COMMON TENDER ESTIMATION MISTAKE

Common Tender Estimation Mistake by Contractor.
Tender estimation is a very important area for a contractor in order to secure a contract. Their estimation must be very competitive to ensure that they will win in their bidding. However the common scenarios that repetitively happen among the tenderer are always as the following.

1. The cheaper the construction cost, the higher their chances to secure a contract.
2. Assumption always being done without visiting the actual site, thus they will not be able to provide a cost that is as accurate as needed to suite the site condition.
3. Most of the time the contractor always by pass the standard condition of contract and also the special condition of contract which normally being include inside the tender document. Thus, as the result, they will only estimate base on what is inside the bill of quantity and the tender drawing. Usually inside the bill of quantity, there is an item listed as "other necessary work that deem to be necessary to complete the work ". This is where the special condition of contract, standard condition of contract, standard specification and special specification requirement should not being assume.

There are cases that there are some work deem to be necessary to complete the work that being shown in the tender drawing but it was not specifically being spell out in the bill of quantity that had cause the awarded contractor fail to price the cost to the particular work. As the result during construction this contractor have raised their concern over this issue of the particular work by mentioning that it was not included in the contract as it has not being listed out inside the bill of quantity. After a thorough study of the contract document, it was found out that there is a clause in the special condition of contract mentioning that if there is any necessary work that deem to be necessary to complete the project and had being shown in the tender drawing, contractor should price it under the item "necessary work to complete the job". Because of this clause, the contractor have to do the work out of his own expenses which the cost cannot be claim from the client as the variation or addition work. Therefore it is very important for contractor to properly study the tender document and the drawing in order to give a competitive tender price that will not become a deadly trap to their construction work.
All the illustration and scenarios above are not the only common mistake done in preparing the cost estimation for a tender but there are many other such as fail to know the market price, calculation error or even for the sake to penetrate the market. Hence in preparing the tender pricing, contractors need to look into all area that will affect the construction work.
Contractors, Good luck and best wishes for you.