Tendering

1. 1

2. It is an invitation from the owner to the contractor to
execute some work at specified cost in specified time.
It is published in the form of tender notice in news
papers, notice boards, leading magazines etc. according
to the cost of works. 2

3. OR
It is an offer in writing to execute some specified
works or to supply some specified works or to
supply some specified articles subject to certain
terms and conditions like rates, time limit etc.
between the contractor and the department or
owner party.
3

4. 1. Open / Public tender– An oral talk or written
document between the Engineer and the Contractor
for certain small jobs to be performed. Sometimes it
is advertised in India or Abroad up to 10000/- or over
& compulsory for public works.
2. Sealed tender—Invited for important or huge
projects; wide publicity is given; always written
documents are made.
3. Single tender—Invitation is given to only one firm to
render a service by quoting their rates. If the quoted
rates are high, it will be negotiated prior to the
agreement of the contract. 4

5. 4. Limited / Selected tender—This is direct invitation
only to a selected no. of contractors to quote rates for
supply of articles. This is ordinarily adopted in the
case of all orders having estimated value less than
Rs.10,000.
5. Negotiated Tender- It is advanced form of selective
tender. In this negotiation is done with one or at most
two contractors.
5

6. Procedure for inviting tender:-
1. Preparation of TENDER DOCUMENTS.
2. Issue of notice inviting tender or TENDER
NOTICE/ SHORT TENDER NOTICE/
QUOTATION.
3. SUBMISSION OF TENDER and OPENING OF
TENDER and SCRUTINY OF TENDER.
4. ACCEPTANCE OF TENDER / TENDER
REVOCATION and award of CONTRACT.
6

7. 1. The notice inviting tender in specified form like PWD 6
2. Layout plan, location of work
3. Division in which location is situated
4. Schedule of quantities of work
5. Nearest road/railway link
6. Set of drawings including working drawings
7. Availability of materials in the vicinity
8. Detailed specifications or reference to standard
specifications for each item of work
7

8. 10. Complete architectural and structural drawings
11. Schedule of tools & plant and other facilities to be made
available by the owner, indicating the conditions, hire
charges and place of delivery
12. Rate of supply of power and the point of supply
13. Location of water supply point
14. Time for completion and the progress to be made at
intervals of time
15. Conditions regarding employment of technical personnel
16. Weather conditions in the area
8

9. 18. Insistence on Income tax and sales tax clearance
certificate
19. Amount of Security deposit to be paid/ deducted from
running bills of contractors should be notified in the
tender call notice
20. Mode of payment for work done
21. Penaltyconditions forslow progressand delay in the
completion of work
22. Designation of arbitration (technique for the resolution
of disputes outside the courts)authority in case of
disputes
23. Amount of EMD and the form in which it is to be paid
9

10.  It is part of tender document. Tender form is printed standard form of
contract giving standard conditions of contract, general rules and
directions for guidance of contract.
 There is also a memorandum for giving
1)General description of work
2)Estimatedcost
3)Earnest money
4)Security deposit
5)Time limit in months /years
6)Column for signature of contractor before submission of tender,
signature of witness to contractor’s signature and signature of the
officer by whom accepted.
 The price of the tender form is given on the form. This printed form
and other documents are to be purchased on cash payment from the
office inviting tender during office hrs on all working days.
10

11. 11
BACK

12. Tender for work or supply are invited by issuing tender notice in
prescribed form. Following particulars are given in the tender notice.
1.
Name of the authorities(deptt.) inviting tender Exa: Govt. of Gujarat
Water Resources Organisation Public Works Department (PWD),
1. Name of work and its location
2. Estimated cost
3. Last date and time of receipt of tender
4. Period of availability of tender document or validity of tender
5. Cost of tender document
6. Time of completion and type of contract
7. Earnest Money Deposit to be paid & security deposit
9. Date, time and place of opening the tender
10. Designation of the officer opening the tender
12

13. 13

14. 14
BACK

15. Short Tender Notice
When work is to be completed very quickly
or no contractor prefers to accept the work,
after floating tender, then a notice with
short duration is again published by the
client. Such a tender notice is called
“SHORT TENDER NOTICE”.
The terms and conditions remain the same as that for
ordinary tender notice.
15
BACK

16. For small jobs, owner or engineer gives an offer to the
contractor for quoting rates for works and supplies
required.
No EMD is required for quotation.
Quotation
16

17.  It is a assurance or guarantee in the form of cash on the
part of the contractor to keep open the offer for
consideration and to confirm his intention to take up the
work accepted in his favour for execution as per terms
and conditions in the tender
 It is the amount of money to be deposited along with the
tender document to the department by the contractors
quoting a tender. In case of refusal, this amount is
forfeited.
 EMD of contractors whose tenders are not accepted will
be refunded.
 1% - 2% of the estimated cost of work is the Earnest
Money Deposit (EMD).
17

18.  Restriction on unnecessary competition: contractor with
low sound financial position may also submit tender with
low price which may late lead to great difficulties in
completion of work. Thus provision of EMD will restrict
competition among sound financial contractors who are
capable of completing work.
 Punishment: Contractors with no intension of work may
quote low rates. They may be punished by forfeiting EMD.
 Compensation: In case if lowest contractor refuses to do
work it may be allotted to second lowest contractor and
EMD will be forfeited from first lowest contractor
18

19.  Security deposit is the amount of money which is
deposited by the contractor to the owner before awarding
a work, whose tender has been accepted in order to render
himself liable to the department to pay compensation
amounting to the part or whole of his security deposit if
the work is not carried according to specifications.
 This amounts is generally 5% to 10% of estimated cost of
the project and is inclusive of the EMD already deposited
by the contractor along with the tender.
 This will be refunded after the completion of the project.
19

20. The contractor has to fulfill all the terms and conditions
laid down in the contract and maintain quality and speed
satisfactorily. If he fails to do so, a part or whole of the
SD is forfeited by the department.
If there is any fault in the construction and the
contractor refuses to demolish and reconstruct then the
department will carry out that work using the SD.
20

21. Following are the main reasons for security deposit:
 Deposit for loans: It serves as security against the materials or
the plants and machinery supplied by the department to the
contractor as a loan.
 Punishment: on incomplete work in time, use of inferior quality
of material, leaving work incomplete SD if forfeited as
punishment.
 SD is refunded after successful completion of work with in
specified time. It is refunded after the first maintenance is done
which is six months.
21
BACK

22. Submission of Tender:-
 Tender shall be submitted in various envelopes from 1 to 4.
ENVELOPE NO.1
 This contain the EMD in the form indicated in the tender
notice.
ENVELOPE NO.2
 Covering letter to the tender.
 Any comments which tenderer desires to make in form of
brief statement with reference to the items, clauses and
pages of the tender documents to which the comments
pertain.
22

23.  The solvency certificate from bank authorities.
 The latest income tax clearance certificate.
 A list of works of similar nature and magnitude carried out
by contractor in following Performa:
• Serial No.
• Name of work
• Cost of work
• Date of commencement
• Stipulated date of completion
• Actual date of completion
• Remarks, if any.
23

24.  Details of plant and machinery available, which the
tenderer proposes to use in this construction work in the
following Performa:
• Serial No.
• Name of equipment
• No of units
• Kind of make
• Capacity
• Age & condition
• Present location
• Remarks, if any.
24

25.  Details of technical staff who will be posted on this work
by contractor, if the contract is awarded to him, in the
following Performa:
• Serial No.
• Name of person
• Technical qualifications
• Experience
• Remarks, if any.
25

26.  Complete details of work in hand at the time of
submission of tender in the following Performa:
• Serial No.
• Name of work
• Date of commencement
• Location
• Tendered cost
• Value of completed work
• Stipulated (as per tender) date of completion
• Anticipated (predicted) date of completion
• Name of owner
• Remarks, if any.
26

27. ENVELOPE NO.3
 This contain the priced tender form with the signature of
tenderer.
ENVELOPE NO.4
 This shall be large envelope of adequate size and it shall
contain the above mentioned envelopes marked numbers 1,
2 &3.
 This envelope shall be properly sealed & shall be endorsed
on the out side face “Tender for the name of project.” This
envelope shall be deposited or mailed by registered A.D.
(registered acknowledgement) , so as to reach place on or
before date and time.
27
BACK

28.  All the tenders should be sealed and submitted to the
respective officer, before the time and date as mentioned in
the tender notice.
 At the described date, time and place all the received
tenders will be opened in the presence of intending
tenderers or their authorised agents.
 The rates quoted by the various tenders shall be read out by
the officer.
28

29. Following points should be observed while
opening the tenders:
1.The tender should be opened in public at ….on
…..in the office of the…..and rates will read out
in presence of the owner or committee
members and tenderers or their respective
representative as are present.
2. If the owner is not present, the architect
along with one assistant should open the tender.
The architect shall scrutinize the same, prepare
the comparative statements and forward them to
his client, with his recommendation as to whom
the work should be awarded and why. 29

30. 3. A record must be kept for the list of
tenderers and the money deposited by them.
The earnest money should preferably be
accepted in the form of bank draft.
4. The lowest tender should be accepted after
close investigating the reputation and
standing of that contractor.
5. It is essential to ensure that they have been
thoroughly checked and are without any
mistakes.
30
BACK

31.  List of all tenders received along with the details of EM
received should be prepared.
 It should be checked that every tender should be duly
signed by the contractor.
 The address of contractor should be clear and complete.
 Verification of contractor conditions should be done.
 Rates should be mentioned in both figures and words,
both should be same, if there is any difference lowest
should be accepted. 31

32.  Calculations done by contractor and the total cost
of the work should be carefully checked.
 After tender have been opened, a comparative
statement is prepared in presence of the tender
opening authority and got signed by them.
 Then compare the rates of various tenders in
respect of each item rate against the estimated
rate.
Scrutiny of tender cont.…
32
BACK

33.  Based on the comparative statement, usually the
lowest tender is accepted, while accepting the tender,
satisfy the
the tender accepting authority shall
following regarding the tenderers.
1) the financial status of each tenderer.
2) capacity to do the work.
3)past record as contractor such as
experience, procurement of labourer etc.
33

34.  For valid reason, a tender other than the lowest can be
accepted. The fact is to be recorded with full reasons. A
report on this to be submitted to the next higher authority.
A suitable reason is also mentioned in the comparative
statement. The tender accepting authority himself has to
sign the comparative statement and record his remarks.
 Two tenders have quoted the same lowest rates.
 When all the tenderers have quoted abnormally high rates.
 Sometimes only one tenderer may respond to the tender
call.
Acceptance of tender
34
BACK

35.  The owner calls tender by any means is merely (just) an
offer and he is entitled to reject it without any liability.
 In a similar way, the law has granted protection to the
contractor also. If after filling up the tender and before
its acceptance by the owner, the contractor comes to
know his mistake in filling or intends to withdraw from
the work, the contractor is entitled to revoke (officially
cancel) his tender.
 The section-4 & 5 of The Indian Contract Act deal with
the revocation of tender.
Revocation of Tender
35

36.  Mere proof of posting the letter of acceptance by the
owner before receiving the letter of revocation from the
contractor will be sufficient to extinguish (put an end)
the right of revocation of contractor, even if the letter be
lost in the post.
 In some cases, it is mentioned that the successful
contractor will be required to start the work and formal
contract will be signed later on. In this type of cases the
right of contractor to revoke his tender does not prolong
(extend the duration) until the formal contract document
is signed if the terms & conditions of the original tender
remain unaltered.
36
BACK

37.  "An agreement enforceable by law is a contract.”
OR
 For a CONTRACT to be valid, there must be an offer
from the owner in the form of tender notice to get
some specified work to be executed and there must
be an acceptance from the contractor to execute the
work, both the offer and the acceptance must be
definite and legal.
37
BACK