Tuesday, May 1, 2012

Construction tender bidding procedure and process

In construction industry, the prominent words is "PROJECT" and "TENDER". There are few ways in securing  projects on construction. Among them are "direct Negotiation project", "Direct award project" and the most popular is "Tender Bidding".

Here the discussion will only focus on the construction project that need to be secure through the "TENDER BIDDING". In this procedure or process, client usually will applied few steps of filtering in order to select the best contractor  to do their construction work.

The first step will be the process of "call for tender". In this steps they will specifies what is their requirement, where is the exact location for the construction site, who can or allow to participate in this tender and etc.

The second steps will be the tender submission by tenderer. For all contractor that involve in construction industry, this is crucial steps to ensure their advancement to the next steps of this tendering process. In this process, client will review the tender document submitted. They will check for the "completeness of the tender document". At this stage client will ensure that all information required had been submitted by contractor together in their tender document. usually the required documents are financial background, resources capability, contractor background, current work load and also comments from third party with regards to the contractor performance in their past or present construction work that they undertake. All of these requirement actually spell-out under the section namely " instruction to tenderer". This is to be fair to contractor to eneable them prepare their tender document accordingly.

The third steps will be "reviewing the submitted information". During this procedure, client will read and examine whether the contractor is capable to carried the construction works. Client will rate all the information starting from contractor financial capability, Availabilities of their technical and supporting staff , machineries, plant and equipment that they have for the construction works, contractor past experience and also their current experience. This process will help client to estimate if the contractor will be able to carried out the construction work successfully. Let say  even-though Contractor A having vast experience in the similar project and having good performance and tract record in the past, however after weighing the financial capacity against their current work load, client found out that Contractor A is now overloaded, the construction work will not be awarded to Contractor A. This is mainly due to higher chances that Contractor A will not be able to deliver the project within the time frame required.

The final stage of this tender evaluation process is " tender offered price". In actual fact, before call for a tender, client already complete their own estimation cost. Hence in this process it is about choosing the most close offered price with their own estimate.This stage will determine which contractor will be offered the construction work.

To wrap up this discussion and if you are contractor that always fail in your tender bidding, than these are few key factor that you need to review.
1. Completeness of the tender document,
2. Financial against current work load.
3. Similar past experience.
4. comments from third party on your past and current performance.
5. Current resources that you have ( Technical staff, machine, Plant, Equipment and supporting staff.)
6. Financial against your offered price.
7. stay competitive in your offer by knowing the market rate in construction industry.

Happy tendering.