Tender Preparation and Documentation - Part 6 | How To Win a Construction Tender

Last Updated on March 22, 2024 by admin

Tender Preparation and Documentation

Tender preparation involves long term planning and short term planning. If systems for long term planning are already in place in your construction firm, you have already done half the work that is required to secure a tender. Systems for long term planning have already been discussed in chapter 2 (Planning and Organization). In this chapter, we are going to discuss the actual short-term operational procedures that are required in preparing a tender.

Assuming that you have a Tender update system that notifies or alerts you of the latest tenders in your region, your next step is going out to collect the tender documents. As discussed in chapter 4 (How to Find Tenders) there are several ways of finding tenders. Steps in preparing a construction tender/bid are outlined as follows:

Collect Tender Documents

The following is a list of bid documents that a contractor should collect from the client or project owner. All contractors wishing to participate in the tender have to pay a non-refundable deposit fee in order to obtain the documents. The deposit fee is set by the owner and it varies by project.

• Tender Forms
• Bills of Quantities (Unpriced)
• Project Drawings
• Schedule of Specifications (Floor Finishes, Wall Finishes, Windows, Doors, Fittings Etc.)
• Building Contract and Preambles

Read the Project Details and Decide

After collecting the tender documents, you should study the project details in order to determine the magnitude and scope. Read the drawings and description of works. Decide whether you should bid or not. A guideline for decision making is provided in chapter 5 (Bidding Strategy).If you need to calculate the contract price in order to make a decision, decision-making can be shelved at this point.

Request Bills of Quantities (Unpriced) in Excel Format

Soon after collecting your bid documents, you should request Blank Bills of Quantities from the project owner or client’s representative. The representative is the quantity surveyor or estimator who prepared the Bills of Quantities. When you receive the Microsoft Excel copy of the Bills of Quantities via email or you can simply get the Bills copied on your USB flash drive, you should start pricing the Bills with your company rates.

Price the Excel Bills

Working in cooperation with the Purchasing Department to get quotes, you should price the Excel Bills with updated rates. Do not rush to enter the rates on your hard copy (the official BOQ document that you are going to submit), but you should analyze your rates, cross check, proofread and adjust any rates that need to be adjusted. The purpose of an Excel Bill is to enter rates for calculation and editing purposes. Send a copy to your assistants for proofreading, and transfer the final rates to the hard copy only when you are satisfied with the price.

Transfer Rates to Hard Copy

When you are done finalizing the rates in your Excel Bill, you should transfer them to the hard copy. Get an Administrative Assistant with clear and legible handwriting to write down the rates into your hard copy. Black ink should be used. Standard Bills of Quantities contain the following sections that you need to price:

Section Summary:

• Preliminaries
• Earthworks
• Concrete, Formwork and Reinforcement
• Precast Concrete
• Masonry
• Waterproofing
• Roof Covering
• Carpentry and Joinery
• Ceilings, Partitions and Access Flooring
• Ironmongery
• Structural Steelwork
• Metalwork
• Plastering
• Tiling
• Plumbing and Drainage (Provisional)
• Glazing
• Paintwork
• External Works
• External Plumbing and Drainage (Provisional)
• Provisional Sums

Total Carried to Final Summary –   20,000,000.00

…………………………………………………………………………………

Final Summary:

Building Project – 20,000,000.00

ADD: CONTIGENCIES

Allow the Amount of $700,000 (Seven Hundred Thousand Dollars) for contingencies to be used by the Architect in terms of Clause 17 of the Principal Building Agreement – 700,000.00

SubTotal Before VAT – 20,700,000.00

ADD VAT @ 15% – 3,105,000.00

Total Carried to Tender – 23,805,000.00

…………………………………………………………………………………

Fill in Tender Forms

When you have finished pricing your Bill, you should fill in the Tender Forms. They are usually attached at the end of the Bills of Quantities. The forms are divided into several sections e.g. Section A to Section H. The following information is required in your Forms:

Company Details

Provide your company information and profile as required.

• Company Name
• Telephone Number
• Fax Number
• Postal Address
• Street Address
• Email Address
• Owner or Somebody Authorized to Sign on Your Behalf
• Business Registration Number
• Tax Registration Number
• Company Profile and Background History

List of Projects Done and Experience

You are required to provide information about your work experience and projects done over the past months and years.

• Name of Projects
• Brief Description of Projects (Scope and Nature of Project)
• Contract Value of the Projects
• Year Done and Completion Time (Duration of Project)
• Name of Project Owner/Client
• Contact Details of Client

Programme of Work

The contractor is required to complete the project within the duration stated in the preliminaries section of the Bills of Quantities. Failure to complete the project within the stated completion time will result in penalties being applied. A programme of work is required for every contractor who bids for a construction project. In this section, you have to state the number of days, weeks or months in which you can finish the project. The completion time should match the duration specified in the preliminaries or even better, it can be shorter. Based on the resources that the company has in its possession, a project can be finished much earlier than expected. A programme of work is based on past projects and experience but you should also consider the magnitude and scope of the current project in order to work out a realistic completion time. If you have done several projects of varying sizes, it will be easy for you to estimate the completion time. If you don’t have a lot of experience, you can work out the completion time based on data from human resources that you intend to employ.

Schedule of Labor and Skilled Manpower

You need to list down the type of skills and labor that you are going to employ for this project, including the estimated labor rates and number of workers for each team. Depending on the Bills of Quantities and Specifications, some of the trades that you may be required to employ are:

Skilled and Unskilled Laborers:

• Laborers (Trench Excavation)
• Concrete Installers
• Structural Reinforced Concrete Installers
• Bricklayers
• Plasterers
• Tile Installers
• Timber Floor Installers
• Carpet Installers
• Wall Cladding Installers
• Ceiling Installers
• Carpenters
• Roof Installers
• Structural Steel workers
• Welders
• Plumbers
• Electrical Installers (Provisional Sum)
• HVAC installers (Provisional Sum)

Professional and Supervisory Team:

• Site Foreman (on a large project, more than one foreman for each major trade or location may be required)
• Project Manager
• Assistant Project Manager

Schedule of Plant and Equipment

In this section, you should list equipment and plant that you intend to hire, including the operational rates. Some of the equipment and machines that you may want to hire are:

• Grader
• Excavator
• Vibratory Compactor
• Crane
• Dumper
• Loader
• Concrete Mixer
• Bulldozer

Schedule of Material Rates

Material specifications are provided by the Architect in the Schedule of Specifications provided in the Tender Documents, but in this section you are requested to list your rates (Prime Costs) against major items from your suppliers. Prime Cost rates for the following materials are required:

• Sand (Fine Aggregate)
• Gravel or Stone (Coarse Aggregate)
• Cement (per 50kg bag)
• Bricks
• Face Bricks
• Floor Tiles
• Wall Tiles
• Roof Covering
• Ceiling Covering
• Glazing

List of Material Suppliers

Provide a list of suppliers that you intend to use:

• Suppliers of Sand
• Suppliers of Gravel or Stone
• Suppliers of Cement
• Suppliers of Bricks
• Suppliers of Tiles

Agreement Form

After completing all sections of the Tender Forms, the last form that you should fill in and sign is the Agreement Form. On this form, you enter the final Tender Amount in numbers and words, agreeing that you will carry out the project to completion at the stated amount. Put your contract amount and signature in black ink.

How to Sign Tender Documents

Bills of Quantities – Put your signature on the Summary Section of each Bill of Quantities, on the bottom of the page where the total amount is shown. Use black ink.

Tender Forms – Put your signature on the bottom every page in black ink.

Editing Errors – If you wish to change the rates and figures in the Bills of Quantities, you should cross out the existing number and put a new number in brackets. Put your signature next to the changes in black ink.

Compliance Requirements and Proof

This is a critical step where tenderers are evaluated for compliance requirements. Contractors participating in the tender are required to produce proof in the form of documentation that supports their registration status, standing, certification and contract with claimed institutions, statutory bodies, registrars, authorities and creditors. A compliance check is done to filter out bidders who do not meet the financial, legal and registration requirements to participate in a tender. These are bidders who are at high risk of defaulting, going bankrupt and putting the project in jeopardy.

In order to operate smoothly during a construction project, a contractor is required to have a healthy relationship with creditors. Materials have to be supplied on time and funds have to be guaranteed to pay workers. Upon submitting a tender, you are required to provide certified copies of the following documents:

Bank Rating – This is obtained from a bank or financial institution where your company account is based. You have to request a bank rating from your Personal Manager. Maintaining a clean credit score of 50% and above will put you in a favorable position with tender evaluators.

Creditors Rating – This is obtained from suppliers of building materials that you are in contract with. If the suppliers give you a good report that validates you as being creditworthy, tender evaluators will be happy with you.

Debt Clearance – In some cases, a broad credit check that includes all your financial dealings and purchase history is done to assess your creditworthiness. Every debt you incur with a store or merchant that is registered with a clearing authority such as ITC is stored in a central database. In order to pass the evaluator’s test, you should be cleared by the authority.

Performance Guarantee – This is a financial commitment pledged by a bank or financial institution to fund a project in the event that the contractor wins the tender. This financial support provides security and cover, and it will remain in force until the project is practically finished. Also known as a bank guarantee or letter of intent, you can obtain this from your Bank Manager or any institution that agrees to be your financier.

Other documents that you are required to submit are:

• Registration as Taxpayer
• Social Security Certificate
• VAT Certificate
• Business Registration Papers / Founding Statement
• SME Certificate (if project is intended for small and medium enterprises)
• Proof of Attendance (pre-tender site visits)

Tender Submission

When you are finished preparing the tender and documentation, you should submit the documents, complete and signed at the Tender Evaluator’s office. You can submit them in person or you can send the documents via a courier like DHL or Post Office. Fax, telex, email, telephone and other electronic forms of transmission are not allowed. The following documents should be returned to the Tender Evaluator’s office:

• Original Priced Bills of Quantities ( signed)
• Tenders Forms (filled and signed)
• Company Profile and Background
• Certified Copies of Compliance Documents:

Bank Rating

Creditors Rating

Debt Clearance

Performance Guarantee / Letter of Intent

Registration as Taxpayer

Social Security Certificate

VAT Certificate

Business Registration / Founding Statement

Your tender documents should be submitted as one package. Put your documents in a Plain Sealed Envelope. Using an ink magic marker, write the Tender Number and Tender Office Address on the envelope.

You should make a copy of your Priced Bills of Quantities and Tender Forms before sending the original documents to the evaluator’s office:

• Copy of Original Priced Bills of Quantities
• Copy of Original Tender Forms

Mandatory Site Visit

One of the requirements for participating in a construction tender is visiting the site where the proposed project is to be built. The purpose of a site visit is to assess the ground conditions and environment i.e. terrain, natural conditions, access to site, water supply, electricity, adjacent buildings, location, hazards, obstructions and so on. This information will help you in the pricing of preliminaries and bill items. The date of the site visit will be made known to every tenderer via the tender advert or upon collecting the bid documents. The site meeting is convened by the Architect, other consultants such as the Civil Engineers, will also be there. It is highly recommended to attend site meetings because this is an occasion to get guidance and insight from the engineers / architect as well as ask questions.

Closing Date of Tender

Tender documents should be submitted to the evaluator’s office before the closing date, which is stated on the advert. The closing date for most tenders usually falls on a Friday morning before 12:00, but this depends on the advert. Tenders received after the deadline will not be entertained. Your bid documents should be sealed in a plain envelope which is addressed to the tender office, and the Tender No. must be indicated on top. Please note that tender documents cannot be submitted via fax, email, telex or telephone.

Tender Opening

Tender opening is a procedure where sealed bid documents are opened in front of other tenderers and contract amounts read publicly. This procedure happens on the closing day, soon after the closing date and time of tenders. It is done to facilitate fairness, transparency and proof.Tenderers are given a chance to inspect the documents to ensure that no tampering has been done with the documents.