BACHELOR OF APPLIED ARTS & DESIGN DEPARTMENT OF APPLIED ARTS & DESIGN,

KULLIYYAH OF ARCHITECTURE & ENVIRONMENTAL DESIGN, IIUM

Year 3, Semester 1, 2017/2018 AAD 4231:

ID PROFESSIONAL PRACTICE

TASK 2A: INTRODUCTION TO TENDERING

OPEN TENDERING

SELECTIVE TENDERING

NEGOTIATE TENDERING

Prepared by:

Rosleen Natasya Binti Rosli (1513886)

Mohd NorIqmal Hafiz Bin Mohd Nor Azmi (1516057)

Lecturer:

Asst. Prof. Dr. Noraini Ahmad

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 TABLE OF CONTENT

1.0 INTRODUCTION OF TENDERING

2.0 PRINCIPLE IN TENDERING
2.1 TYPES OF TENDERING
2.1.1 Open Tendering
2.1.2 Advantages
2.1.3 Disadvantages
3.1.1 Selective Tendering
3.1.1.1 Single-stage selective tendering
2.1.6 Two-stage selected tendering
3.1.2 Advantages
3.1.3 Disadvantages
2.1.3 Disadvantages
4.1.1 Negotiated Tendering
4.1.2 Reason why client want to negotiate
4.1.3 Advantages
4.1.4 Disadvantages

5.1. CONTRACT DOCUMENT WITH QUANTITY

5.1.1 Letter of award
5.1.2 Article of agreement
5.1.3 Condition of contract
5.1.4 Contract Drawing
5.1.5 Contract Bill

4.0 CONCLUSION
5.0 REFERENCES

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1.0 INTRODUCTION TO TENDERING
Tendering is a formal, documental, structural process where the tenderer
undertakes in order to enter a formal agreement with the client. Usually three group
participated in this process, they are client, consultant and contractor. Under the
construction activities client is looking and selecting the best, suitable and cheaper
contractor for a project. Tendering method offers the best solution.
Figure 1: Tendering process

2.0 PRINCIPLE IN TENDERING

The purpose of Tendering principle is to provide a framework for the effective,
consistent and efficient management of tendering practices throughout any construction
project.
These are the basic tendering process

1. All aspect of the tendering process must be conducted with honesty at all level
of the industry
2. A clear understanding of the rights and obligations of both parties
3. Parties must confirm all legal obligations
4. Parties must clearly identify ownership
5. Parties must not submit tenders without a firm goal
6. Parties must engage in any practice which gives improper advantages
7. Condition of tendering must be the same for tender on any particular project
8. Clients must clearly specify their requirement in the tender documents and
indicate criteria for evaluation
9. All the information provided in the course of tendering must be protect

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2.1 TYPES OF TENDERING

2.1.1 OPEN TENDERING

Open tendering is the preferred competitive public procurement method used for acquiring
goods, services and infrastructure works. It is executed in accordance with established
procedures set out in the procurement guidelines and detailed in the standard bidding
documents. Procurement notice used to call for bids: Invitation to tender

Open tender also takes in the forms of an advertisement in a national or local newspaper
inviting contractor to apply for tendering competition. Deposit are a requirement in order to
avoid improper application, whilst the deposit is returnable on the submission of tender.

2.1.2 ADVANTAGES

This procurement method fosters effective competition whilst adds value for money. The client
has the possibility to get competitive price and the contractor will have a clear objective
qualifications criteria, neutral and clear technical specifications, clear and objective evaluation
criteria. There is no chance of favorism applied in this type of tender process and the possibility
to provide opportunities to new comers to enter the market is high.

2.1.3 DISADVANTAGES

Although it is the most reliable to find a contractor this way, this tendering process proved to
be more time consuming as the client had to get through in detail the criteria of each company
applied for the tendering qualification. This type of tendering is more strictly procedures-based,
has lengthy timeframe for completion of the procurement action, requires strict adherence to
procedures, restricts suppliers’ participation in determining the technical specifications,
limiting the possibility of building long-term relationship with suppliers. Client also may be
focuses only on a least-cost solution which will suppresses innovation of design process.
Excessive formalism also may limit supplier participation in the tendering process.

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Figure 2: Open tender example

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3.1.1 SELECTIVE TENDERING

A select tendering is only open to a select number of suppliers. The suppliers may be a short
listed sourced from an open tender or be a compilation of business that the organization has
worked with previously. Consultant or experienced clients may maintain “approved lists” of
prospective supplier appropriate for particular types of contract and then regularly review
performances to access whether they should remain on the list. This type of tender may be
particularly appropriate for specialist or complex contracts.

3.1.1.1 SINGLE STAGE SELECTIVE TENDERING

This process is required when short list of selected name list is approved from the client. In
some case, the contractor may be invited, through subtle advertisement in the press to apply
for the tender. The number of the tenderer were limit to five and eight which varies depends on
the scale and the size of the nature of contract. If all the tenderer were reliable, well-establish
and suitable for the proposed work and the client had fixed the construction times then only the
price will be negotiating and the contract will be safely awarded to the chosen contractor.

3.1.1.1 TWO- STAGE SELECTIVE TENDERING

This tender process aimed to bring more competition and at the same time to have advantage
of bringing along the contractor into the planning of the project so that their expertise on the
field can be utilise. This may also have occurred in the early start on site.

To conclude, first stage selective tendering aim to select a suitable contractor by limited tender
participation while the second stage is a process of negotiation with the selected contractor on
the basis of the first-stage tender.

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3.1.2 ADVANTAGES

The advantages for this tendering process gravitate more towards reliable and competent
supplier or contractor which hold comfortable position and relationship with the client. Apart
from that, this tendering helps to reduce cost of tendering, time for the tender evaluation is
reduced. The client only allowed reliable and approved firms to join tendering process where
limited competition of company is easy to screen and select.

3.1.3 DISADVANTAGES

Although it was comfortable, this type of tendering let the opportunities for collusion among
competitors and mislead the time. Newcomers also didn’t have the chance to participate in the
project proposed whilst the industries do complain for those who are not short listed.

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Figure 3: Selective tender example

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4.1.1 NEGOTIATED TENDERING

Negotiated tendering occurs when the client approaches a single supplier based on their track-
record or a previous relationship and the terms of the contract are then negotiated. Negotiating
with a single supplier may be appropriate for highly specialist contracts (where there may be a
limited number of potential suppliers), or for extending the scope of an existing contract. Best
alternatives for the employer to adopt in special emergency cases or security reason such as
tight deadline of particular project. Negotiated tender reduces the risk of failure as reputable
contractor with proven experience engaged.

4.1.2 REASON CLIENT WANT TO NEGOTIATE

 Have a firm business relationship

 Contractor were including in the finance project where client find difficulties to finance
and they negotiate with the builders who is willing to finance the project.
 The contactor has the special availability or expertise of the equipment
 The client wishes to take advantages of the builder specialized knowledge at the design
stage
 To have a quick start

4.1.3 ADVANTAGES

The advantages for this tendering process gravitate more towards both party where the client
felt the most comfortable to work with. Apart from that, this tendering helps to give the client
the confidence of working with a supplier they already know also help in reduce the duration
and costs of tendering and the contractor will manage to allow early supplier involvement.

4.1.4 DISADVANTAGES

Although it was comfortable, carrying out negotiations in the absence of competition so that
both parties feel the outcome is fair can be complex and time consuming. This type of tendering
also may not be permitted by some organizations due to the perceived lack of accountability

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5.1 CONTRACT DOCUMENTS WITH QUANTITY

5.1.1 LETTER OF AWARD

Award contract occurs when tender review process has been completed, the purchaser should
be in a position to either award the contract or to obtain approval to make the award. Once
internal authority or approval has been obtained to award a contract, the successful bidder must
be notified of the acceptance with minimum delay.

AWARD CONTRACT

The stages for acceptance of award included:

 Pre-award meeting with contractors to validate the lowest complying bid

 After the client has validate the lowest bid through qualification standard, a pre-contract
with selected contractor were held for contract signing
 Approval of the tender board and its treasury where this is the process an acceptance of
tender form is issued to tenderer and will be signed by authorized officers.

5.1.2 ARTICLE OF AGREEMENT

Article of agreement is a contract that is written up between the designer and the client. After
the initial consultation with the client the designer will set forth the scope of work to be covered
and the term on which work will be bill. The client is reacquired to make an acceptance writing
prior to any commencing. Strict verbal agreement can be valid contracts, however, since term
are not recorded they can readily be a subject to dispute. Experience suggest that some
agreements in writing is essential. For larger project a review of contract documents by a lawyer
with the field is generally advisable.

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5.1.3 CONDITION OF CONTRACT

Also meant as design Services means the services specified in the Letter of Engagement being
any or all of the following services; namely design of premises, graphics design, interior design,
digital media, consultancy services, corporate identity creation and market research and such
other services, as are described in the letter of engagement which includes.

Design Stage - company has completed the production of the initial plans and elevations in
accordance with the design concept for the premises.

Documentation Stage - company has produced the documentation to be issued for tendering
or negotiation for contracts to carry out the works and/or supply of goods required to implement
designs

Goods means any products or materials created by company as part of the Design Services
which are to be delivered to the client pursuant to the Design Services.

Effective Completion means that stage at which works to carry in to effect company designs
for premises are completed and free from known substantial omissions

Gross Contract Value means the estimated cost, as certified by interior company from time
to time, of the works to be carried out and the goods to be supplied to implement company
designs on proposed project. The Gross Contract value shall include all amounts yet to be
included in the final accounts of the contractors and suppliers which sums will be estimated by
the company treasurer.

Interim Contract Value means the estimated cost, as certified by from time to time, of the
works carried out and the goods to be supplied at each stage by estimation and reference to the
Client’s requirements as to the extent of the project and on the basis of the progress of the
project and on the basis of the progress of the project at each stage.

Presentation Stage means the date on which company presents or is ready to present to the
Client outline designs for premises for the project without detailed drawings, plans or further
documents.

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5.1.4 CONTRACT DRAWING
Construction drawing is the general term used for drawings that form part of the production
information that is incorporated into tender documentation and then the contract documents for
the construction works. It is a legal significance and form part of the agreement between the
employer and the contractor. Specifications will detail the materials, standards, techniques, and
so on required to carry out the works. Construction drawings provide the graphical
representation, indicating the arrangement of components, detailing, dimensions and are
generally drawn to scale either in elevation, plan or sections and detail drawing to provide a
complete representation of building.

Figure 4: Example of contract drawing

5.1.4 CONTRACT BILL

BOQ is a legal agreement between the employer and the contractor. Specifications will detail
the materials, standards, techniques, and so on required to carry out the works. BOQ assist with
the agreement of the contract sum with the successful tenderer. Apart from that, it also provides
a schedule of rates assisting with the valuation of variations and a basis for the valuation of
interim payments alongside with a basis for the preparation of the final account.
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Figure 4: Letter of award example

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Figure 5: Article of agreement example

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Figure 6: Condition of contract example one

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Figure 7: Condition of contract example two

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Figure 7: List of contract drawing example

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Figure 8: BOQ example

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4.0 CONCLUSION
Based on this assignment, it can be concluding that there are three main method
of tendering that are available for contractors to submit tenders as we have discussed,
which are open tendering, selective tendering and negotiated tendering. The method of
inviting tenders rest with the clients. Evaluating the selecting method in early plan the
benefit company where it can result to more time-saving, cost saving and quality
project.

5.0 REFERENCES
https://www.designingbuildings.co.uk/wiki/Selective_tendering

https://www.designingbuildings.co.uk/wiki/Tender_documentation_for_construction_proje
cts

https://www.designingbuildings.co.uk/wiki/Invitation_to_tender_for_construction_contract
s

https://www.designingbuildings.co.uk/wiki/Expression_of_interest_for_construction_contra
cts

https://www.biztree.com/doc/awarding-contract-letter-D1424

file:///C:/Users/User/Desktop/PROFRSSIONAL%20MARKETING/Tender%20Announcement.pdf

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