Project Management For Tendering Process Dilemma

Construction of warehouse

Describe about the Project Management for Tendering Process Dilemma.

The dynamism of the current corporate world has resulted in huge projects that require a regular and on-time delivery of materials. As such, most companies have adopted the tendering process to solve the dilemma of regular orders. A tender refers to any submission (by a prospective supplier) as a response offer for the provision of services following an invitation to such offers. In laconic, it refers to the process by which an organization invites bids from prospective suppliers/contractors to supply specific materials, offers services or carry out a particular package of the construction work. In the construction industry, among the main tenders are those for selecting contractors to handle construction work. Arguably, tendering happens to be in its world of technicality and complexity. As such, a prospective constructor must design a convincing and appealing tender taking into account all the costs and benefits that would result from such a tender. On the other hand, tendering should adhere to the primary values of simplicity, fairness, accountability and clarity. Before tendering, a company must consider whether it meets the minimum requirement of the tender. It should further consider its financial capabilities, capacity, staff competence and experience, as well as its resources. Also, worth noting is the fact that price and quality serve as the basis for the competition element of any tender. The paper seeks to provide a succinct sample tender request assuming the role of the principal in a large asset industry.

Construction of warehouse

Tender introduction and instructions

The company has prepared tender documents in the reflection of AS 4120-1994 which sets out both the ethics as well as the obligations of the parties in a tender in a construction industry (Kruger, 2004). All interested parties must submit the tenders on the forms provided by the company in a sealed and completely labeled envelope in the name of this company. Bidders must prequalify and the deadline for the submission of the tender documents will be Wednesday 12, November 2016 (12 noon)

The tender work covers the delivery of all materials, equipment, human resource, and any other resources necessary to undertake the work described in this tender document or reasonably implied from the contract document. However, without a limit to the qualification of a potential supplier, the work consist of the delivery of ten 5-tonne heavy earth movers required in the construction of a warehouse. The earth movers must be fully fueled with drivers and any other technician required in the operation of the earth movers. The delivery must be per both the provisions of AS 4120-1994 which applies to all construction tenders (Institution of Civil Engineers Contracts, 2001).

Tender introduction and instructions

Project justification and contract process

To solve the dilemma of limited capacity to handle imported goods, the company wishes to construct three warehouses to provide additional storage facilities. In support of this objective, the company wished to invite all the potential bidders interested in undertaking the contract as described in this contract form and any other task either impliedly or implicitly detailed in the contract form. All bidders are required to pick tender documents from the company’s office at a non-refundable fee of $ 200 or download them free at the company’s website. Upon completing the tender forms, they must be submitted to the company’s secretary in the company of all other prequalification document and any other document that might be expressly or impliedly indicated in this contract form. Upon the receipt of all document from potential suppliers, the company procurement committee shall review the documents and choose the best bidder on several bases. The successful bidder shall be notified within seven days after the deadline for the submission of the tender forms. If applicable, the company will deliver the contract to the bidder by mail to be executed and returned to the company’s offices within 14 calendar days after the receipt of the contract. If the bidder (s) fails to return the contract and return it to the company’s office, the company will consider taking legal actions (Andrew, 2014), award the contract to another bidder (Birnie, 1997), and/or disqualify the successful bidder (s) from future bids (Brown, 2004). 

Financing of the project/sources of funds

All the expenses incurred by the bidder relating to the preparation and subsequent submission of the bids for this contract, or any other cost incurred in connection therewith shall be borne by the bidder. The company shall make no payment in connection with bids received or for any other effort the bidder might make in connection with this contract before the commencement of the work described in this contract form.  Further, the successful bidder must adhere to the Fair Wage Policy and all other provisions of AS 4120-1994 (Haberbush, 2000). Unless specified otherwise, the payment term relating to the delivery of the necessary items shall be net of 30 days. The company requires the successful bidder to invoice the company for the materials delivered and work undertaken in adherence to Bid solicitation. The company won’t take any liability for non-payment or late payment of invoices caused by the bidder’s failure to reference his contact number/order number. Bidders must note that payments should be made only at the request of the bidder through the issuance of an invoice. The successful bidder(s) might, however, apply for advance payment but not before completing at least 25% of the contract.

Scope of the tender: Definition of the project

Any bidder interested in bidding for this contract must supply the following documents. First, a bank statement signed by the bank manager to serve as a proof of the financial capacity and capability of the bidder to complete this contract fully (Arrowsmith and Hartley, 2002). Second, the bidder must supply a list of all the contract completed successfully in the three preceding years indicating clearly the value of each contract. The value of the previous contract will assist in deciding whether the bidder can handle the contract in question successfully (Whiteford, 2003). Third, the bidder must supply a schedule showing all the contract being undertaken currently, the value of each, and the expected completion time. Finally, the bidder must supply a list of the equipment and other necessary materials required to complete this contract indicating whether they are owned or rented by the bidder.

Bidders should submit the name of the drivers and other technicians required in the smooth operation of the heavy earth movers. The technicians must meet several requirements. First, they must not only be fully trained and qualified but also licensed technicians with a minimum of five-year experience in the operation of heavy earthmovers. They must also be knowledgeable in all the operations and features of a heavy earthmover. The qualification will serve as an assurance of professional work, personal error and professional liability notwithstanding (Haberbush, 2000). The minimum personnel requirements on this contract include five heavy earthmovers drivers, laborers, field technicians, and contract supervisor.

It’s mandatory for all the bidders to attend the tender information meeting tentatively scheduled on November 01, 2016 at 11.30 AM in the Committee Room. The purpose of such a meeting is to provide further details, if any, and to respond to any concern the bidders might have regarding the contract (Tiong and Alum, 1997).

The table below shows the company’s estimates to the tenderer  

Item	Description	Unit	Quantity	Unit price	Total
1	Site Preparation Clearing       Close cut clearing	sq.m sq.m	60,000 60,000	$ 3 $ 1	$ 180,000 $ 60,000
2	Excavation Earth Rock Rock face	cu.m cu.m cu.m	2,000 1,000 200	$ 10 $ 20 $ 20	$ 20,000 $ 20,000 $ 4,000
3	Labor	Number	50	$ 10,000	$ 500,000
4	Raw materials Fuel Ballast Stones Cement Bricks Timber Sand	Litres Tonne Tonne Tonne Tonne Sq.ft Tonne	4,000 4,000 6,000 2,000 500 5,000 2,000	$ 1.5 $ 200 $ 200 $ 500 $ 400 $ 5 $ 200	$ 6,000 $ 800,000 $ 1,200,000 $ 1,000,000 $ 200,000 $ 25,000 $ 400,000
5	Binders Heavy duty binder Binder HL 8	Tonne Tonne	200 500	$ 1000 $ 600	$ 200,000 $ 300,000
Total					$ 4,895,000

Under no circumstance will the company accept any deviation from the project as described in the tender document. However, under the grim circumstance that change to the project is inevitable, the successful bidder(s) should inform the company’s management for the necessary negotiation.

Requirement for quality assurance and quality control

Before the successful bidder(s) commences any construction work, the successful bidder(s) must supply the company with a Certificate of Clearance from the relevant construction authorities (Hannaway, 2000). They must further keep a regular update of construction progress and keep the company informed of the construction progress throughout the contract period. Any other provision notwithstanding, the company reserves the right to inspect the progress of the work at any time and seek address on any issue that its might be concerned with.

Project justification and contract process

Document management, reporting, and governance

Undoubtedly, document management plays a crucial role in any project work (Verdeaux, 2003). As such, the company requires the successful bidder(s) to keep the company updated on the progress of the construction work by maintaining all the necessary documents and submitting them to the company’s Secretary on a monthly basis. Prior to any payment, the bidder shall submit the necessary invoices and other relevant documents to the chief finance officer of the company for record purposes.

Disputes: Meditation and arbitration

Owing to the fact that, disputes are inevitable in any relation, the successful bidder(s) shall inform the company’s management of any dispute that might arise from the contract or any other issue related to the contract. Upon the notification of such a dispute or disagreement, the company’s managing director shall summon the concerned party to settle the dispute through arbitration. Litigation will serve as the last option.

Before the commencement of any work that the successful bidder will undertake, he/she must supply the company with a certificate of clearance from WSIB (Workplace Safety and Insurance Board) and any other relevant bodies (Treumer, 2004). The company requires the successful bidder to update its clearance certificate throughout the contract’s duration regularly. The company shall not issue any payment without a clearance certificate. Also, the successful bidder(S) must maintain at their effect, comprehensive general liability insurance cover for at least $ 1,000,000 and automobile liability insurance which includes all the automobiles handled by the successful bidder. The successful bidder(s) must maintain such insurance with an insurance body registered and operating in Australia

Binder’s checklist

Confirm the following before submitting the bid

		YES	NO
1	Have the bid been sealed and signed?
2	Have you enclosed the agreement to bond?
3	Have you met the prequalification requirements?
4	Have you completed all the price schedule in Form tender?
5	Have you enclosed all the required documents?

 

The company will not be liable for any loss incurred by the contractor while conducting any activity on the site.

References

Andrew, W., (2014). Integrated Design and Cost Management for Civil Engineers. CRC Pres

Arrowsmith, S., & Hartley, K. (Eds.). (2002). Public Procurement, Vol. I Cheltenham, UK:

Edward Elgar Publishing.

Birnie, J., (1997). Risk Allocation to the Construction Firm within a Private Finance Initiative

(PFI) Project. ARCOM Conference Proceedings, pp. 527-534.

Brown, A. (2004). “The Impact of the New Procurement Directive on Large Public Infrastructure

Projects: Competitive Dialogue or Better the Devil You Know?” Public Procurement Law Review, 13 (4): 160-177.

Haberbush, L., (2000). “The Government’s Exposure to Bid Rigging Schemes: A Critical Look

at the Sealed  Bidding Regime.” Public Contract Law Journal, 30 (1): 98-122.

Hannaway, P., (2000). “Oral Presentations in Negotiated Procurements: Panecea or Pandora’s

Box.”  Public Contract Law Journal, 29 (3): 455-509.

Institution of Civil Engineers Contracts (2001). Tendering for Civil Engineering Contracts.

Thomas Telford

Kruger, K., (2004). “Ban-on-Negotiations in Tendering Procedures: Undermining Best Value of

Money?”  Journal of Public Procurement 4 (3) pp. 397-436

Tiong K., and Alum J., (1997). “Evaluation of proposal for BOT projects”, International Journal

of Project Management, Vol. 15, No. 2, pp. 67-72.

Treumer, S. (2004) “Competitive Dialogue.” Public Procurement Law Review, 13 (4): 178-186

Verdeaux, J., (2003). “Public Procurement in the European Union and in the United States: A

Comparative Study.” Public Contract Law Journal, 32 (4): 713-738.

Whiteford, A. (2003). “Negotiated Procurements: Squandering the Benefit of the Bargain.”

Public Contract Law Journal, 32 (3): 509- 562.