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Tender is an open invitation to any qualified individual or company. It involved process and several documents in offering a tender or winning the tender. The tender process is between client and contractor. However there are terms and conditions to be fulfilled to meet the certain standard by the local authorities. The purpose of these standards is to regularize all the tender documents for ease in tender evaluation. The contractor needs to follow the standard or outline provided by the client or previous tender document in order to be selected for evaluation.
The client is the organization or government or any private sector who offered the tender to the contractor. The tender is made when there are projects or services to be done. Services that usually clients offer such as cleaning services, maintenance of buildings/roads, running canteen/cafeteria and landscaping. Thus, we will be discussing more on tender offered in construction industry. The flow of the tender process is basically the same but differs due to various acts. The client's objective in inviting the contractor is to give them several choices on cost, quality and expertise offered by the contractor who try to winning the tender. The advantages to the clients are they able to choose as minimum cost at very satisfied level of services that can be obtained from the contractor. Local city councils like MPJBT and Malaysian Public Works Department (PWD) or JKR and also UEM Land Holding Berhad are some examples of clients.
On the other hand the supplier is the contractor who applies for the tender. Usually there will be several company who try to win the tender by bidding the best price and services that they are capable to offer. The contractor would prepare tender documents and submit it to tender box prepared by the clients. Experienced contractor are preferable by the clients since the previous projects show their ability to complete it as the client want. New contractor able to win the bid if the tender document managed to tackle the tender evaluator. It's all depends on the background of the contractor financial and performance. The contractor may be from an independent or big company.
Under the enforced law and act the benefits on both parties are well being taken care off. These law and act prevent any cheating or mislead action from clients and contractors, hence promotes a good communication or agreement. There are many cases occurred when one of the party try to disobeyed the law. The problems start when the project did not complete on time, the cracks existence at new build building etc. When the contractor tries to reduce the cost of project, they will try to change the quality of the material in order to cut cost but give them higher profit. Standard Form of Contract to be used where Drawings and Specifications Form Part of the Contract from PWD Form 203 consists several clauses to ensure the above and other mislead action did not happen.
Closing tender is the due date for the contractor to submit the tender document to the client's company. If the tender received after tender closing date, it may be considered as invalid tender. The validity of the tender depends on the requirements or decision of the clients. The closing tender are informed early together when tender were advertise or open up to public. The purpose of it is for ease to the clients to start selecting the winner bidder for the tender. The faster the evaluation process end, the faster the contract between the client and the chosen contractor may be signed. Example of the tender:
Evaluation of Tender
Tender evaluation process enables to look up the entire tender submitted at the tender box. Tenders are being detailed evaluated and all the specification listed is being insured to have requirement needed in the project. The tender will be evaluated by the tender evaluation committee. Evaluation committees will evaluate all tenders based on the criteria set in the tender document. Normally, the evaluation is done by two separate committees, which are Technical Evaluation Committee and Financial Evaluation Committee. The final result will be done by Board of Tender.
The Evaluation Committee
Technical Evaluation Committee
Financial Evaluation Committee
Board of Tender
Stages of Evaluation:
Tender Schedule Preparation
There are some conditions to be complied for the tender evaluation committees:
Tender to be considered is restricted to the tender which was opened and listed in the tender schedule only
No changing of content shall be made â€‹â€‹upon submission
No alternative tender is allowed if not provided in the tender documents
No communication between the tenderers may be made
Evaluation of tender are made with:
Completeness of the tender
To ensure all the client need are provided and the regulation is obeyed
Reasonableness of price offer
Financial contractor be considered to ensure that the work can be carried out to complete the work that will be awarded
Contractor's previous performance can reflect their experiences
Physical sources and human resources
Analyse if the project at hand allows new work to taken
Relationship between client and contractor
Award of Tender
After the process of tender evaluation, the committee will choose a winning contractor with the price given by the contractor near to the price expectation form the client. The notice will be informed to both successful and unsuccessful contractor by using letter. These are some of the information when contractors who submit the form of tender to the client receive the reply of the client:
Award notification letter
The winning contractor
The score for the winning contractor and the explanation of the winning situation
The reason for making the decision
The winning contractor has to submit the evidence require to confirm the declarations made in the tender submission form within 15 days and prepare the document require. The contractor fail to prepare the document will be lost the chance for getting the offer from the client. And the contractor need to sign the contract with the client within 15 days from the letter of the award tender had been sent to the contractor.
In this stage, the client and the contractor responsibility in the process should be take part. Both of the client and contractor also have to make sure the contract management is check carefully. The knowledge transfer from the project team to contract management team needs to take part in the management of the contract so that the contract management can be done successfully. If necessary, the sub-contractor needs to be determine and having the contract with good communication between main contractor and sub-contractor.
If the winning contractor not able to continue the requirement document from the client, thus the second highest mark from the tender evaluation will be getting the offer from the client. The winning contractor is recommend without change the content in the tender document because it will affect the quality of the project that need to be done with some standard, for example, in the dam construction site, the quality of the material should be taken carefully to avoid the unsafe condition occur.
The contracting authority also has to examine the evidence submitted by the contractor in order to signing the contract. The contract is awarded to the contractor under financial agreement which has been concluded, so the contracting authority cannot notify the successful contractor.
Beside this, the unsuccessful contractor have chance to object the decision making from the client with a given period of 10 to 14 days from the date of tender notice given from the client. But the objection is done without changing the content of their tender document.
The winning situation for the winning contractor is shown in the tender notice is for the reason of making the process of the tender as open as possible or without any improper way for getting the tender and it also can give other contractor to get better understanding in order to get the tender offer and improve the market competitive between the contractor. It also can make the unsuccessful contractor to improve their weakness in order to have better communication, to maintain the good practice process and good working relationship with the client.
Two contractor is awarded in this activity is not recommend which two contractor negotiate with each other. The action of making two contractors negotiate in one time is wasting the time and unprofessional.
From the process choosing the suitable contractor in the conduction project, it involves many processes like tender advertising, tender document submission in the tender box, tender opening, tender evaluation and award of tender. In these processes, a suitable contractor is chosen and the contractor has to signing the contract with the client.
The closing of the tender is the due date of the contractor to submit their tender document. The contractor cannot submit their tender document after the due date of the submission.
The winning strategy of the tender is based on the financial stability, previous work performance, price given in the tender form, the quality of the previous work done by the contractor, the communication ability between contractor and client, current workload of the contractor, the resource of both material resource and manpower resource and last but not least the safety performance of the contractor.
The highest mark of the contractor will get the offer from the client. The contractor needs to complete the requirement of the client before due date in order to get the contract. The winning contractor will also display in the tender notice.
Lastly, a good construction work need proper communication between contractor and client and it also need a good management of the project so that the structure build is safe.