LECTURERS NAME : PUAN JANNA BINTI TAMMY

UNIVERSITY OF TECHNOLOGY MARA

Types Of Tender
ECM 317 | CIVIL ENGINEERING
CONSTRUCTION PROJECT
NAME : MOHAMAD AISAR BIN RUSLI

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TABLE OF CONTENT

NUMBER

TITLE

PAGE(S)

ACKNOWLEDGEMENT

INTRODUCTION

LITERATURE REVIEW

5-7

DISCUSSION

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CONCLUSION

REFFERENCES

10

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ACKNOWLEDGEMENT

I would like to express my deepest appreciation to all those who provided me the possibility to
complete this report. A special gratitude I give to my lecturer, Madame Janna Binti Tammy, whose is
contribution in stimulating suggestions and encouragement and helped me to coordinate my project
especially in writing this report.
Furthermore I would also like to acknowledge with much appreciation the crucial role that is
Mohamad Aiman Bin Rusli, who is my brother that gave me the understanding and the necessary
material to complete this task. Last but now least, special thanks go to my friend, Muhammad Amirul
Haffis Bin Zuber who help me and gave suggestion about this literature review.

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INTRODUCTION

A tender can be said as an offer to do work or supply goods at a fixed price. Initiating step of a
tendering process in which qualified contractors are invited to submit sealed bids for construction or
for supply of specific and clearly defined goods or services during a specified timeframe. The tender
process is designed to ensure that the work to be done for client/government is given out in a fair way.
For example in Malaysia, there are a number of policies known as procurement policies which guide
government of Malaysia on how to make decisions on which tender to accept. Although price is very
important in the decision on which tender or bid to accept, it is not the only factor taken into account.
Once client/government accepts a tender, it is binding on both parties. This means that the
person or company that won the tender has to provide the goods or services in the manner agreed to
and at the price offered, and client/government must pay the agreed price at the agreed time. In other
words, once accepted, a tender is a binding contract.
When talk about tendering, it is involved some kind of complicated process and procedure.
Before any tendering process can be done, professional team and employer must make sure all
necessary tender documents have been prepared, checked and approved. The source of the funding
also must have been identified and the project financing put in place. The procedures for subsequent
stages should have been established with the express consent of the employer to ensure the
tendering process will go smoothly.
What types of tendering that employer want to choose is depends on nature of contract,
complexity of the construction, expertise needed and several reasons. But usually for the government
project all over the world, is tend to make open tender to ensure the procurement and works to be
done in fairly manner without prejudice. Open tender is one of the types of tendering that commonly
used in this world. Actually there are several types of tender including open tender, selective/close
tender, and negotiated tender.

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LITERATURE REVIEW

OPEN TENDER
Open tendering is the main tendering procedures employed by both the government and
private sector. The client advertises the tender offer in the local newspaper giving detail and key
information of the proposed works and inviting interested contractor to tender. In the legal sense such
tender notices constitute invitation to treat, a mere request by the employer for suitable contractor to
submit their bids or offers.
If the pre-requisite to tendering on the form of possession of the necessary registration has
been identified in the tender notice, then the advertisement is directed to only that particular class of
the public having the said qualifications. In order to reduce number of enquiries, earnest money is
deposited (for private project). Until the receipt of a bone fide tender selected then it will be returned.
Although price is very important in the decision on which tender or bid to accept, it is not the only
factor taken into account. Client does not bind to accept the lowest or any offer. The advantages and
disadvantages of open tender are stated below:
Advantages

It allows any interested contractor to tender. Therefore it gives opportunity for an unknown
contractor to compete for the work

Allowing the tender list to be made without bias. Client will obtain the bargain possible. No
favouritism in selecting contractors.

Ensuring good competition not obliged to accept any offers.

Traditional method of tendering, familiar to all sector of the engineering and construction
industry.

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Does not attract reputable and established contractor unless they are forced to, due to lack of
work. So the new contractor high possibility to win the contract

Disadvantages

The tender list can be long as too many contractors tendering for one job.

Uneconomic use of source.

Public accountability may be questioned if the lowest offer is not accepted.

SELECTIVE/CLOSE TENDER
Selective tendering is the one alternatives developed to address the limitations of the open
tendering procedure. In this method, a short list of contractor is drawn up and they are invited to
submit tenders. The purpose of the elective tendering are to improve the quality of the bids received,
to ensure that contractors with the necessary experience and competence are given the opportunity to
submit the necessary bids, due to urgency work involved, for specific reasons of the employer, eg
security reasons in government projects and to make the tendering procedure more manageable and
less a burden on the parties involved. Such list may be prepared through recommendation from the
Clients professional adviser whom have knowledge of the Contractors undertaking the work in the
past or advertisement through the newspaper (prequalification). The advantages and disadvantages of
the selective tendering are stated below.
Advantages

Only the competent contactors were invited to tender, then the lowest can be accepted.

It reduced the cost of tendering (economic use of resources, reduced tender documentation,
shorter tender periods, better management of the tender process, etc.)

Disadvantages

Reduces the availability of work for other contractors especially new contractors.

Tender Price may invariably higher than would have been in open tendering.
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Greater chance of collusions(secret agreement between contractors).

Tendering period longer because it involved two distinct stages.(Selection of suitable

contractors and determination of Contract Price)

Favouritisms may occur in the short listing.

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NEGOTIATED TENDER
Negotiated tenders are obtained by the employer inviting a contractor of his choice to submit
prices for a project. Usually this is for specialized work or when particular equipment is needed as an
extension of existing works, or for further work following a previous contract.
Sometimes negotiated tenders can be used when there is a very tight deadline, or emergency
works are necessary. A negotiated tender has a good chance of being satisfactory because, more
often than not, it is based on previous satisfactory working together by the employer and the
contractor.
When invited to tender the contractor submits his prices, and if there are any queries these are
discussed and usually settled without difficulty. Thus mistakes in pricing can be reduced, so that both
the engineer advising the employer and the contractor are confident that the job should be completed
to budget if there is no problems. However, negotiated tenders for public works are rare because the
standing rules of public authorities do not normally permit them.

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DISCUSSION

OPEN

SELEC

NEGOT

TENDE

TIVE/C

IATED

LOSE

TENDE

TENDE

R
I.

I.

I.

Pu

Sh

Kn

II.

II.

II.

Eva

Sho

Eva

III.
Eval

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CONCLUSION
An evaluation team will examine each tender received and make recommendations as to which tender
represents best value for money. Once the contract has been awarded, both the successful and
unsuccessful tender will be notified. Once the final decision has been made on the tender award, the
tender administrator creates the tender results notification which is in letter form, and then sent to all
participating contractors.

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REFERENCES

http://toolkit.smallbiz.nsw.gov.au/part/26/135/628
http://theconstructor.org/constrution/types-of-tendering-methods-in-construction/6372/
http://www.tendersinfo.com/blogs/procurement-process-understanding-types-of-tenders/
https://www.google.com.my/url?
sa=t&rct=j&q=&esrc=s&source=web&cd=10&ved=0CEwQFjAJ&url=http%3A%2F
%2Fconstructionsite.org.uk%2Findex.php%3F%2Fcontent%2Fview
%2F119%2F07e1cd7dca89a1678042477183b7ac3f%2Fopen
%2F38%2Fa5771bce93e200c36f7cd9dfd0e5deaa&ei=hGr8VNOOGoe0uASJ4oKQAg&usg=A
FQjCNH7JRlMYUC-2EiURFhmFgvhD21chQ&sig2=OdDsXedTgTQXZvHoBduTtg

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