AR6703 Professional Practice and Ethics

UNIT – 3 LECTURE BY A.SIVARAMAN

TENDER & CONTRACT

CONTENT:
Part 1: Tender
 Definition
 Types of Tenders
 Open and closed tenders
 Conditions of tender
o Tender Notice
 Tender documents
 Concept of EMD
 Submission of tender
 Tender scrutiny
 Tender analysis
o Recommendations
o Work order
 E-tendering (advantages, procedure, conditions).

Part 2: Contract
 Definition
o Contract agreement
o its necessity – Contents (Articles of Agreement,Terms and Conditions,
Bills of Quantities and specifications, Appendix)
 Certification of Contractors Bills at various stages.

Part 3: New trends in project formulation and different types of execution

(BOT, DBOT, BOLT, BOO, etc.)
 Execution of projects
 The process (Expression of interest, Request for Proposal, Mode of Evaluation of
Bids, Award of work)

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1 PROFESSIONAL PRACTICE AND ETHICS
LECTURE BY ASSO.PROF.A.SIVARAMAN M.ARCH (GENERAL ARCHITECTURE).,MCA.,AIIA
Part 1 TENDER

• Calling for Tenders

• Tender Documents
• Open and Closed Tenders
• Item Rate, Lump sum, Labour and Demolition
Tender
• Conditions of Tender
• Submission of Tender
• Scrutiny and Recommendations
Definition
• Tenders are offers made by contractors to execute a project on some pre-determined data
and conditions, for a certain amount.
• Usually written, may be oral or partly written and partly oral
• The work may be: construction work as defined by drawings and specification, supply of
materials/labor of a specified kind, transport of materials, demolition of a building and
disposing off the debris etc.
Procedures
• Inviting notices
• Opening of tenders
• Tabulation of tenders
• Acceptance of tenders
• Negotiations
• Preparation of schedule and documents
Invitation to Tender
• When all preliminaries for a project are completed and the owner has decided to proceed
with the work, tenders are invited in the following ways:
• Negotiated tender
• Limited competition or selective tendering
• Open competition including international competitive tendering
Negotiated Tender
• The price is negotiated with a single contractor. Since there is no competition to quote the
price may be higher.
• Negotiated tenders are okay and to the owner’s advantage under the following
circumstances:
• The firm chosen is one in which the owner and architect have confidence and whose
integrity an reliability is well established by either of the two or both
• The work to be carried out is within the special scope and experience of the firm
• In certain limited type of work, there may be only one firm capable of undertaking the job,
and negotiating with it may be the only reasonable method of obtaining a tender

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2 PROFESSIONAL PRACTICE AND ETHICS
LECTURE BY ASSO.PROF.A.SIVARAMAN M.ARCH (GENERAL ARCHITECTURE).,MCA.,AIIA
Negotiated Tender - Procedure
• Architect on behalf of the owner invites the firm to tender with brief description of the
scope of work, approximate dates of commencement and completion of work, any special
requirement and the proposed contracting procedure
• Contractor prepares a priced BOQ
• Rates examined by architect and owner, compared with known market rates based on
similar executed or ongoing projects
Limited Competitive Tender
• Usually adopted for private jobs
• Owner invites tenders from a few known contractors with whom he has worked before and
who have a history of giving excellent results
• This procedure is recommended for monumental structures, industrial construction and
work requiring specialised knowledge and equipment

Open Competitive Tender

• Tenders invited by public advertisement
• Rules require government and other public contracts to be advertised publicly
• Any contractor willing, with requisite finance and equipment to complete the work
satisfactorily can submit tender

Open Tender

Advantages
• Safeguards contractors from being denied tendering opportunities for unjust reasons
• Protects the government or local authorities concerned from possible insinuations and
favouritism
• Provides an opportunity for having the work done at a minimum cost to the public, by
securing the benefit of keen bidding competition

Disadvantage and Remedy

• The firm submitting the lowest tender may be unsuitable for carrying out the work,
resulting in waste of time and effort
• Prequalification helps eliminate unsuitable contractors
• Intending tenderers can be invited to apply for selection and registration as qualified
tenderer
• Architect reviews the qualifications of the tenderers on the basis of information provided by
them in a prescribed format supplied
Prescribed Format
• Past experience
• Major works on hand
• Technical personnel engaged
• Financial capacity
• Equipments to be used
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3 PROFESSIONAL PRACTICE AND ETHICS
LECTURE BY ASSO.PROF.A.SIVARAMAN M.ARCH (GENERAL ARCHITECTURE).,MCA.,AIIA
 • Any other relevant information
• Blank tender forms are issued only to those contractors who in the judgement of the
architect has the requisite qualifications
Advertisement for Tenders
• To create interest among considerable number of potential bidders for competition
• City, regional or national newspapers with large circulation and appropriate technical
journals are the best medium
• Small projects confined to local newspapers
• Advertisement should appear well in advance, sufficient number of times in regular interval
under a heading ‘Tender Notice’
• From 2-3 weeks to 4-6 months depending upon scale of project
Pre-Tender Conference
• For clarifications near the site of the project
• The intended tenderers attend at their own cost
• All clarifications, special aspects of the project and tendering process addressed in detail
• Site visit done to understand and get a feel of site and likely obstacles if any in project in
future
Tender Notice
Short and Concise with information on:
• 1. Mode of submitting tender: in sealed cover to maintain secrecy
• 2. Standard form to be filled: ensures uniformity, ease of scrutiny and comparison
• 3. Name and details of the inviting authority
• 4. Nature of works and its location
• 5. Estimated cost of work
• 6. Time limit
• 7. Availability of data and forms: Where, from whom, at what cost, and up to which date
blank tender forms and specifications may be obtained, whether a refund will be made
upon return in a satisfactory condition
• 8. Earnest money required along with the tender: Security in the form of earnest money is
demanded along with the completed bid to make reasonably certain that the bidder is
willing to sign the contract if the work is assigned to him

Earnest Money (Refundable):

• The purpose for which security is required
• The character of the form of security: cash, bank guarantee, cheque or treasury receipt or
challan with the name of the payee
• The amount of security: generally about 1% of the estimated cost of the work- this covers
expenses incurred to re-do the whole process, in case the successful bidder fails to enter
into contract in time
• Return of the deposits: the number of days within which the amount will be refunded to
unsuccessful bidders

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4 PROFESSIONAL PRACTICE AND ETHICS
LECTURE BY ASSO.PROF.A.SIVARAMAN M.ARCH (GENERAL ARCHITECTURE).,MCA.,AIIA
 9. Security deposit: The amount which the successful bidder will have to deposit as security
for satisfactory performance, and the procedure for recovering the security deposit should
be stated in advertisement
10. Information regarding plans, blueprints etc.: The advertisement should state explicitly
where and when plans and detailed drawings can be examined. They are often not supplied
to bidders as this would involve considerable expense and any secret or confidential aspects
may be revealed
11. Information regarding permission to import equipment not available in India: Such
information and the restriction on disposal of the equipment after completion of the work,
if any, should be made available whenever relevant
12. Whether successful foreign contractors would be permitted: This would be in order to
engage any approved local subcontractor or to enter into a joint venture with Indian
contractors or firms. Information in this regard should be stated in the case of international
competitive bidding
13. The last date, the place, and the time of receipt of sealed bids: All these facts have to
be mentioned in the text
14. The date, time, place and procedure of opening of the tender: All these facts should be
mentioned
15. Reservation of right to reject bids: The owner should make it clear that the right to
accept a tender which is higher than the lowest one, or to reject any or all tenders without
assigning any reason is reserved
16. Award of Contract: The time required for consideration and scrutiny of tenders, after
which the contract is likely to be awarded, should be stated. Normally this period should be
90 days or less from the date of the opening of tenders
17. Whom to contact for further information: This should be clearly stated
Contents
• Tender notice
• Instructions to tenderers
• Standard form of contractor’s offer
• Articles of agreement
• Conditions of contract
• Specifications
• Schedule/Bill of quantities

Procedures
• After tenders are received by the stipulated date, Project Manager checks each and every
tender carefully to find out if there are any omissions, mistakes in calculations, overwriting,
etc.
• As part of his scrutiny he prepares a tabulated analysis of all the tenders

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5 PROFESSIONAL PRACTICE AND ETHICS
LECTURE BY ASSO.PROF.A.SIVARAMAN M.ARCH (GENERAL ARCHITECTURE).,MCA.,AIIA
Tabulation
Items Contractor A Contractor B Contractor C Remarks
Excavation
PCC
Rubble
Plinth beam
Backfilling
PCC plinth
Masonry
Slab-beams
Windows
Doors
TOTAL
Report
• A report is prepared based on the tender analysis and scrutiny
• On the basis of the report architect makes recommendation to client about acceptance of a
particular tender
Types of Tender:
• Lump sum tender – when the project is small and the drawings can be fairly exhaustive
• Item-rate tenders – normal practice among architects
• Percentage tenders – based on prescribed Schedule of Rates of PWD/Govt. agencies

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6 PROFESSIONAL PRACTICE AND ETHICS
LECTURE BY ASSO.PROF.A.SIVARAMAN M.ARCH (GENERAL ARCHITECTURE).,MCA.,AIIA