FACULTY OF ENGINEERING

DEPARTMENT OF BUILDING AND CIVIL ENGINEERING

BACHELOR OF ENGINEERING IN CIVIL AND BUILDING ENGINEERING

TCBE 3107: SPECIFICATION WRITING

ODONGO JAMES PETER

YEAR OF STUDY

YR 3

REGISTRATION NUMBER:

17/U/16113/ECD/PD

Signature
…………………………………

ASSIGNMENT 1:

Write short notes on the following giving examples where applicable.

i. Expression of interest.
ii. Request for proposal.
iii. Invitation to bidder.
iv. Request for quotation
DATE OF SUBMISSION: 31st AUGUST 2018

SPECIFICATION WRITING

In accordance to the Wikipedia, A specification often refers to outstanding standard documented

for a material to satisfy, design, produce, or serve. A specification is often a type of technical
standard. (www.wikipedia.org/wiki/specification)

Specifications are some of the basic components of the contract agreement between the client
and the contractor.

This defines the requirements for materials to be used, products, and workmanship upon which
the contract is based on, the administration and the performance of the project. Specifications are
basically set to achieve the intended designed work result.

Specifications are written as sections for each subject and organized under (CSI) master format.

Master format is a list of titles that represent construction practices or work results that yield
from application of skills and procedure to the material, products or assemblies.

I. EXPRESSION OF INTEREST (EOI)

This is an invitation process involving the market place, to provide certain services or products to
the client. This process may in turn lead to a tender process or directly to a negotiation with one
or several suppliers.

An expression of interest is an informal offer made by a strategic or financial buyer for the
purchase of a business. The primary purpose is to suggest a valuation range that a buyer is
willing to pay for a company. Investment bankers usually request an EOI in their bidding process
to separate all potential buyers into a smaller, more realistic list of qualified buyers that may be a
good fit for the seller.

According to Corporate Finance Institution, an Expression of interest is one of the initial

transaction documents shared by the buyer with the seller in a potential M&A deal. The EOI
indicates a serious interest from the buyer that their company would be interested to a certain
valuation and acquire the sellers company through a formal offer
https://corporatefinanceinstitute.com/resources/knowledge/finance/what-is-expression-of-
interest-eoi/

CONTENTS OF EXPRESSION OF INTEREST (EOI)

i. Purchase price
This covers the purchase consideration the buyer is ready to pay on cash free and debt free basis
at the time of closing the deal. The buyer or client also reserves the right to change the terms of
the payment consideration and may choose not to proceed with the transaction, as the document
is merely an expression of interest and non-binding on either party.

ii. Valuation methodology

It mentions the basis of the evaluation and the key assumptions taken by the buyer in order to
achieve the valuation. The offer is based on the seller’s future projections.

iii. Due diligence

The buyer then asks for an opportunity to conduct due diligence with complete satisfaction. It
asks for an opportunity to conduct due diligence on both the business and the seller. It also
highlights major areas that the buyer would be looking at while conducting the same. It may
include diligence on finance, legal, business, customer, contracts, sales and marketing, Human
resources, facility, technology, plant machinery etc.

iv. Transaction structure.

The buyer explains the transaction structure they are interested in. It deals with whether they are
interested in a complete buyout of the company or just a carve-out of any division. Mentions the
type of assets and the contracts the buyer would be interested in taking with the earn outs
structure. Also mentions how the buyer is going to fund the purchase price for the transaction,
which can either be from the cash balance on their balance sheet or bank loan.

v. Management Retention Plan.

The buyer also indicates its plans for the senior management of the seller and the type of
arrangements they can deal with.

vi. Transition and support services.

Here the buyer mentions that they would need transition support for a certain period of time to
effectively manage the business. It also says that no additional amount shall be paid apart form
the purchase price for the services.

vii. Approvals required form transaction.

The buyer would require approval from its board of directors and hence, it informs the seller
about the same so that proper timelines can be decided at an early stage.

viii. Conduct of business.

The buyer expects that the seller will conduct the business in normal course without any material
adverse impact on then business. In case the seller intends to engage in any kind of structural
change, intimation to the buyer should be done.

ix. Transaction Expenses.

The buyer makes it very clear that any transaction expenses incurred would be met by each party
on its own. Expenses can be related to due diligence, negotiation, drafting of legal agreements,
professional and legal support, etc.

x. Confidentiality

The buyer makes this proposal as an interested party to enter the transaction. It says that neither
the name of the company nor the purchase consideration should be disclosed to a third party
without the written consent of the buyer. The seller is supposed to disclose the identity only after
definitive agreements are signed.

xi. Non-binding agreement

The buyer makes it explicitly clear that it is just an expression of interest between the parties and
no party is bound to sign the deal. Neither buyer nor seller would be in position to claim any kind
of damage with reference to the EOI.

Format for Submission of Expression of Interest (EOI)

Brief description for Expression of Interest

Name of the project
Location of the power
plant
Name of Authority
Eligible EPC firms
Date of Submission of
EOI
Email
Selection Process
Contents of the EOI

Example of a Cover letter for Expression of Interest

(To be on the Applicant/Lead Member’s Letter Head)

To,
Project Investigator,
SCOPEBIG,
Center for Study of Science Technology and Policy (CSTEP),
18, Mayura Street,
10th Cross, Papanna Layout,
RMV 2nd Stage, Nagashettyhalli,
Bengaluru -560094, India

Subject: Submission of Expression of Interest for the proposed 3 MW Solar Thermal Biomass
Hybrid Power Plant

Sir,
In response to the Invitation for Expressions of Interest published on 15.11.2016 for setting-up a
3 MW Solar Thermal-Biomass Hybrid Power plant, Bihar, we
_________________________________ (hereby referred as Applicant) would like to express
our interest to undertake the EPC activities as mentioned in the notification. As instructed, we
have enclosed all the necessary documents, as per the guidelines/format provided, for your
information and records.

Thank You

Sincerely,

(Signature)

Name & Designation:

Seal:

II. REQUEST FOR PROPOSAL (RFP)

Through a bidding process, an invitation is presented for suppliers to submit a proposal on a

specific commodity or service.

Request for proposal is a competitive procurement process in which the client identifies
requirements and solicits potential offerors to provide innovative solutions. It encourages
offerors to provide the best combination of price, quality, and services.
It is Also a type of bidding solicitation in which a company or organization announces that
funding is available for a particular project or program and companies can place bids for the
project’s completion\. It outlines the bidding process and contract terms, and provides guidance
on how the bid should be formatted and presented. A request for proposal for a specific
programmed may require the company to review the bids to not only examine their feasibility
but also the health of the bidding company and the ability of the bidder to actually do what is
proposed. (https://www.investopedia.com/terms/r/requestfor-
proposal.asp)

Advantages of a request of proposal.

 Allows the client to seek an offerors solution to an urgency requirement.

 Allows the client to provide offerors with flexibility in the content of their proposals i9n
terms of materials, services or construction
 Allows client to ensure just and fair competition among qualified offerors.
 Allows clients to conduct negotiation.
 Allows clients to consider subjective criteria other than the price in the award process.

III. INVITATION TO BIDDERS

Invitation to Bid is a process and document where the client invites offerors to submit a bid to
this invitations of a Bid for a referenced subject.

Also called a sealed bid, is a call to contractors to submit a proposal on project for a specific
product or service. While an Invitation to Bid is very similar to a Request for proposal, It’s
concerned with the pricing more so than the conceptual ideas of the project.

It can includes the following documents as sections;

Section 1: Letter of Invitation

Contains the details of the submission procedures, where to submit, Date of submission, and
other general guidelines.

Section 2: Instruction to bidders

Contains the definitions of all technical terms in the contract.

Can be in;

 General instructions.
 Contents of bid
 Preparation of bid
 Submission and opening of Bid
  Evaluation of Bid
 Award of contract in How to accept, reject or render non responsive the bid

Section 3; Schedule of requirements and related services

Section 4; Bid submission as a specified letter format by supplier to the client.

Section 5; Documents establishing the eligibility and qualifications of the bidder.

Section 6; Technical Bid form

 This involves expertise of the firm.

 Scope of supply, technical specifications.
 Personnel by the firm.

Section 7; Price schedule form.

Section 8; Form for Bid security.

Section 9; Long-term agreement.

IV. REQUEST FOR QUOTATION (RFQ)

A Request for Quotation (RFQ) is a standard business process whose is to invite suppliers into a
bidding process to bid on specific products or services. According to Wikipedia, an RFQ
typically involves more than the price per item. Information like payment terms, quality level per
item or contract length may be requested during the bidding process.

To receive correct quotes, RFQ often include the specification of the items/services to make sure
all the suppliers are bidding on the same item/service. Logically the more detailed the
specifications, the more accurate the quote will be and comparable to the other suppliers.

(wikipedia.org/wiki/request_for_quotation)

It is suggested that request for quotation is a procurement method that is used for small value
procurement method that is used for small value procurements of readily available off-the-shelf
goods, small value construction works, or a small value services procurements. This procurement
method is also known as invitation to quote and shopping, and it does not require the preparation
of tender documents to the same extent as open tendering, request for proposals or two-stage
tendering.

The invitations are not complex, and this method is considered non-competitive because the
procuring entity determines which contractors, suppliers or services providers to request
quotations from as long as a minimum of three invited.