[TechTalk]: Do you know "WHAT IS A TENDER DOCUMENT?"

An engineering college going subscriber of bricks-n-mortar.com has sent us an email asking,
"WHAT IS A TENDER DOCUMENT?
AND WHAT, IN A NUT-SHELL, DOES IT COMPRISE OF ESSENTIALLY?"


Like George, we understand there are millions & millions of people who must have heard or read this word- "TENDER DOCUMENT", but who always wondered what this Document actually mean/ consist of.

Team@Bricks-n-Mortar today would let you know the basics of the Tender Document and its contents in brief so that the next time you read it somewhere, you are not ignorant anymore. So, lets start right away.....





LETS KNOW THE VERY BASIC FIRST...

A project essentially comprises of the Owner, the Architect and/or Consultant, the Contractor and the Vendors & Suppliers. Any of the two agencies out of these when come together to work, they agree and commit to work on certain guidelines, which are in the form of a structured quasi-legal document, commonly known as the T
ender Document for that particular work.

In fact, bids and quotations for any particular project work are invited through a Tender Document only, which in later stages in converted into a Contract between the Owner and the successful/ shortlisted bidder.

CONTENTS OF A TYPICAL TENDER...

The tender document essentially explains about the project and its requirements to the intending bidders. The typical contents of a tender document are:
  1. Preamble
  2. Notice inviting Tenders
  3. Instructions to the bidders
  4. Form of submission
  5. Documents required to be submitted along with the bid
  6. Draft of the Agreement proposed to be signed between the two Parties
  7. General Conditions of Contract
  8. Special Conditions of Contract
  9. Trade Specifications including that for Material & Workmanship
  10. Bill of Quantities (BOQ)
  11. List of Materials proposed to be issued by the Owner
  12. Tender drawings and sketches
The above-mentioned contents are now described in brief hereunder so as to let the reader of this article understand what a particular head means in essence.

Preamble:

This part furnishes the general information about the project in brief to the intended bidders. It mainly states the scope of works desired to be executed.

Notice Inviting Tenders (NIT)

A typical NIT furnishes the following information to the Parties:
  • Name of the work including the brief details of the same
  • Estimated total project cost & time of completion desired by the Owner
  • Name and address of the Owner for Tender submission and future correspondence
  • Date, time and place by which the bids should be submitted
  • The earnest money to be deposited with the bid
  • Other relevant information as perceived by the Owner to be obtained from the bidder
Instructions to the bidders

This section provides the essential information to the bidders as what is required to be done; what some of the provisions & clauses mean; and what is likely to be the interpretation of these provisions and clauses.

Form of Submission

This section summarizes the instructions about who is authorized to sign the bid on behalf of the bidder, and in what form this authority is to be furnished. It is mostly a set format, which the bidder follows while submitting his bid, subject to he not having any deviations from the written lines.

Documents required to be submitted along with Bid

The Owner often requires certain quasi-legal information from the bidders for their records and legal purposes. These may include the Income Tax related information, Creditworthiness statement from the bidder’s bank, statement of engineering staff, equipment and other resources, experience certificates, etc. Such information lets the Owner know about the credentials of the prospective bidders.

Draft of the Agreement to be signed

The short-listed and selected Party, chosen to carry out the works after due evaluation process, is required to sign an Agreement with the Owner so as to enter into a contract. This Agreement is required by both the Parties involved to safeguard their respective as well as mutual interests. In this context, a draft of the same is formed an integral part of the Tender Document so that the bidder is aware of what it will contain, and can also suggest any changes and/or modifications therein if he does feel so to protect his interests.

General & Special Conditions of Contract

These are more or less a verbatim copied from the standard documents of the State or National Regulatory bodies with practically the same guidelines for almost all the projects of a certain kind. The purpose of providing these guidelines is to let the bidder understand the general technical and quasi-legal bindings that he shall be required have to follow once entering into the Contract.

Specifications & Bill of Quantities (BOQ)

The Specifications specify the guidelines based on which the works are to be carried out in terms of quality. The Bill of Quantities (BOQ) state the Item Rate works listed along with the estimated figures of quantities against the respective items. The bidders are required to state their quotes (rates) for these respective items, based on which their total bid amount is reflected for the Project. The other part of it also lists out the materials that the Owner intends to supply to the Contractor and the recovery rates for the same during reconciliation period.

Tender Drawings & Sketches

The indicative drawings and plans of the major building(s)/ structure(s) are furnished in this section so as to let the bidder envisage about the nature and extent of work involved in the proposed work/ project. The bidder can thus evaluate the necessary resources, material and project cost taking ample cues and planning from these tender drawings.

IN A NUTSHELL...

A Tender Document is therefore nothing but a set quasi-legal guidelines put together in a structured format depending upon various factors like project/ work type; size, scale and nature of the project; and related technicalities involved. Separate works need separate tenders to be floated, which essentially depend upon how many parties are planned to be involved for a particular work/ project. Inviting bids from contractors on the basis of tenders floated as such form the basis for actual work taking shape after the process of planning and conceptualization.

[Filed under "TechTalk, Readers' Queries" category by Team@Bricks-n-Mortar.com]

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4 ||| LEAVE YOUR COMMENT:

  1. What is the difference between a tender and a contract?

    ReplyDelete
  2. Dear Melanie,
    The basic difference between a tender and contract documents are the following:
    - A Tender is a document which is used to ask for quotation and bids from various shortlisted agencies, whereas a Contract document is the customized form of the Tender which is made with that one party which is finally shortlisted to do a particular work by the Owner.

    - A Tender document is a set of guidelines to the probable parties, while a Contract document is a set of agreement which a Contractor must follow while doing an assigned work.

    - A Tender document is only form of inviting bids and is not legally binding, whereas a Contract document is a legally binding agreement between the Owner and the Contractor.

    As such, a Contract document is nothing but an extended and customized form of a Tender document which contains all the texts of a tender in addition to legally binding agreement and project specific understandings.

    Hope you got your answer.
    - Shelly

    ReplyDelete
  3. Hi,
    I have been reading a book on tendering and am a little confused by tendering and procurement. The book states “The method employed to select a contractor to carry out work can be done in one of three ways”:
    1. Open tendering
    2. Selective tendering
    3. Negotiated tendering
    I thought that I understood this until I came across the terms:
    1. Single stage selective tendering
    2. Two stage selective tendering
    3. Selective tendering for design and build

    ReplyDelete
  4. hi ma name is jennifer and i want the definitions of tender and contract document

    ReplyDelete

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