Chapter 3 Tender Tender Documents DefinitionTender is an

Chapter -3 Tender & Tender Documents. Definition—Tender is an offer, in writing , from a contractor to execute some specified work or supply of material for certain payment of money. The work may be-----1. construction work as per specification & drawings. 2. Supply of materials & labours 3. Transportation of materials. Visit for more Learning Resources 1

Types of Tender Local tender Global tender Local tenders- are published in local newspaper. These are invited for any type of work to be executed in our country. specilised design or manufacture from the globe is not needed. All these are fulfilled in our country. . 2

Ø EMD: It is the initial deposit paid with the tender in order to show the earnest desire of the contractor to take up the work if awarded. An amount equal to 1. 5 to 2% of the estimated cost of work is taken as EMD. This amount remains in the safe custody of the govt for the work. This amount carries no interest. After opening the tender EMD of all unsuccessful contractors is refunded to them on applying to the authority the EMD of successful contractor forms a part & parcel of security deposit of 10% required to be paid while signing the contract. The main purpose of EMD is to maintain healthy competition between the bidders. EMD is accepted in cash, DD or in the form of government securities like postal order, bank guarantee 3.

Ø Security deposit: once the tender is accepted the selected /sucessful contractor has to deposit a certain amount with the government. The amount varies from 5% to 10% of estimated cost of work with a highest limit of 5 lakh for any amount of work. this amount is known as security deposit which includes the amount of SD paid with the tender. This amount is helpful as a check on the contractor fulfilling all terms and conditions of the contract including the quality & time limit. This amount remains with the Govt till the final completion is over. It is refunded in Two stages. 1. -50% after virtual completion of the project 2. -Remaining 50% after the defect liability period 4

Ø Validity period: As the tenders are opened in presence of the contractors in public sector, the lowest bidder is immediately located because of % rate tender system. The lowest bidder is then called as successful contractor who has to start the work within 120 days of opening of the. this 120 days period is called the tender validity period. the filled up tender when accepted becomes agreement The contractor within 120 days is informed with work order to take up the work by signing the contract as indicated in the work order. The reason for validity period is the time consuming process of procuremnt of materials, making arrangements of water supply etc. 5

Ø Rejecting all tenders: 1. If there is suspicion of illlegal collusion forming a ring & syndicate 2. If there are radical changes in the nature of work or alignment. 3. The lowest tender is much higher than the estimated cost of the work. 4. minimum no. of tenders are not received for healthy competition. -----min— 03 -------05 ----good competition -----more than 10 ------very good. 5. serious sickness or death of contractor. 6. Earthquakes, floods, wars conditions beyond control of common man. 6

Rejecting all tenders: 1. not submitted in perticular format sold by the dept. 2. Improper offer given by the contractor. Ie. Too low or too high 3. EMD not enclosed with the tender. 4. not signing on the contract. 5. some counter conditions put by the contractor which are not acceptable to the dept. 6. Bamkrupt. In olden days the tender was rejected due to------a) lack of experience b) lack of finance c)Inadequate staff & reputations Prequalification: 7

Necessity of tender: 1. To check willingness of the contractor to carry out the work. 2. To get reasonable offer from the contractors within the estimated cost. 3. To complete the work in time. 4. To use expertise & resources of the contractor 8

Global tenders: These are internationally published. Any firm or contractor from the world can take part in the tendering process. Such tenders are invited for very large projects like airport, tunnels, Expressways. etc 9

Other types include----open tender-contractor can enter into open competition. All gets the opportunity to fill the tender. Limited tender-limited no. of contractors are invited. Negotiated tender-Negotiations are held between owner & the contractor. 10

Tender notice: it is notice given in the newspaper inviting the contractors to give their offers to carry out work for certain specified amount. The notice may be given local & / or international newspaper. This is very important document of contract because the entire contract agreement depends on the notice. It should be short with minimum required information about the work. THE ADVETISEMENT SHOULD BE ACCURATE & COMPREHENSIVE. The copy of advertisement should be included as part of document. Which will be helpful in legal matters. 11

Contents in tender notice: a) Name of authority inviting tender. b)Name of the work and its location. c) Estimated cost d) Time limit time limit & penalty. e) Earnest money required with the tender. f) The availability of data & forms. g) Last Date, place , Time Of Receipt Of Tender h)The right to reject the tender. OTHER INFORMAATION SUCH AS COST OF BLANK FORM, CONDITIONS, MODE OF SUBMITTING, THE WAY IN WHICH IT IS SUBMITTED. 12

Drafting tender notice: Drafting a specimen tender notice OFFICE OF E. E. SPECIAL WORKS DIVISION M. G. ROAD, PUNE-01 Tender notice No: ---90/01/14 -15 Date: 12/1/15 sealed item rate tenders are in B 2 are invited by Executive engineer public works division Pune from the registered contractors in appropriate class for the following works. Sr. no Name of work Estimated cost in Rs Earnest money In RS Security deposit In Rs 1 3021500/- 30215/- 151075/- 18 months Construction of guest house building for Govt. poly. pune Time of completion 13

Blank tender form at a non refundable cost of Rs. 500/-(600/-by post) can be obtained from the office of Executive Engineer P W Division no. 1 Pune up to 4. 00 pm during working hours on all working hours ( Except holidays) from ------ to ----Tenders will be received in office of EE up to 3. 00 pm on ------and shall be opened on the same day at 4. 0 pm in presence of contractors who may likely to attend. The undersigned reserves the right to reject any or all tenders, without assigning any reasons. sd /Executive Engineer 14

Authority inviting tender Tender notice No: ---90/01/14 -15 Date: 12/1/15 Sealed tenders are invited in (type) tender form from registered contractors ----class, for the work as mentioned below and will be received in sealed covers addressed to -------(Authority inviting tender ) , duly subscribed with the name of the work, by the undersigned, in his office unto the date and time noted as below and will be opened on same day, in presence of intending contractors, if possible. A certified true copy of the registration will have to be tendered with the application, by the contractor, for the issue of tender form. 1. An amount as mentioned below should be paid on account of EM by cash or DD drawn in favor of -------(Authority inviting tender 1. name of work----------------------------2. estimated cost----------------------------3. Earnest money---------------------------- 15

5. time of completion------------------------6. cost of blank forms. ---------------------7. blank forms are avaible between -----& ------8. last date receiving tenders----------------9. date of opening tenders------------------10. class of contractors-------additional information if any regading the contract can be obtained from the office of the undersigned. The undersigned reserves the right to reject any or all tenders, without assigning any reasons. sd /Executive Engineer 16

Ø EMD: It is the initial deposit paid with the tender in order to show the earnest desire of the contractor to take up the work if awarded. An amount equal to 1. 5 to 2% of the estimated cost of work is taken as EMD. This amount remains in the safe custody of the govt for the work. This amount carries no interest. After opening the tender EMD of all unsuccessful contractors is refunded to them on applying to the authority the EMD of successful contractor forms a part & parcel of security deposit of 10% required to be paid while signing the contract. The main purpose of EMD is to maintain healthy competition between the bidders. EMD is accepted in cash, DD or in the form of government securities like postal order, bank guarantee 17.

Ø Security deposit: once the tender is accepted the selected /sucessful contractor has to deposit a certain amount with the government. The amount varies from 5% to 10% of estimated cost of work with a highest limit of 5 lakh for any amount of work. this amount is known as security deposit which includes the amount of SD paid with the tender. This amount is helpful as a check on the contractor fulfilling all terms and conditions of the contract including the quality & time limit. This amount remains with the Govt till the final completion is over. It is refunded in Two stages. 1. -50% after virtual completion of the project 2. -Remaining 50% after the defect liability period 18

Ø Validity period: As the tenders are opened in presence of the contractors in public sector, the lowest bidder is immediately located because of % rate tender system. The lowest bidder is then called as successful contractor who has to start the work within 120 days of opening of the. this 120 days period is called the tender validity period. the filled up tender when accepted becomes agreement The contractor within 120 days is informed with work order to take up the work by signing the contract as indicated in the work order. The reason for validity period is the time consuming process of procuremnt of materials, making arrangements of water supply etc. 19

Defect liability period: it is the period during which any defect in the work is noticed, then the contractor has to rectify this defect at his cost upto satisfaction of the authority. The period is usually, ---first monsoon season or…. . ----six months after virtual completion ……whichever is later. If nothing is mentioned about the period then it is taken as 12 calendar months. Assessing the defect…. . 1. faulty planning & design. 2. Fulty execution of work 3. use of inferior materials & workmanship. If contractor fails to rectify the defects---SD is not refunded. 20

Ø Rejecting all tenders: 1. If there is suspicion of illlegal collusion forming a ring & syndicate 2. If there are radical changes in the nature of work or alignment. 3. The lowest tender is much higher than the estimated cost of the work. 4. minimum no. of tenders are not received for healthy competition. -----min— 03 -------05 ----good competition -----more than 10 ------very good. 5. serious sickness or death of contractor. 6. Earthquakes, floods, wars conditions beyond control of common man. 21

Rejecting lowest tender: 1. not submitted in perticular format sold by the dept. 2. Improper offer given by the contractor. Ie. Too low or too high 3. EMD not enclosed with the tender. 4. not signing on the contract. 5. some counter conditions put by the contractor which are not acceptable to the dept. 6. Bamkrupt. In olden days the tender was rejected due to------a) lack of experience b) lack of finance c)Inadequate staff & reputations Prequalification: 22

Corrigendum of tender notice: The last date & time for the receipt of complete tenders forms can be extended in following circumstances: 1. The preparation time to the contractors is short & same is brought to the notice of the authority. 2. Important changes in plan & design are essential after issue of forms. 3. Tender papers are not ready in office. 4. sufficient no. of blank forms are not sold. In new schedule should be brought to the notice of the contractors by giving corrigendum in the newspaper. 23

In continueation of the tender notice published in this newspaper dated……. it is hereby notified that the dates of issues & receipt of tenders for the work of -----has been extended up to-----& -------respectively. All other conditions remains the same. date ENGR EXECUTIVE For more detail contact us 24