TENDERING
Is the process of procurement that involves bidding by two or more organisations, where procurement is acquisition of goods and services or work from an outside external source.Tender is the final price or offer which is submitted to the client by the contractor is the sum of money which is prepared to carry out the work and it will include not only estimates but also a margin for overheads and profit.
METHODS OF TENDERING
SELECTIVE TENDERING
This is a type of tendering where competition between contractors is controlled by the client and unsuitable contractors are eliminated from the process of tendering. It restricts its list only to local firms with good name reputation who are capable of complying with the contractual obligations but the level of competition is generally reduced from the starting point. Such reputable firms should carry a good stock of plant and equipment, employ experienced technical and managerial staff and supply sufficient back of resources to ensure the satisfactory completion of the project. It is the architect, quantity surveyor and client all in consultation with each other who select and compel the suitable and capable contractor in most cases it is the client who insists on particular firm or organization on the list. Selective tendering will invite only a certain competent contractors to submit a tender to the proposed job
NEGOTIATED TENDERING
Having stated that competition preferably by selected tendering which is acceptable under normal circumstances there are occasions when it would suit the client to dispense with element of competition altogether and approach only one contractor who is considered to be the most suitable under the circumstances and negotiate a price with him. Some circumstances under which negotiated tendering may be preferable are:
A quick start time factor to be taken into consideration
The state of the markets that is forces of demand and supply
A company or firm with specialist plant and techniques
Continuation of the contract that is after the one we have been completed
Mutual relationship with other contractors of different items as the one in which the contractor deals or specialises in.
OPEN TENDERTING
The system of open tendering is often favored by many large organizations e.g. local authorities’ health and water authorities. A room is provided for any contractor who feels he is capable of performing the work and he can submit his tender. In order to attract the response from prospective tenderers the client advertises giving a brief description of the proposed work, anticipated starting date and sometimes an approximate value of the project. The notification of proposed works is brought to the attention of any contractor large or small, good or bad, local or international, who cares to search though the appropriate publications.
By so doing it allows all interested parties to tender and the client can gain the biggest possible response to his advert thereby achieving maximum possible competition and certainly the lowest possible price. In an attempt to reduce the tender lists clients often ask for a deposit to be paid which is returned to the contractor on receipt of a bona fide tender. Deposits tend to deter contractors who are not seriously interested in applying for the job. The amount of the deposit however must be high enough to deter such people and yet it should not be so high so as to discourage genuine tenderers.
COMPETITIVE TENDERING
A competitive tender refers to the final price submitted by the main contractor which itself may be made up of both competitive prices. Most contractors’ tenders contain an element of both; however ‘competition’ in this instance refers to the main contractors’ tender only. Acknowledging the fact that negotiation is available to the client as an alternative method of contractor selection, prices obtained from a number of contractors, all competing genuinely with each other for the work, will probably give the best value for money and will be suitable for the large majority of building projects
Although it is generally accepted that the basis of competition is normally related to the process of obtaining the lowest possible price for a job, this need necessarily always be the case, even though the code of procedure for single stage selective tendering argues for the element of completion being limited to price only with all other possible variables being determined beforehand and stated clearly in the tender documents.
ARTICLE WRITTEN BY
PRISCILLAH MUNANGATIRE
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