The Tender Activities And Contract Execution Construction Essay

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Stock procument means stocks of goods to the regular terms not defined in any particular order of the customer. important prerequisite is, you can predict demand. when processing procedure, the goods will be received from the purchase to the customer who placed the order. application of the customer's stock purchases one way is to define the minimum inventory level. if the inventory level falls below the defined limit, start the procurement process. this type of purchasing customers with a high degree of flexibility, but purchasing cost tends to be higher.

·Vendor Managed Inventory

By using the concept of vmi supplier is responsible for the company's stock. an important premise for streamline processes, reduce costs, and a high degree of flexibility is a close network of suppliers.

·Just in time procument

This integrated concept is based on the toyota production system. timely procurement is characterized by low stock levels at the customer's company. this leads to cost - cutting and streamlining and balancing process. timely delivery of meaningful business unit, if the vendor's maximum radius of about 100 km of the place, where the customer. during a period of global sourcing, therefore, set up a logistics centre in strategic areas close to the customer. successful implementation is very important for the timely procurement of construction of the installation and operation, turn off the network. therefore, communication, transportation and logistics processes and suppliers as well as quality management process is critical. the process requires perfect coordination.

·Just in sequence procument

This concept is based on the concept of normal time. it is to define the supply of goods in chronological order. this may be a very effective way of purchasing.

·Ship to line

Sent directly by the supplier of goods in the course of the last process of adding value to the first customer. this means that only need logistical steps to complete it.


Tenders are a buyer or contract will be prepared to buy a quantity of material and equipment including outsourcing outsourcing or content, the requirements of the proposed project, such as variety, specifications, quality, price, duration, and so on, by a notice or notices attract the seller, contractor or invited to tender, the last selected by the buyer or contract from which the selection of an act of the economy.

There are three types of tendering methods used in construction industry!

Open Tendering

Selective Tendering

3. Negotiated Tendering.

Open tender

It refers to the tenderer by newspapers and other media launch of tender information, provide an opportunity for all qualified contractors around the world at the notice address to receive or purchase information and pre - qualification form, competing bids made the award.

Are the main characteristics of the public tender :

Tendering parties to give equal opportunities to participate to bidders on a voluntary basis

To be more reasonable to the selected contractor, to a certain degree of preservation

Provided technical and financial conditions of the tender are not allowed ; the bidder must unconditionally as stipulated in the tender offer.

Open tender for the following projects :

By the International Development Association and the World Bank and its subsidiary organizations The International Finance Corporation to provide concessionary lending projects

Financial assistance by the United Nations projects ;

international consortium or more of the financial sector investment projects Project

Contractors - funded contract, or deferred payment of work Project

Large Civil Engineering or states of protectionism Construction difficult, the Contracting States in terms of technology and human resources There is no implementation of the capacity project

Selective tender

Selective tendering, also known as restricted tendering, it is generally not advertised in the press, but according to the tenderer experiences accumulating within himself,Related information on or provided by the consulting firm of contractors list to a number of those considered the most capable and credible contractors an invitation.After prequalification for invited people to inform its offer, submit a tender.

·Advantages : selected bidders in technology, credibility are relatively reliable, you can reduce the risk of default, and will save costs and simplify procedures, rapid turnover.

·Disadvantages : the tenderer understanding of the situation and the limited number of contractors, when the invitation is missing in technology and on price competitiveness of manufacturers.

·Selective tendering is mainly used in the following situations :

Quantity is not limited number of bidders or other items that should not be an international public tender.

Some large and complex project professional and very strong, probably the tenderer's not much, but going to the high cost of the tender, in order to save time costs,Get a better offer in the tender could be restricted to a handful of qualified contractors, so that each contractor has a chance to win the contract.

The urgent or for the duration of military requirement of confidentiality or any other reason not suitable for open tender in all aspects of the project.

Project too big, small and medium-sized companies up to, had to invite bids from a number of home projects.

Project announcement of tender is issued, no one bids or bid less than a quorum of at least three, the tenderer is available through selective tendering and then select few companies bid.

Ngotiated Tender

On the Standard, also known as negotiated tender, is the tenderer selected one or a few companies directly negotiated contract conditions and prices

Feature : No pre-qualification, opening process on the standard, simple way, through direct negotiations to the awarding,. On the standard for tenders people, have to produce tender guarantee,Needs not be responsible for its offer within a certain time ; mark on the competition less, the contracting parties the possibility of a deal.

Strictly speaking, of the standard is not a tender, but just a " contract ", used in international engineering contracting business actually less.

On the standard generally used for the following projects:

Implementation of the agreements concluded a contract ;

B specific needs can only be because of technical delegate Contractor or manufacturer for specific implementation of the contract ;

C belongs to the national defense needs work or a secret project ;

D project has been open tender, but no successful bidder or not Ideal contractor through on the label,Further delegate Contractor project ;

E new project owners contract.

d.Format contract

The type of contract, legally binding agreement, signed between the two sides do something or a project building, one of the parties have bargaining rights, and use it mainly for writing the contract.

Examples of adhesion contract is a standardized contract to provide the consumer with goods or services is intrinsically " lack of access to real negotiations on the basis of the consumer, will benefit from the terms of their interests. when this happens, consumers cannot obtain the required product or service, unless he's the default work contract.

There is nothing unenforceable or even wrong about adhesion contracts. In fact, most businesses would never conclude their volume of transactions if it were necessary to negotiate all the terms of every Consumer Credit contract. Insurance contracts and residential leases are other kinds of adhesion contracts. This does not mean, however, that all adhesion contracts are valid. Many adhesion contracts are Unconscionable; they are so unfair to the weaker party that a court will refuse to enforce them. An example would be severe penalty provisions for failure to pay loan installments promptly that are physically hidden by small print located in the middle of an obscure paragraph of a lengthy loan agreement. In such a case a court can find that there is no meeting of the minds of the parties to the contract and that the weaker party has not accepted the terms of the contract.

Procument methods

In any construction project it is important to choose the correct method of procurement of construction works. It is important not only to choose the right contractor, but the important thing is that the contract documents and the contract is the appropriate project. In the procurement process is used to obtain basic conditions for construction projects. It involves the selection of a contractual framework that clearly identifies the structure of responsibilities and authorities for participants within the building process. It is a key factor contributing to overall client satisfaction and project success. The selection of the most appropriate procurement method is consequently critical for both clients and project participants, and is becoming an important and contemporary issue with the building industry.

·Traditional Procurement System

The traditional procurement system remains by far the most popular method, followed by design and build. The other forms of procurement in aggregate only form a small percentage of construction transactions. The traditional structure for project procurement is seen as a sequential method because the employer takes his scheme to an advanced stage with his professional team before appointing a contractor. The designer is employed to advise the client, design and ensure that the work is kept within the cost limit and that it complies with the standards required. A Quantity Surveyor can be engaged to give guidance on design costs and budgets, prepare bills of quantities, check tenders, prepare interim valuations and advise on the value of variations. The contract price/sum is often based on a bill of quantities provided by the Quantity Surveyor which quantifies, so far as possible, every aspect of the works. Consultant structural and services engineers may be employed by either the client or his advisers to design the specialist parts of the project.


·The Traditional Procurement Method showing the contractual arrangements is shown below:














·Design and Build

Design - Build contract model " design-build, hereinafter referred to as DB mode since 20th century, 80Since early age in Western countries, because of its rapid development in the world, as well as unique in itself Some advantages.DB mode With a single responsibility, reduce management costs, shorten the duration, cost reduction and a series of advantages. Meanwhile, overseas DB research and application of the model has been very mature, from early to Modern theoretical research on large-scale demonstration Studies show that this model - specific advantages, promoting the wider use of IT in construction project.


·Client and Contractor in close cooperation, planning and inspection work to complete the project, reducing the costs of coordination and time.

·Early contractors to participate in its construction methods, materials, structure, price and market knowledge,Experience in the integrated into the design.

·To control costs, reduce cost. Overseas experience has shown that the implementation of DB mode, the average cost reduction around 10, and in DB mode, cost reduction of uncertainty, letting people know for certain Earlier,Better cost control.

·Conducive to the progress control, shorten the duration.

·Risk single.


·Details of the client for final design and control abilities,DB model is the client on the lack of control design pattern.

·The contractor's design has a big influence on engineering economy, in DB mode The contractor took on more risk.

·Construction quality control depends largely on the client when the bidding function describes the quality of the book.

The Design and Build Procurement Method showing the contractual arrangements is shown below:




Quantity surveryor






·BOT (build-operate-transfer)

BOT is an abbreviation for English build-operate-transfer, typically literal translation is " Build - Operate - Transfer ".Bot is essentially a way of investment in infrastructure, construction and operation, subject to an agreement between the government and the private sector,Issued by the Government to the private sector concession,Allow it to raise funds within a certain period of time building an infrastructure and management and operation of the facilities and the products and services.The government on the number of public products or services provided by the Agency and the price can be limited, but private capital has the opportunity to profit.The entire risk shared by the Government and the private sector in the process. When the end of the concession period,As agreed in the private sector to the facility over to the government departments, to the management and administration of government departments.

BOT to maintain the market mechanism to work.

Most of the economic behavior of BOT projects are conducted on the market, the Government to tender to determine whether the project company itself also contains the mechanism of competition.As the subject of reliable markets is the BOT mode in the private sector agents within the concession period to complete the building project has property rights.So, assume the BOT projects in the private sector in the implementation of BOT project of behavior is consistent with the hypothesis of economic man.

Bot for government intervention to provide an effective way,

This is about the BOT and the private sector to reach agreement.Although the BOT entirely by the project company is responsible for the implementation of the agreement, but all along the Government has control over the project.Three stages in the project, bidding, negotiation, the Government will play a decisive role.In the implementation phase, the Government has the power of supervision and inspection, formulation of the price in project management are also constrained by the Government,General BOT method allows the Government to constrain the behavior of the BOT project company.


·The BOT Method showing the contractual arrangements is shown below:

Concession Agreement





3.Case study

This case say a singaporean company proposes to build a 40-storey hotel with 2 levels of basements at city square, johor, facing the water front, making environmental factors and sustainability as key issues of design. the singaporean company is concerned about other aspects, among others. The proposed hotel is to be completed in 2015. The Singaporean company entered into a contract with Alpha Design Tech. Pvt.Ltd, a Singaporean design consultant. Alpha Design Tech is a Singapore based multi-disciplinary consultant with architects and engineers from Singapore, Thailand, Philippines, and Hong Kong.

i think the best system for this case is novated.The following are the novated system.



Design team

Main Contractor

Sub contractor

Sub contractor

Tender process

The bidding process will depend on the choice of procurement route. this will include contractors including compliance with european union directives short listing issue of tender documents, receiving bids, bidding for an interview and selection. as an alternative to the competitive bidding process, tender negotiations, it proved possible to get value for money is a better choice.

·Contractor Involvement

It is advisable to bring a contractor into the design team as early as is practical. The type of contract may dictate when this is possible, but there are a number of benefits to be gained, such as efficient material choices, early buildability advice, negating abortive design effort and specialist cost advise.

·Tender Activities and Contract Execution

There are numerous activities that lead to a contract signature and commencement of construction and all should be advised by the Project Manager and detailed on the master programme. Actions are initiated to provide cost savings should budget requirements dictate it.The programme should ensure that the client understands the terms of the contract.Arrangements are in place for formal signature and exchange of contracts. A letter of intent may be utilised to expedite a start on site if appropriate.

Form of contract

Standard Form contract, also known as the standard contract, stereotyped contract, is that if a party fails to advance the development of the terms of the Contract,The other contracts can only represent all agree or disagree.Therefore, for the format party not to develop terms of the contract, contract to set format, you must accept all conditions of the contract ;Contract or's only two types of standard formats, like secret contract for using a public or government - private sector project is PAM2006. project standard contract forms of international and national projects use the PWD.

·PWD-- These are the traditional forms of contract based on drawings and specification (203) or bills of quantities (203A) produced for use in public sector or government projects in both building and civil engineering contracts.Client is almost the majority of government departments.Is a type of construction contracts.

1. 203 (Rev 10/83)without quantities 2.203A (Rev 10/83)with quantities 3.203N (Rev 10/83)NSC 4. 203P (Rev 10/83)nominated supplier

·PAM--The Malaysian Institute of Architects (Pertubuhan Arkitek Malaysia - PAM) form of contract for building works are by far the most often adopted standard forms of contract used for building works in the Malaysian private sector. The clients are private enterprises.It is only apply to construction and the same type.

FIDIC--Fidic the original meaning refers to the International Federation of Consulting Engineers of the independent international organization. Sometimes also referred to as fidic terms or fidic methods used.

In order to ensure the smooth progress of the transaction, the majority of national or regional governments,Social organizations and international organizations have developed a standard tender procedure, the contract documents, the amount of work modalities for the accounting rules and umpire notice.Use these standard tender procedure, the contract documents for bidders are familiar with the terms of the contract, reduce potential risks taken into account when preparing tender documents,to reduce the price.When the event of a dispute, you can perform the contract files that are included with the dispute resolution provisions to deal with disputes.Standard contract between the parties to the contract conditions can be reasonable and fair allocation of risk and responsibility are clearly set out rights and obligations of both parties,Largely avoided because they do not perform the extra expenses and related contract dispute.

Fidic consulting engineers as an international authority on institutions,For many years the standard conditions of contract are written summary of the international engineering community for decades of experience,Justice stipulates the responsibilities, rights and obligations of the Parties to the contract, the program precise, strong operational.


Through the content as written above, let me know in the construction contract and some construction methods of the importance of the right of use. Only know about these, ubulog in order to work in the future, know how to go in a project and learning of each other, signing contracts and tenders or something

.Learning for international engineering contract and let me know what kind of contract to a variety of different projects need to constrain the construction behavior. This After I engaged in construction work, more know how to do.


Construction Contract Management ( Third Edition )/Written in 2011-01-01, the South China Institute of Technology Press

Construction Engineering bidding and contract management/Yang qingfeng in 2012-07-01, editor Machinery Industry Publishing House

Contract management of construction engineering bidding and construction management/Zhu Xiaoxuan, editor in chief Zhang Zhili Publishing House of Electronics Industry in 2009-10-01