs
Planning Tender & Building Site Survey (contractor)
Bill of Quantity:
materials,
resources (technical abilities)
Equipment (plant tools)
Labour
Construction Tender - Road Example

Contractor / trade contractor collects information needed to

work out the tender bid, and then complete the bid.
Completion of the bid takes place primarily by filling in bid
schedules and drawing up a covering letter to the client.
Information in the covering letter should included:
The basis for tender bid
Invitation to tender
Minutes from clarification meetings
Cancellation letters related to tender documents
Relevant legislation
Assumptions constituting the basis for the tender bid
Reservations if any and Submit
Relationship Between Parties

Construction
Procurement
Strategy
Construction
Road Sector
Bidding Contractual
Strategy Agreement
Supply Side
Market Mechanism

Client

Demand Side
Contractor Tender Documents
Contract Forms and Tender Stages
Legislation (legal department)
Governmental order typically on Fixed Price and Time or
target cost and CE
Clients Act (government) on Tender Procedures
UK / KSA / ASCE Directives
Governmental order on Quality Assurance
Insurances
All risks
Contractors insurance
Building site insurance (CDM & commercial)
Contractor Tender Documents

Building project specifications

Deviations from standard contract terms.
Are reservations accepted?
Time schedule (planning)
In compliance with Contract Codes
Realistic & Achievable
Bid schedules
Realistic quantities
Is the tender deadline realistic?
Is the bid acceptance period acceptable?
Are contract conditions acceptable?
Sufficient geotechnical analysis?
Tender selection criteria: Lowest price or competition on quality?