Download preview PDF. 0000027204 00000 n Similarly in UK & Australia, Cooperet al(1999) & Willey et al (2009), revealed the same from their survey reports that low price bid shifting to multi criteria selection practice in the selection of a Contractor. In the Middle East, specifically in the Civil engineering works such as Roads, Infrastructure, Bridges and Underpasses; tendering process starts after the completion of design and all tender documents including bill of quantities (Karim, 2009). Project Estimating. (1994) studied about Saudi Arabia and concluded that, the major problems faced by the cost estimator in preparing cost estimate are tough competition in the market, time duration, error in contract drawings, discrepancy in specification, unforseen change in material price on construction stage, changes in scope of works, non availability of similar project data and personnel experience on similar project. Macmillan Building and Surveying Series. It also makes the documentation process more efficient, expedites the tender process, reduces the demand of manpower resources, provides better security and makes it easier to comply with best practice recommendation. de Silva. Due to this, there would be lesser chances of denial by any Tenderers or Client, regarding the receipt or issuance of any addendum or revision of any part of works. A quote also includes the timeline and the scope of a project. A proposal is used to form a new relationship with a business and it generally involves competition with other businesses who are also submitting proposals. /** For example, if you have your own cake business, you know that the exact price of the ingredients can fluctuate regularly, meaning you cannot fix your prices for long periods. Differences Between Trial Balance & Balance Sheet. You can better make an estimate, prepare a quotation, bid, and create a proposal when you are clear about your businesss financial information. They may specify some additional details that you should add to the proposal. 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In the case of the construction industry, sub-contractors are usually the ones that will submit their bids. So this was an classic example which to demonstrate that even in prestigious project where the contractor is expected to make a decent profit, the contractor faces the risk of incurring loos due to indifference shown while preparing tender bid. The tender document contains the conditions of the contract and other obligations. An estimate is an approximate value of what something is likely to cost and how long a project can take. Baldwin. This would benefit all entities who are involved in the tendering process. Estimates, quotes, bids, and proposals are different, despite the overlap between these documents. Tendering especially for big and complex projects can be a very costly exercise equally for Employer and Tenderers, but this would be money well spent if the targets achieve successfully (Al Tamimi, 2009). On the other extreme, the tender is a response to the invitation to tender, which is used to find out the best value for money, from the prospective suppliers. Quantity Surveying Practice. However, Karim (2009) says, sometimes there is no immediate issue of letter of acceptance; the Employer can issue a letter of intent to entering a formal contract. It is common practice that after the estimator has estimated the cost of the various BOQ items, the management who are authorized to decide on the final price make changes to the tender by adding or subtracting certain percentage on the costs as per corporate strategy. Seeley. This change is often out side the control of the estimator and may affect the adequacy of the tender price. Furthermore, there is also a saving for the Tenderers as substantial travelling costs and time, required to pick the documents from the Employers office and to submit the tender document, are avoided in E-Tendering. Download chapter PDF. Nevertheless, while open to interpretation, an estimate, bid, quote, and proposal are meaningfully different. According to Lawrence (2009), Two-stage tendering process is quite common in UK and slowly being recognized in the Middle East construction industry as a prospective way to achieve the Employers objective and at the same time reduce the risk for the Contractor. According to current survey report by BCIS in 2009; BCIS seems to be convinced that web based e-tendering reduced administrative overheads related to the whole tendering processes. This expected cost should be considered at tendering stage. Code of Estimating Practice (1983), R.S. Many experience players of this industry will agree that a proper tendering process fulfils two objective; viz; a) The Employer gets competitive and realistic price for the project that he intends to undertake and b) The Contractor or the Tenderer upon making due investigations before submitting his tender, fully understands the requirement or nature of the proposed work and Employers requirement. Estimates can be based on your past experience with similar projects and they dont require too much time. Estimatesare usually drafted without an in-depth understanding of the clients requirements and are subject to change as new information surfaces. 11Case Study on the Impact of a Wrong Estimate: I would like to give a practical example of his current project, to highlight the effects of wrong cost estimation at Tender stage and its consequences at construction stage. Spon (1984), R.J. Marks, R.J.E. The Employer can also issue tender addendum changing any part of the tender document. Spon (1992), J.J. Farrow. If you fail to get crisp on what your clients expect, you risk giving them the wrong information and stalling the process back and forth. Elliott. Estimating and Tendering Some Aspects of Theory and Practice. */ Business owners are generally required to make estimates when they help their clients with budgeting. 0000006688 00000 n Nick Darlington is a FreshBooks customer and small business owner who's been running a writing business for close to 4 years now from his home in sunny South Africa. Clause 52.4 DayWork:Any time before the issuance of taking over certificate the Engineer has the authority to instruct any varied works to the Contractor that are to be executed on a Day-Works basis. If you dont understand it fully, it can land you in big trouble. 0000002220 00000 n HMSO (1975), Institution of Civil Engineers, Association of Consulting Engineers and Federation of Civil Engineering Contractors. (1993). This procedure has a distinct advantage in terms of trustworthiness of the prospective Contractors, since the credentials of the Contractors are ascertained prior to invitation of bids. Sixth Edition (January 1991), Ivor H. Seeley BSc, MA, PhD, CEng, FICE, FRICS, FCIOB, FIH (Emeritus Professor, Chartered Civil Engineer and Surveyor), You can also search for this author in Tendering is the process. 3Tender and the Tendering Process: FIDIC (1987) defines Tender means the Contractors priced offer to the Employer for the execution and completion of the Works and the remedying of any defects therein in accordance with the provision of the Contract, as accepted by the Letter of Acceptance. The two phrases should not be used loosely. This chapter is concerned with tendering procedures and contractor selection, the methods of preparing estimates by contractors and the compiling of tenders, the appraisal of tenders by the engineer, the methods used for accepting tenders and notifying the results, and finally the signing of the contract. Anyone you share the following link with will be able to read this content: Sorry, a shareable link is not currently available for this article. Al-Hasanet al (2005), states that a Companys record data is one of the most reliable source of information upon which estimating can be based. There are many advantage of this process for the Contractors and the Employers. 1987. So, before you send anything, discuss the details of what clients want: Do they expect a comprehensive proposal that sells your services and expertise so they can get buy-in from others? There are different provisos that protect the Employer in most forms of the conditions of the contract. You will often need to submit supporting information, including previous client testimonials to establish credibility, health and safety documents, and examples of past work. The second part of the review discusses the Tendering process. When done with great care and detail, a proposal can make you stand apart from other businesses. The Estimators should have a vast knowledge about the project while pricing for a Tender he is the initial person giving the total cost for a project during tender stage and playing in costs to get more profit. Estimating and Tendering Some Aspects of Theory and Practice. 0000060457 00000 n This means estimates are not binding from a legal standpoint. * @since 1.0.0 As against, the tender has two main elements, price and quality, wherein price determines the best price offered by the supplier, which is compared with the other suppliers and quality determines the suppliers potential to deliver the goods specified. 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