Construction Bids and Tenders Tips

Invitation to tender

When all the preliminaries are completed and the owner has decided to proceed with the work, tenders are invited. Legally this is an attempt to check if there would be interested contractors to carry out the work within the estimated limit of time and finance. The invitation to Tender is not binding to the owner to proceed with the work and does not cause any liability for any expenses to which contractors would spend in preparing and submitting their construction bids.

Information to be given in a Call for Bids Notice

The notice must be as short as possible, but conveying an adequate idea of the nature and scope of the proposed work and all essential details.
The text of a good advertisement should at least include the following information:
Mode of submitted bids: Bidders should be asked to submit bids in sealed covers, in order to maintain secrecy of quotations.
Form of Bid: It is advisable to get all offers in the same form to facilitate scrutiny, and comparison
Name of the inviting authority: This helps the bidder know the persons he will have to deal with and the co-operation he may receive, if his bid is accepted, and such may also affect his quotation.
Nature of the work and its location: If the nature and location of work is within his operating area, the prospective contractor will want to learn more about the job; else he may not waste time in reading further details
Estimated cost of the work: This most briefly indicates the magnitude of the work and enables him o see whether it is too small to interest him or perhaps too large for him to handle.
Time Limit: The time limit within which the work is to be completed should be mentioned. This will be of great help to the bidder to work out a realistic price of the work.. The time limit may influence the type and number of construction equipments and workers to be employed, and will vitally affect the contractor’s bid.
The availability of Data and forms:
where, from whom, at what cost and up to which date blank bid forms and specifications may be obtained and whether a refund will be made upon their return in satisfactory conditions.
Earnest money required with the bid: The amount and form of security; whether the amount will be accepted i the form of cash, bank guarantee, check or others. Also the number of days within which the amount will be refunded to the unsuccessful bidder.
Performance security: The amount, form, and procedure of recovering.
Information regarding drawings: where and when drawings can be examined by bidders.
Last date, place and time of receipt of sealed bid.
The date, time and place and procedure of opening bids.
Reservation to reject bids.

Tips for consideration in preparing construction bids

Careful study of the contract documents: The contract documents issued to the contractor or supplied for his inspection include general contract conditions, drawings, specifications, bills of quantities etc. These documents are to be studied carefully to check if any unusual conditions, specifications, or any feature of the work would demand special attention during pricing.
Sub-contractor’s work: Make relative inquiries about prices with sub-contractors and material suppliers for their respective portions of the job.
Site visit: This is important to ascertain the conditions under which the work has to be carried out and their impact on pricing.

* Difficulty to access the site
* Limited space on the site for vehicle movements
* Type of soil and depth of water table
* Availability of space for storing materials on site
* Availability of materials, their sources and prevailing market prices
* Local availability of skilled and unskilled labor, prevailing wages for workmen
* Source and cost of water needed for construction
* Power and lighting source, and the cost of erecting, marinating and dismantling power connection to the site

Time for completion: The bidder then estimates the length of time the work will take and the number and category of permanent staff suggested by the nature of the work for construction management . This helps to calculate the establishment charges.
Temporary works: The value of any temporary works needed to commence the construction and to clear away on completion, such as temporary office required for construction management purpose, store sheds for building materials, access road, water supply, depreciation of construction equipments, insurances, taxes, etc.