Tendering procedures according to FIDIC
Contents
Foreword Acknowledgements Introduction Procedural Flowchart Procedure and Notes 1.0 \
Project Strategy 1.1 1.2
2.0
Prequalificalion of Tenderers 2.1 2.2 2.3 2.4 2.5 2.6
3.0
Preparation of Prequalilication Documents Invitation to Prequalify Issue and Submission of Prequalification Documents Analysis of Prequalification Applications Selection of Tenderers Notification of Applicants
Obtaining Tcndcrs 3.1 3.2 3.3 3.4 3.5 3.6
4.0
Establishment of Procurement Mcthod and Form of Tendering Preparation of Programmes
Prcparation of Tcndcr Documcnts Issue of Tender Documents Visit to Site by Tenderers Tenderers' Queries Addenda to Tender Documents Submission and Receipt of Tenders
Opening of Tenders 4. J
Opening of Tenders
5.0 Evaluation ofTendcrs 5.1 5.2 5.3 5.4
Review ofTendcrs Tcnders containing Deviations Adjudication ofTenders Rejection of all Tenders
6.0 Award of Contract
\
6.l 6.2 6.3 6.4
Issuc of Lettcr of Acceptance Pcrformancc Sccurity Prcparation of Contract Agrcement Notification of Unsucccssful Tendcrers
Appendices I Modcls for Implcmcntation of Projects II Prcqualilication Form for Contractors III Form ofTendcr Security
Foreword The International Federation of Consulting Engineers (FIDIC) published the first edition of Tendering Procedure in 1982. The first edition primarily addressed procedures which FIDIC recommended for the selection of tenderers and the preparation and evaluation of tenders for civil engineering contracts. The document reflected the provisions of the then current (third edition) of the FIDIC Conditions of Contract (International) for Works of Civil Engineering Construction.
\
Following the publication of the 4th edition of the Conditions of Contract for Works of Civil Engineering Construction and the 3rd edition of the Conditions of Contract for Electrical and Mechanical Works in 1987, and taking into account current thinking of the major international financing institutions (lFIs), FIDIC decided to review and up-date the 1982 edition, reflecting current practice in the industry. In view of the wide acceptance and acknowledged usefulness of the first edition, it was further decided to retain, as far as possible, the basic layout and format in ordcr that users of the document would still be familiar with the procedures described.
Much of the up-dating work has involved modification of terminology .----. '. and procedures to make the document equally applicable in respect of both civil works and electrical and mechanical projects. In addition, the document more closely ref1ects the procedures recommended by the IFIs, and draws attention to those areas where the IFI provisions are mandatory. The document provides a freedom and flexibility which is not found in all similar documents. This means that the procedures described can be adapted and used in conjunction with, for example, procedures normally adopted by employers or procedures required by the IFIs. Users should however be aware of the prevailing requirements and/or restrictions introduced when using parallel procedures and ensure that all mandatory provisions of sl\ch procedures are properly incorporated. A useful addition to be found in this new edition is the first chapter entitled Project Strategy, which provides guidelines and practical suggestions on how to establish an elTcctivc and appropriate mcthod for project procurement. This chapter is supported by a new appendix (Appendix 1) which shows, in tabular form, the different models commonly used for project implementation. FIDIC believes that the new edition provides a comprehensive and complete procedure, compatible with other recognised tendering procedures, which will encourage and enhance the ultimate objective of receiving responsive and compctitive tenders.
Acknowledgements FIDIC extends special thanks to Lars Holten Petersen and Carsten
Petersen of Carl Bro Group A/S, Denmark, for acting as principal drafters of this documellt. This contribution to FIDIC and the profession is highly appreciated. The draft was reviewed initially by Hans T. Kristensen of Sweden and Tom Knoll of the UK and subsequently by the World Bank and the
International comments.
Bar
Association,
all
of whom
provided
valuable
The preparation was carried out under the general direction of the FIDIC
Contracts Committee comprising K.B. (Tony) Norris. Consulting Engineer, UK; Michael Mortimer-Hawkins of SwcdPower AB. Sweden; and John Bowcock of Sir Alexander Gibb & Partners Lid., UK.
FlOle wishes to record its appreciation of the time and effort devoted by all the above.
The ultimate decision on the form and content of the document rests with FIDIC.
Introduction This document presents a systematic approach for tendering and awarding of contracts for international construction projects. It is intended to assist the employer/engineer to receive sound competitive tenders in accordance with the tender documents so that they can be quickly and efficiently assessed. At the same time, an effort has been made to provide the opportunity and incentive to contractors to respond easily to invitations to tender for projects which they are qualified to implement. It is hoped that the adoption of this procedure will minimise tendering costs and ensure that all tenderers receive a fair and equal opportunity to submit their olTers on a reasonable and comparable basis. Experience has shown that for projects involving international tendering, prequalification is desirable since it enables the employer/engineer to establish the competence of companies subsequently invited to tender. It is also in the interest of contractors since, if prequalified, they will know that they are competing against a limited number of other firms, all of whom possess the required competence and capability. The model procedure described in the text is accompanied by notes which, for ease of reference, follow each clause. The notes, in italics, are added to the text in order to expand upon the more important aspects of each clause and, where appropriate, give alternative courses of action that may have to be considered according to circumstances. The text is illustrated by a flow chart which follows this introduction and serves as a summary. Both the text and the notes have been kept as brief as possible in order that the booklet can be easily used as a working document. The procedure is suitable for tendering for most international construction works, but it may be adapted to suit the particular requirements occasioned by the size and complexity of a project, and any special conditions imposed by the established procedures of the employer or the financing institutions. It reflects good current practice. FIDIC recommends its use by employers, engineers, contractors and others involved in the international construction industry. The procedure is related to FIDIC's "Conditions of Contract for Works of Civil Engineering Construction" and "Conditions of Contract for Electrical and Mechanical Works" but can be readily adapted to any acceptable contract form.
\
Procedure and Notes 1.0
PROJECT STRATEGY
1.1
Establishment of Procurement Method and Form of Tendering In the context of this document the word "project" covers all the stages from the initial idea to construct a given physical asset to the final taking-over by the employer of the completed work. Projects may be organized and implemented in accordance with different strategies. A brief description of some of these is given in
Appendix L Which strategy is best suited for the purpose depends on, for example, the nature and complexity of the project, the access to finance. life cycle costs of the project, the technical and administrative
capability of the employer and the general political and economic environmenl.
The project strategy defines the way in which the project will be implemented, determines the role of each party involved and, where appropriate. specifics the way the project will operate. To a large degree contractual relationships between the parties and their individual rights.
duties and risks arc therehy also determined by the project strategy. At the implementation stage of a project, len<.kring serves as a method to ensure that the work is procured al competitive terms.
The choice of strategy is a major decision which has far-reaching consequences. Once a strategy has been settled it is of great importance that it be followed throughout the implementation of the project. Lack of strict adherenct!" to the strategy may lead to flaws in the procurement
process, resulting in claims, disputes and extra costs for all concerned. Any part of a project which can be covered by a separate contract may
in principle he made subject to tendering. As soon as the project strategy has been decided, the employer, assisted by his engineer, should establish procurement methods and forms of tendering to be used in the project. The procurement method and forms of tendering are established by delennining.
i)
The parts of the project for which tenders are to be sought. It is importanT t/tat the scope of a particular contract is clearly defined and t/tat intelfaces wirlz other parrs of rhe project are accollnred flU: '.
A COlllract may comprise design, delil'ery of plallt and machillery.
COIISII"Il("lioll
ii)
01"
a ("olllhi'WliO/f of Ihes".
The conditions of COlllract to be adoptcd. Only widely rccogui;:'l'{1 slandard condilions of co",ract which specijically cover Ihe works alld services 10 be rendered hy Ihe COlllraCIOI", slum!d be used.
iii) Thc award critcria. The award crill'ria should cover all elemems 011 which the employer wishes the I('"derers to compete. The factors other than price to be Itsed in the award crileria shollid to the extellt practicable he expressed ill monetary terms. The award criteria may include costs, quuJitylpel!ormullce, time, ingellllity ami em'irolllllental effecls, and it may he necessary 10 apply wei,~htiugs to c(I("h criterio/l 10 reach a hasis which will h(' IIsed whel/ el'ulualillg the fellders.
iv) The tcndcring procedure. This docllment co"'ains what FIDIC regards as systematic al'proa('11 for ohtaining alld el'{lIuatillg ')(Isic procedurc descrihcd i1/ Ihis dOn{f11('1l1 CUll le"dering/or all typcs (~f COIl11"{lctS ill connectioll with and domeslic rOllslrllcliOll projects.
v)
a fair alld ll'ndcrs. The be used for i11lerllariollal
The critcria which shall be lIsed to prequalify tendcrers. 11/ principle. pn:qllalljicaricm should always he carried Oil! 10 ensure I!wf only IlIo.w' who (/1"(' qualified 10 /Imh'rlakc Ille work i,ll'c'st resource.~ illllle preparalion ofa tCl/def:
Once these basic prccondilions have been determined and agrecd between the employcr alld his engineer, the planning of when and how the tendering can be carricd oul mny commence. If, for unforeseen reasons. chnngcs in principle and form have 10 be made at a latcr stage in thc project the implications of such changes have to be considered and assessed carefully. Fillal/cing iflstiwtio1/s may require to approve the project SlrCllegy.
, 1.2
Preparation of Programmes The tendering procedure. as described in this document, implies that certain activities have 10 be carried oul in connection with each part of the project for which a separate tender is to be called. It is important Ihat these activities are carried oul in a systematic and timely manner. They should therefore be planned carefully and
incorporated in the programme for the project. Normally, a preliminary overall programme covering all major activities of the project is prepared in the illilial siage of the project. As a minimum. such programme should comprise the main phases of the project. that is: project definition I~ndering
procedure
- design - construction - taking-over and should eSlablish all milestones of significance each phase.
In
connection wilh
Calling tenders ror a given part of the project should be carried out in compliance with the overall programme. In order to ensure this compliance, derailed programmes should be made for implemelliing the tendering procedure for each part of the project. As a minimum. these programmes should specify duration and deadlines for the following l.\clivities in connection wilh each potential contract. - Prcp
, "
,
.':;\'l'11 as to what e,x!('w the lellder dOClInlelll.<; shollid be prepared alld agreed. before the p,-('qualificalirJl/ doC/mu'nls call he fllla/iud alld isslled. This I/(J.t; 10 he (/t'cickd jor (,tlch ;1II('I/(/(od cunlraCl. :tiilln' J.(.y i"jormatioll /rom ,11(' I('mh-,. docllmems will 0/1('" hu\'{' 10 be ,ncO/porated ill the prequalificorioll doc-limc·III... ;1/ order 10 give adeq/lUll' i"formOlioll to 'hose see/.;;Il.S: prequalificotioll.
FillOI/C;lIg ;lIst;lu1iol/s H'ill gellerally require lime for scrutiny aud (11'/11'0\'01 of tef/der documents.
•
,
2.0
PREQUALIFICATION OF TENDERERS
2.1
Preparation of Prequalification Documents
2.1.1
General Prcquillific.:4Ilion is rccommen
as h
si.\ti~f:tctorily.
The aim of prequalillciltion is 10 establish a list of capilble firms whilst ensuring Ihal a proper level of competition is safeguarded. To achieve these ohjcctives and to give :tdded encouragemenl for COniraclOrs to respond to invitations to Icnder, ~o more Ihan seven organisaElens should be p'requalitied unless_.the rules of the employer or financing instilUtion otherwise dicl~\IC. It is fhe !,o/icy (}f SOniC jil/ll1U"ill.r: ills/illl/iol/s '"ar all ap/dicallls .....ho po.t!ie,u· ,lie' cIIICllificllIion.'i to "{"I/orm ,hl' "ropo.w'd cOlltroct sIIo"ld h~ pUtlUllliju-d,
2.1.2
p,.equalification Documents Prequ;'llific3tion documents should give information about ~hc project, the tendering procedure and the prequalification procedure. TIley should also specify what dala is required from conlractors wishing 10 prequOJlify. The documents ;lrc prcp;.lI"cd by Ihe cmployer/engineer and will normally include the following: Leiter of invitalion to prcqualify Infonnalion about the prequ:llilic:lliOIl procedufC .... V' Project informal ion Prcqualilic:lti
The prequalific{ltio" proceclurc should: Be based on questionnaires. A stam/ard questionnaire ....il/ ht'lp tv maintain conformity of informatio1l .'wlI,c:la. thu:'i making tht' respollses quie'ker ami ch~aper to prm-ide, and at the same lime making t!l"m more readily comparahle. Be rdatil-ely simple ami yel flexiblt' :'in as In permit com:itleJ'ation nf new m:c:oJli.'iotirms. Take CUTOllllt of hoth Ihe t{'clmical alld the fil1onc:ial aspects of I".(~jc'(·'.\' . Allow j(),. the updaring of information prC"iously IU'Ol'it!ed hy co/urGe-tors 10 the Sail/(' ('mp/oyer for a" earli(',. projec,. thus al-oil/illg 1II111t'("('s.\,ary dl/pliclItion of effort. Aut/lOri:t' tilt' cmp/o)'rrlel1gil1l'C!" to .H'eJ.: SU/'pll.'mc"taJ'Y iI/formation from 011/('" .tOfwres.
II/ order to l'/1XW'(' orderly (lut! ('usily "pprui.\·ct! r('.'iluJII.W!."i.the """,/(/"nl pr('quulificutio/1 ftwm r(,ft'rret! to iI/ Appe"dix /I may h(' " ....ed.
The documents should includc inter alia lhe following: Namc and address of the employer.
Name and address of the enginecr. Location of the projcl.:l. Description of the projcl.:t :tnd !'l,;OPC of work included in lhc l.:on(r:.l..::I. Anticipatcd programlllc, indicating the lender period. contnici
Conditions of COlllrm:t 10 be used. Cdtcria fur evaluatioll
ur IClldcrs.
Criteria for prcqu:.tlilication. [Xtails uf allY work. intcmJCli to be undl:rtaken by nominulcd subconl~clor(s).
Anticipated sources of limmcc (including any requiremenl for contractor limllH.:ing). Paymcnt arr.lIIgcmcnls cnvisagcd (including currencies). Any lin;lnd:.tl gU.lranlecs to be givcn by conlmctor.
Whethcr price eSl,;.t1.ltion arrangements will be included. L::lIlgllage and law ur the COIl(f
,
The number of sUbmitted.
copic.~s
of prequalilieation applications to be
The name. :lddrcss ::mu latest date for receipt of submissions, including :my particular instruclions for labelling. The language to he lIsed for the submission. Thc currency 10 be used for presenting linancial information.
2.2
Invitation to Prequalify The employer/engineer should publish a notice invlllOg interested conlraCtors 10 :Ipply for prequ
documents will be issued only 10 LI limited number of companies/joint ventures SCkC1Cd hy the employer/engineer as having the ncces$ury qualifications 10 perform the work satisfactorily. The notice should be published in approprialt newspapers and journals to give sufficient publicity according 10 the particular circumstances of the project. The nOlice may .. Iso be issued to financing instilution reprc.-.enlativcs. if n::lcvanl. nnd 10 government agencies responsible for foreign ITadc so Ihal the inlcrmllional community receives limely nOlilic:.tlinn of the proposed project .md inslruclions on how to i.lpply, The notice should be reasonahly brief and where feasible cOnli.lin: Name of the employer, N<.lInc of the engineer. Localion of the project. t' . ... .
'.
Descriptioll of the projeci ;lnc! scope of work, Source of IinUIH.;e. AnTicipi.lled programme (i.e. awt\rd of contract. completion and any other key d~tlc:s). PhlllllCd l!;llcs (ur issue of tcnder documcl1ls :'lOd suhmis.sion of
lenders. Inslruclions (or applying for prcqualificalion documents. Dale hy whit:h applicalions
10
prequ3lify must be submined.
Minimum L\u,llificalion f"C4uircments and i.lny p::U1iculitr i.lSpeCIS which could be of concern 10 prosrx:ctivc lendercrs. The I)('riot! "elll'('('11 f//(' notice of illl';((I/;O/l ffJ pn'quullfy (/1/(/ fl/l! laf('sf (/af(' for ,II(' r('fl/rn of ('Ofllp/('rcd applicafioll."i should nor he 1(',\'5 tllalt fo"r weeks. For most pl"ojecf,\'. tIll' "m;c(' of illv;tatiOTl should fx· published hetween tel1 to fifteell .....eeks h('!ore tile planned £/ate for tile issue of tender documents (Iml ('ompleled prequalijrcoTioll applicaTion... should he Slthmil1ell to The ~mt'loY(irlell.c:il1ee,.ftmr to ei,t::ht w~t!ks before {lEOf date.
2.3
Issue and Submission of Prequalification Documents On rcceipt of requcsts fmm contr3clors, the employer/engineer :-;hould issue the prcqualilk:ation document... ,
.... The leHer of invitation 10 prcqualify should stale how the application is 10 be pat:k~lgcd am.! sent. The employer/cngineer should acknowledge receipT of the completed prcqualilication applil.::.uions from lhc contri.lCIOrs.
It is "/Is/omary (0 issue IClIder donlnlf.."rs fr('c of clwr,~e. If if is illll!lUJ('d 10 dUI1"!:c. detuils should he Riven in file I'requalificafiolf (/OCIlIlJt'U'....
2.4
Analysis of Prequalification Applications 1"C c:mployer/cilginccr should evaluate the prequalilication applic'l\ions to iocntify those companies/joint ventures whom Ihey consider to be suitably qualilicd <1nu experienced to undertake the project. The evaluations should uClcnninc. for each comp.my or joint venlure: Structure and organisation. Experience in bolh the type of work and the country or region in
which it is to be unucl1akcn. Available resources, in tenus or management capability. technical staff. (;onsu'ucliuJl <.IUO fabrication facilities, maintenance and training filcilities, or other relevant factors. Qualily assurance procedures ami environmental pulicy. c.lI.tr.:nt tu whidl .my work woulcJ be likely to be subcontracted. Fill~Ull.:i'll stahility
'IncJ rCSOlln:cs nccessary 10 exccute lhe project.
Gcncwl sllit.lbility, taking into .u:count ,.Illy putl;llIi.a1 h.lllguagc diOiculties. Litigation or .lrbitr..ttion history. El'ullfUfitIJl allh£' suitahility o!IWI('l/Iiql ('Ol/lra("/ol',\' -"hould I)(, made on II/(, ha...i... of Ilu' 1'I'C'lff/alijir'l// ;f/1/ (f1't'I;"~lfi(JJl. Tlli... may h(' ..."pplenlcl/lel! 11)' prel'iolf,\' ··c'.\per;C'II("(' of fill' l'lJfploy<""/Cl/giIlC'('I' alld IJ)' nmjidC'1/fiul c~lIqiliries made ro pl"(,\'ious l'mployc'l's. (rode (/.'.sm:iulion.~ and direl:loril's OJ' !IoriO/wi compallY /"l'.l.Ii.\"f('I"s, Where appropriate and fl'usilJle.'ai,\'f·U.\'sio"... ma), he Iidd ..... itll app!icuJlfs.
2.5
Selection of Tenderers If ~hc resulting lis!. afler those linns wll(l were found unsuitable have heen excluded. excccd~ six pUICllli,,1 tcndercrs and there arc no special regul;ttions OJ' conditions imposed 011 Ihc cmploycl', thc sclection proceuure SllOUld be conlinueu 10 eliminate the less well-qualified in order to alTive at ~ mlln~ Ihan si.ll..
'. 2.6
Notification of Applicants When the li!'>t of sclcctcu tcm.lcrers has hecn prcp'lfCu, ~u(.'(,..cssful :Ipplicants should he nOli lieu 'Illd requestcd 10 conlirm Iheir iotention to submil a tender. This should Cllsure, as far as possible, :.111 adequate number of competitive tenders. If a polemial tenderer wishes to drop out al (his stage, the next best-placed should be invited and asked 10 confirm as above. Following this, all applicants should be notified of Ihe list of selected tendcrers without giving explanation for the decisions.
Ir shoul,1 be l10redthat .. ;onu· fi"Ul1c;nt-: or other institutiotls require rhot all contractor... po.. ;sessing the sfipula{(~d experience and resources should he- prequalified ......ithout OilY restrictiOIl on the lotal numher.
The employer/engineer sllould olb'is£' .\'ucce.ufu! applicants when fhey ('an expect ro rece;l'e lelltler document.... alld should notify unsuccessful applicants Illar they have lIof heen prequalified.
3.0
OBTAINING TENDERS
3.1
Preparation of Tender Documents
3.1.1
General
The lender dOl.:UlllCIlIS prepared by the employer/engineer will nonmilly include the following:
Letter of invitation 10 lender.
Instructions 1O lcnderers. Tender form ;lOd appendices. Conditions of l:onlracl (ParIs 1 anu II) lOgether with any requisite forms. Spcdlkalioll. Drawings. Bill of quantities or schedule of prices. Information dul".
List of additional infonnalion required from tendcrcrs. The Sl.:UpC of the contract and:'1Il Olltline of the lender documents should be prepared bcfurc the prcqualilication documents in on..lcr to achieve
consistency between these two sets of documents. Some uf the above items, such as "Lcucr uf invitation to lender" and "Instructions 10 Icndcrcrs" will normally not form part of the contract agreement (sec clmptcr 6.2) :md l.:unsequcntly requirements ,lOd conditions applying tu mailers arising after :'lward of contracl must be incorporated el!;ewhere in the tender documents. Essential features of the tender documents are described below.
3.1.2
Letter of Invitation ,to Tender The !cUer or illVit:.lliOll to lender should be on employer's hC:.ldcd paper and should include: Tender reference and litle. Li:-.t of documents issued.
Receipt form for the tender documents (10 be signed and returned by the tcndcrers) Instruction 10 infonn the employer/engineer, in writing. of Clny significant l.:hunges to the data supplied in the prequalific
or lendcr submission and Icnder opening.
The (e1f('r of im-llarion should IJe kepT as shon as pos,rihle. Detai!rd illformaTion shuuld he cUllfained in The illstru(·tions to tenderers.
3.1.3
Instructions to Tenderers
General Instructions (0 I,cndcrcrs should be prepared by IhecmpJoycr/engincer 10 meet the pal1icuktr requirements of individual contracts. The purpose of the document is (0 convey information and instructions that will govern the prepi.lralion, submission and evaluation of tcnders.
When determining the tender period. the employer/engineer must ensure Ill'll ,adequ;'ITc lime is available for tenderer!> to prepare their
tenders taking into nccount the size. complexity :l.nd location of the project in question. Tcmlcrcrs should he notified of the number of copies of their Icnder that arc required. slipulming that one set of the dOcumeoti<; should be clearly
marked "Original Tender" .md the others (which should be pho\ocopies) marked "Copy" and that, in the event of discrepancy. Ihe "Origin;:11 Tendcr" shall t<.lke precedence. lf a power of ollorncy is required. details of the precise requirements be given.
~hollid
The tcndcrers' nuention should be dmwn 10 any requirement for documents to be notarised nod legalised at the embassy or consulnle of the employer's country. Tenderers should he informed whelher the successful tenderer will he required to esl;:lbJish a locally registered company for the purpose of the cOlltr;:ICI.
The inslructions 10 lemlcrers should stollC that the employer does not hind himself 10 ;:lw<.lrd a conlract to any of the lenclercTS. If remunenuion is 10 be made (0 tencJerers who submit responsive lendc:rs. the sum should he advised. If 110(, it !'ihould he stipulated (hnt ,Ill costs ;:lOd cxpen!'iCs ;:1!'isoci~lIcd with thc preparation <:Ind submission of tenders shall be: borne by the tcnderers.
Consideralion ,\·hould he .r~il'(:n 10 offering some remuneration 10 tcmh'rers !l Ihey. ill order 10 prrl1'ide a responsive fender. hal"e 10 Itllelena!.:e sfUlfirs or carry oul design work of a conceprual nature. This will normally he Ilu: ("ase ill ·'De.·dgn, Build, Operate alld Tran.ifcr" prnjeCI!. or "Design. Build and Operole" projrcl.... sec Appendix I.
Documents The inslnlctions 10 lendcrers should conwin a list of the documents required 10 form a complctc lender. Tendercni should be infolmcd lhal a tender will be rejected unless it is substanlially re.'iponsivc.
H should be made clear to tendel"crs that any corrections must be initialled. Data presented by tenderers in the form of computer printouts. where Llppropriale. should noml~llly be accepted.
Alternative Tenders TcndeJ'cr~
should be informcd of whelher allernalive tenders will be considered or no1. A complialll tender is nOffilully a precondition for considering altcrlli.ltivc tendcrs. AllenWf;,'e fellder.\" must include a cOlllprellensi\'c and precise descriplion of f{,e parIs of Ille lender documellfs wllich have been alfercel. The (llf('I"I1OI;\'(..' Icnder sllould include full llelaUs of c:o"frucftwl nUlllilions. xpecificulirm, drawing,,,, calculafions. elwironnU!llfal impacls and ('mits Ior file parIs of Ihe works f!lal !la\'c been ullere~1 in order fo aI/oil' afair f"cllnical ululf1llulI(';al evol"Ulioll of file alfrrIlUft"l'c proposal.
Modification to Tenders Th;: lcndel"Cr should hc illl'onncd lhal. if he has delivered. po!'tcd or tlispi.ltched his tCllUCI" prior to the fonn~ll submission daLe he has the righl to modify or tlwke (.;OITCCl.ioIlS lU il, provided thal any such modi(i(';~ltions or corrections are rece.ived by the employer/engineer in writing prior to the time speciried for submission of tenders. The original tcnuer thus modified or corrected would then be considered as the oflici~ll lender.
Financing Arrangements Tendercrs should be l.IUvi:--cd of
th~
source of fimmce and
rcl~lIcd
contliti<.UlS. Where LenderCl"S ~ll'C requircd lO provide linancing Ihey should be inslru.:lcd to provide information l.IS to soun.;c of liuance and Ihe (.;olldiliuns whkh will l.tpply.
Currencies and Payments Specific in~lruclions should be given conccming Lhe currencies LO be used in the prcparmion urthe Il:-Ilder. Tenuerers ~hould also be advised in which cUITcncylcurrcncics pl..lyments will be effecled. Wh<'l'e Jel1derers arC' reljuired fo l'xpre.'is I!leir 1('lIders ;11 a single ("1I/"1"el1("y (usuully fll{" ("urrency of f!le (;(Juntry ill wlth:!I lite works art' 10 he ("(Irried OIlT), if is III!('c:>sary 10 dlpue fhe rales of exchangt.· w!ric!r hal't! IJee" /lsed In ("ol1\'l'rT T/'e I'arions CltrrellCie,'I in w!rich paymenT is rl'ljuired il1fo a sil1gll' ('U,.rel1cy uuif" As Inore fll£ln ("Jlle Tenderer nwy r"qllesl parI paymellT in (Ule pOl'f;ntlar t."lIl'r£'lI(,y. il ix pJ'l~ft!rul>l(' thaT file exchange raf"s 10 b(' used should hl' ('ollsisfl'UI and. thereforl', that fhl')" should he dl'fiU('c/ by thl' l'ml'l{}Yl!r/~nginl'cramI 1l00ified /(I ('at'h t{"lIdern· a rcasonahle time hefore The dale of submissioll. Normally, thl'"tc rates ...hould bl' lilt> si!lIinR prit-es quolell hy Ihi! local l:l"nTral balll.: alit! tile r£llrs ...!lo"hl he' 1110.'",' quolcd al Ihe lime of ('Iosill): 28 days hl1fIl"C Ill" Tcnder ..."h"';.'Isioll (lel/ll. Tlu! rOIC," qllotl'll are ill('orporuTl'c/ ill Ihe '·OI11ra("f ,,·JIl'U ult'arc.!l·d.
Domestic Preferences
Tendercrs should he advised if and how domestic preferences will be applied in the evaluation of tenders.
Tender Securities The requirements for a tender security, if :lOY. will be detennined by the circumstances of each project. Jf a tender security is required, a form should be included in the tender documents. A standard form of tender security is shown in Appendix III. The amOllnt and cUlTency(ies) of the security should be stated. In all cases the surety or sureties must be sarisf'lctory to the employer. If a tender security has been requested, any tender which ha~ not been so secured will he rejected. Tenderers should be advised of the period of validity which is required for the tender security. ;\Od the events which will entitle the employer to call the security. The terms reflected in the standard Fonn of Tender Security shown in Appendix III are as follows:: a.
,
th;u it shall remain in full force and effecl until the earliest of i. {datet being r J days from rsubmission dateJ. the date stipulated by the Authority for the suomission of tenders. or any prolong.uion of such date above notified to the Authority by the Tenderer and the SurelY in wriling;
iL in the event of acceptanClt of the Tender by lhe AUlhority. the date upon which the Tenderer provides a performance security to the Authority in aceord~tnce with the terms of the contr.tct thereby made between them. or iii. in the event of acceptance by the AUlhority of a tender for Ihe Works from a third party. the date upon which such third party provides the relevanl performance security. b.
subjec\ to this Bond being in full force ;md effect, fhe Surety shall pay the rull amount specified in this Bond upon receipt of 3 wrinen certilic.i1te from the Authority Slating fhat i. lhe Tenderer has wilhdrawn his Tender during the validity of this Bond. or
ii. the Tenderer has failed 10 provide a perform;mce security to lhe Authority in accordance with lhe terms of the conlracl between them upon accep{;lnce of the Tender. It is recommended fhat the period of validity of the security (Bond) shall equal the period of validily of fhe tender plus the time allowed for the tenderer 10 provide his performance security under the terms of the eventual COnlract between the cOnlractor and the employer. Teoderers should be advised that their lender securities will be returned to them as soon as the security is no longer in full force and effect as covered in sub-pamgr;lph (;l) aoovc.
The eml,foyerlelJgiuecr should select ,he fyl'{' (JIul amount of security }I/OS/ appropriate to till' rOl1tl'(f("t to In: awarded. It is I'nj"erahle t/tat t!Je (I/I/alt/It of s('t·ttr;!y s1l01l/d 1)(' s/oln/ a.\· a -'"Iu·()fi(" .\fUJI I"ather tlu/II 0.\ 0 /h'n'CII!age of tllf' 1('lIde'/" prin'.
Evaluation Criteria The evalualion criteria. which will form the basis for the selection of the lll()~t advantageous ICIH.lcr. should be speeilicd. If a spcdlk mcthod of evaluation is 10 be used in selecling the successful lender. the method should be described in the in:-;lructions to
Icnucrcrs. While adjudic~lIi()n gencrally will be primarily on the basis of tt:nder price. other fa...:lors which lIlay he relevant include: lillIe for COlllplclilm sllit~\hiliIY of
technology
life cycle costs of construction ;'Illd plant
cllvirOlllllel1lal imp'll'l during tile lilClilllc of tile project avoid:mce of haz..trdoliS materials 4uali1y tlnd serviceability orplallt pwjCCI linallcing operation and maintelli.lnce costs TI,e.H' Jilc·tor.\" shuJl h(', !o rhe eXfent proui('(.IbJe, ('.\pressed ill f1IO//('f
Performance Securities If ~\ security (gllar;\I11ec or hond) for pcrf"orilwllCC is rCtluired. the Iype mllJ h.:nns should be spccilkd in the conditions or contract. The terms should indlilic the periotl of validity of the sCl:urity, the procedure 10 he followcd if lhe security is forfeit. arrangements for its release iJlHJ. the currency of .:lny 1110netary tmnsaclit}11S illVolvcll.
Checklist The following checklist is illclullcu to assist in the prcptlration of instructions to tenderers and shows subjects which should be covered: The bngllagc
or the tCllder.
The number of co pie::;: of the tender that arc required. Which dm:umenls have to be filled ill hy the lenderer und returned hy the submission d ..lte anL! which Il<\VC to be signed. The rcquirelllcnt for c;lch lcndcrci' to provide a power the signaturc(s) 10 the lender.
or allOrney f()r
Any special rules regarding. trcmml.:nl of taxes, fiscal mattcrs in thc lcmler.
dllli~s
and other
Validity jX'riod of the lcnder. Any documcnls othcr than those issued as parI of the tender documents which the lendcrer must include with his lender (e.g. technic:.!l (te~criptioll or drawings, proposed mclhods of constnu.;tion, proplls~d environmental protection measurements, propos~d prngr:lInme, schedule of key st~lff. quality control).
Procedure for issuing addenda to the lender documents. Procedure for de~lling with queries raised by tenderers. Instrm;lions for packing. I
Procedure for inspecting any sped;,l documenls not issued with the lender (\oCtlmelUS (e.g. site invesligation repons). Circumslances under which altemative offers may be submilled. Conlidellti.llity of tendcr documents. Pmcedure for (he return of tender dOClllncnts hy unsuccessful lenderers (if requircd).
Procedure for dealing with requests for extension of
lim~
by
Icnderers. Armngclllcllts for thc opening of tenders. PrOl;edurc for deating with :lTithmctic errors found in lenders dllTing evaluatioll. Rules rclaling to disqualification/rejeclion of tenders (e.g. !<.lte arrivals ...!tercd ligures, incomplelc submission.,; and devialions).. Any unusual ("cillures of the particular lendering process. Infonnation about the cvalualion criteria
3.1.4
Conditions of Contract The conditions of contT~ll;t should be based on widely rccognised conditions of contract such as "Conditions of Contraci for Works of Civil Engineering Construction" and "Conditions of ContraCI for Electric'll and Mech.mical Works" puhlished by FIDIC. T"£'.~('
doci/mell/s ("olllp,.i.\·£':
Part I: General Conditions (alld Preamh!e, ilapplicllble). Par, II.. Conditiolls oI Particular Ilpplication or Special C ondiri(Jns. TC·lId",' /orlll. Ilgrc'('I//"1I/ Jill"lll
Any spccL.t1 rules regarding treatment llscal matters in (he tcnder. Validity period of the tender.
or
taxes, duties and other
,
Any doeumenls other than those issued as part of the tender documents which the tenderer must include with his tender (e.g. technical description or drawings, proposed methods of construction, proposed environmental protection measurements. proposed programme, schedule of key staff, quality control). Procedure for issuing addenda to the tender documents. Procedure for dealing with queries raised by tenderers. Instructions for packing. labelling and addressing the tender (including a supply of standard labels jf this is the practice of the employer). Procedure to he adopted for lcndcrcrs to inspect the site of the works. ,
Proccdurc for inspecting any special documents not issued with lhe tcnder documcnts (e.g. site invcstigation rcports). Circumstances under which alternative offers may be submitted. Confidentiality of Icnder documents. Proccdure for the return of tender documents by unsuccessful tenderers (if required). Procedure for dealing with requests for extension of time by tenderers. Arrang~mcnts for
the opening of lenders.
Procedure for dealing with arithmetic errors found in tenders during evaluation. Rules relilting 10 disqualification/rejection of tenders (e.g. laiC arrivals. altered figures. incomplete submissions .md deviations) .. Any unusual features of the panicular tendering process. Information about the evalualion criteria
3.1.4
Conditions of Contract The condilions of contract should be based on widely recognised conditions of contract such as "Conditions of Contract for Works of Civil Engineering Construction" and "Conditions of Contract for Electrical and Mechanical Works" published by FIDIC. These documents comprise: ParI I: General Condilions (and Preamhle. ifapplicahle). Par/II: Condilions of Particular Application or Special Conditions. Tel/del" form. Agl"CClIll'lIl form
If olle of the above mentioned conditions is specified. guidance in its use is !:iven in one of the followiJlg two publications "Guide to the use of FIDIC Condilions of Contract for Works of Civil Engineering COllstruction" Gnd "Guide to the use of FIDIC ConditioJlS of COlllrac( for Electrical and Mechanical Works" It should be lIored "1U1 fhe conditions have been prepared 10 provide a jair shari"g of respollsibility and risk between employer and contractor and contain many interdependent clauses. They should therefore he adopted with aslew ol/eraliolls as possible.
3.1.5
Specification The specification will define the scope and technical requirements of the contract, including any requirements for training and the transfer of technology. The quality of materials and the standards of workmanship [0 be provided by the contractor must be clearly described. together with requirements for quality assurance to be performed by the contractor and the required safety, health and environmental measures to be observed during the execution of the works. The extent, if any. to which the contractor will be responsible for the design of the permanent works should also be specified. Details should be included of samples to be provided and tests to be carried out by the contractor during the course of the contract. Any limitations on the contractor's freedom of choice in the order. timing or methods of executing the work or sections of the works should be clearly set ou( and any restrictions in his use of the site of the works, such as interface requirements with other parts of the work. or provision of access or space for other contractors, should be given. The specification shall promote the broadest possible competition and as far as possible follow international standards such as those issued by ISO.
3.1.6
Drawings The drawings included in the tender documents should provide tenderers with suflicient detail to enable them, in conjunction with the specification and the bill of quantities. to make an accurate assessment of the nature and scope of the works included in the contract. The drawings should be listed in the specification.
3.1.7
Bill of Quantities/Schedule of Prices The bill of quantities/schedule of prices should provide identifying descriptions and estimated quantities of work comprised in the execution of the works. If the tenders arc based on lump sums, a break-down of such sums into constituent parts should be provided by the tenderer.
3.2
Issue of Tender Documents Tender documents should be issued by the employer/engineer to those fimlS who have been selected to lender. If a charge for donmu!ll1s ;s to be raised, issue should only be made agai"sl payment. As 011 allernative to posti",':, or despatching by olher means, tenderers should always he given 'he option of c:oflc<.;ti"J.: lender doc:unu!Ill.f from
the employer/el/gineer Oil rhe due despatch dale. Tenderers should IJ(! asked whelher they wish (0 col/eu lhe documents and instructed us to the rime (lnd place jor (.'ollecriol1.
3.3
Visit to Site by Tenderers Visits 10 the site of the works should be arr.l.Oged with the employer/engineer as laid down in the instructions 10 (enderers.
The primary purpose of the visit is to enable each tenderer to inspect the site and obtain all relevant information required for the prepamtion of his tender. Tel1llcr,',.s .\-hould be ucll'ised of fhe pmooble duratioll of the visit, the period durillg which the visit may be made alld the maximum number of pcrsrJ/lS from each tendera allowed to participate. The ar1"QIl.t:cm,'IItS for the site visit .~holiid be determined so that equal opportunities are ope" to all fenderers_ The visit shollid take pla,-e at approximately 'he end of the first half of the ,ender period and should i"c1ude a fe"derers' conferel/ce. Tel1llerers should make flteir OWIl t1"Ql'{!llin1: al'l'lIlIgemellts alld hear tlte costs, il/duding fares. ll('('ommotlmiOil and sllbs;slCllce al1(l tlley .\·lto//ld h,' advis{'d of this ill tile illsfrtl(',iOll.f to tcnderer.... It is tile respol/sibility of tlte employer/engincer to make Dilly tllose arrangements f/{!ce.uary for the actllal inspection of the site_ Tile employerh'l1gille('r should make a record of tenderers' represematit·"s \li.\-itil1':: the site_
,
The employer/{'lIginee,- may ,-equi/"(' te"del"l!rs v'Sl1l11g tile site 10 '-',demnijy the employer/engineer against ony claims for damoge, injury or death as a res"lt of tile visit.
3.4
Tenderers' Queries Tenderers' queries can be handled by correspondence or by tcnderers' conference or by a combination of these methods. The intended method or methods should be described in the instructions to Icndercrs. Correspondence Method
Any tenderer requiring clarification of the tender documents should submit his queries 10 the employer/engineer in writing. The employer/engineer should prepare and despalch wrillen replies to queries. These replies, together with the tex( of the queries should be issued to all tcnderers without quoting the source of the queries, and the tenderers should be required to acknowledge receipt of the information. Tenderers should be instructed that queries will not be accepted by the employer/engineer unless received 2R days before the date for submission of tcnders. Replies to queries should. where appropriale, be issued as addenda 10 thc Icndcr documents.
Tenderers' Conference Method. With the conference melhod, queries from Ihe tenderers 10 the employer/engineer are deal! with al a tenderers' conference arranged by lhe employer/engineer 1o take place al the lime of thc sile visit. Temlerers' queries should be in writing and should identify the party raising the query. As far us possible oral answers should employer/engineer during the conference.
be
given
by
the
Within a reasonable time after the confcrence, the employer/engineer should send alliendercrs, whcther present at the conference or nOl, a full sel of minutcs recording both the queries and formal replies. Where appropriale, an addendum to lhe lender document should be issued. Receipt of lhe minutcs should be acknowledged by lhe lenderers. Representation fmm each tenderer should be limited to two or three per.'WlI.f at 'lie conference.
3.5
Addenda to Tender Documents Each addendum should, when issued, carry a serial number for reference purposes and conlain a receipt slip which should be signed by the tcndcrers and relurned immediately to the employer/engineer.
Addenda should be complete in themselves and should not rely on Icntlercr~ having to appreciate the implications and decide whether other changes to the documents are required as a consequence. Addenda become part of the tender documents. It is possible that explwwtions, re\'isions. addiJiolls or delerions to the tellder documellls may be necessary during the tender period and these shol/ld be I/Olified ill accordance with the procedure shown above, The employer/ellgineer should avoid. if possible. rhe issue of addenda during the latter part of the tender period. If unavoidable, the employer/engineer should consider extend;'l!? the tender period to allow tenderers a reasOfwhle time for their incorporation. It should also he remembered that changes of a mil/or nature can usually he dealt with ill discussions with the selecred tenderer prior to award. The lender period should 1101 he eXlcnded ullless the circumstances are exceplimwl. III considering the need for extellsions which might arise. eilher as the result of major amendmCIllS 10 Ihe render doeumems or as a dire(:t request from olle or more lenderers, the following criteria should be applied: Is Ihere a cOl/villeil/g rca.wnfor granting
(III
extension?
Would rh,' rcfusal of WI e.r/Cl/siml rcduce Ihe numher of tenders 10 he suhmiued? Would an exlclIsion give preferelllial Ireatment to Ihose tenderers who Url' /llIaMe 10 meet Ihe original lCllder .mhmissioll date? Would all exlel/sion creale I/IJaecepwhle delay to Jhe project programme?
, 3.6
Submission and Receipt of Tenders It is the responsibility of tcnderers to ensure that their tenders are delivered to the employer/engineer by the due submission date and time, properly signed by authorised signatories. Tendercrs should be instructed to return lheir tenders double-wrapped in plain envelopes or packages using pre-addressed labels provided by the employer/engineer. The labels should identify the particular tender and should carry .1 code to enable the employer/enginccr to identify the tenderer (for example. for use in the event of late tenders having to be returned unopened). Labels should preferably be distinctive and carry {he words "Tender Document - To remain sealed until official opening". The employer/engineer should mark all tenders with the time and date of receipt and ensure that they arc kept secure and unopened until the date and time appointed for the official opening.
If tenders are delivered by hand. tenderers should obtain a receipt from the employer/engineer recording the date and time of delivery. Tenders received after the appointed time should be immediately returned. unopened. to rendercrs. accompanied by an explanatory letter giving thc date and time of receipt.
,
4.0
OPENING OF TENDERS
4.1
Opening of Tenders At the dale and time fixed for the official opening. the employerl engineer should check and display the scaled condition of each tender prior to its being opened.
As each tender envelope announce:
IS
opened. the employer/engineer should
Tenderer's name
Tender price. Price of allcmativc lcnders. if appropriate.
Tender security Following this, the employer/engineer should announce the names of any tenderers disqualilied duc (0 late or non-receipt of Icnders. The foregoing information should be recorded on a suitable fonn signed
by the opening oflicer and appropriate witnesses.
The official opel/illg oJ fendl'rs may he carried ulII ill Of/e of two ways 00\" upplvpriate to the c:;rc:umSf(.J1Ic:es. /" Public: Tile date, lime and place of openill/-: should be adverrised ill rhe press alld IIOfified ro renderers. Resrricted: III rhe presellce afrhose renderers wishi"g ro affelld. all hw'ing IJeell advised of rhe date. rime and place of rhe opening.
\.
III addirioll to the ahove. allY persolls specijically illvired hy rhe employer may also aHend, as may rcpreseflfarives of allY !:ol'ernmellf or orher authority who are required ,\·0 10 do. V"h's,'; required orl/('rwise by finolll:illg or other illsrituriol/s, tellder openillgs sho/lld be "Restricted" and the opening should be held 01/ 'he same day as tenders hm'c to he submiued.
5.0
EVALUATION OF TENDERS
5.1
Review of Tenders Following the opening, lenders should be checked by the employer/engineer to establish that they are arithmetically correct, are responsive without errors and omissions and consistent with the invitation to tender.
Where arithmetical errors are found. these should be corrected in accordance with the provisions in the instructions to tenderers. Tenders that are considered to be substantially unresponsive should be rejected and relUmed to the tenderers.
5.2
Tenders containing Deviations Where a lcnder cont3ins deviations, the monetary value of the deviations should be determined by the employer/engineer and added to or subtracted from the tcnder price to arrive at the anticipated real cost of the tender for comparison with other tenders received. The calculations should be carried out using information contained in the tender or, if appropriate information is not given. by applying commercial rates and pnces. If the nature of the deviations is such that it is not possible to determine their monctary value. it is recommended Ihm the tender should be judged to be substantially unresponsive and returned to the tenderer. The employer/engineer should make a detailed assessment of all responsive tenders. The assessment should be based on the evaluation criteria as specified in the tender documents. On complelion of the above procedures the tenders should be placed in order of evaluated cost. At this stage. the employer/engineer may wish to seek clarification of information contained in the lowest evaluated tender and possibly the second and even the third lowest. The employer/engineer should nOl raise queries in such a manner as to elicit supplementary information beyond the minimum required for clarification and should state that any such funher information given will be disregarded. At the same time, a summary of any arithmetical corrections made by the employer/engineer should be submitted to tenderers for agreement.
5.3
Adjudication of Tenders If the lowest evaluated tcnder as clarified still contains deviations which are unacceptable to the employer/engineer. the tenderer should be notified and given the opportunity of withdrawing such deviations in writing. The tenderer In:..ly do so only if he conlirms in writing that the withdrawal makes no change to the tender price. If no such confirmation is received the tcnder should be rejected and the next lowest evaluated tcnder as clarified should be considered. and so on. The employer should then make his decision on which tcnder to accept.
Unless there arc exceptional circumstances. the award should be made to the tenderer submitling lhe lowest evaluated responsive tender.
The procedure for dealing with deviations will depend OIl the employer's policy towards tellders which do lIot comply fully with the instructions to telldl'rers. The procedure descrihed ahove is the olle recommended by FIDIC as most likely /0 ensurefairlless to hOlh employers and tenderers alld ill the lon,~ term to ensure that employers receive compliam competitive tenders. Certai" employers. particularly those who recei\'e a number of tenders ('ad, year. may "refer 10 adopt a stricter approach and 10 reject all)' teJlllers u:hich cOlltaill deviatiolls, If this is the case. a statemem to this effel·t should he im:luded i" the instructions to tenderers and this prot_'i'dure should the" he strictly ohsern!d.
\
Where financillg institution.. are involved. their procedures may prescribe strict rule'S for ilealing witll deviations Gnd ill particular are likely to prohi!Jit lIIty CllUII,':i' i" ((·"der price. The instructions /0 tenderer,.. slumM ho\'e ,'itati'£1 the policy re.l:arding alterllative temler,f. If altenwth'e tenders are /0 be considered. tile employer/engineer should examine a"y alternative submitted to see 1/ it is acceptable. If it is, then it.<; cost shol/ld be evaluated and ranked ill the order of evaluated costs. The finally accepted tender for an alternative desi/?Il may 1I0t he that from the tenderer su!Jmiuing the lowest cOllformillg tender alld the employer should be permitted to accept the alternative design if it is in his interests to do so. However, altenwtil'es should only he considered if a complioll/ tender Itas also been submit/ed, otlterwise tltere is a risk tltat all tenderers might submit tenders for alternative designs only. none of wltich might be acceptable to tlte employel: During tender e\'oluatitm. allY apparent "igh or low pricil1K should be idell/ified alld drawn to tlte at/entio" uf the em,Jloyel: The appropriate key faclOrs and method uf evaluation should have been established in tlte illstructiOlls /0 te"derers so that the sllhseqllell/ evaluatioll allll comparison of tenders leads to all objective judgement.
The evaluation of tenders can generolly be considered to hove three components. The components may include: Technical evaluation conformity with .tpecification.t and drawinKs comparison ofany proposed alternatives (if allowable) with the requiremenf.'O of the tender documents desiKn aspects for which the contractor is responsible methods of construction and temporary works environmental considerations qualitya.t!illrance pJ"{Igramme Filllll/dol evaluatiol/ clIpital cost discouwed cash flow and nett present value pfogramme of paymel11s fil/clJIc:ing arrangements currencies securities i"terl'st rotes lIOWI'pa)'In('lltslret"I'tions day",ork rOtes contract price adjustment proposals Gellc'ral controC"lllol and allministrath'e e\'aluatiOll cOllformity "'ith illstructions to telulerer-<; '\ cOIl1pletelll'SS of lellder... ,'alillit)' of tellliers ('xcl".,·iol1s lind del,illtions - Slated or implied IIISUrOIlCl.' experience of prnpnsl"d kl"y st{{ff sllil'l,illg. ('USlOIlI.", IrafHIUJrf workillg IUJlII'.'; lahour huild-up. run-down and source
5.4
Rejection of all Tenders In the unlikely event of rejection of ~II tenders. the tenderers should be ~dvised of the reason. If new tenders are to be invited, the employer/engineer should carefully review the causes leading to the rejection and should consider modifying the tender documents or adding to the list of selected tenderers before inviting new tenders. it is also recommended that any new tender documents should be updated to incorporate any modifications previously issued as addenda to (ender documents and/or replies to tendercrs' queries.
Tenders should not be rejected and completely new tenders invited against the original tender documents for the express purpose of trying to obtain lower prices.
The release of tender securities should not be withheld, even if it is the intention of the employer/engineer to invite some or all of the lenderers to re-tender against ncw tcnder documcnts.
If the employer is cOflsiderillK the rejeclion of 01/ lenders because rhe /owesr wIder exceed.I' /11" co.\" estima/es or Ille employer's budget by a ,~igll1jic:(l11I anWUI1I, ,h(' employer/e/lgilleer may II('WJtiate with Ihe f1UW favourably plac;ecl lelldem: III COl/ell/Ctill,1i ,\'1Iel1 lIegotiafiOlIS, rIle guieling prillciple mUM be /() ('11,\'11/'(' thai the colI}identiality alld faimess of lellderillK is preserved. III Ihe event of a satisfaclory cOlI/raer /lot being negoliated, all tenelers may be rejecled. Rejec/ion of all WIden
i~'
al,w justified whell:
Tel1e1as (Ire lIot slIb.l·tmlfially I'e.~lw/lsi\le to Ille lellder documents. Too few lenders receil'ed to ellsure competition.
,
6.0
AWARD OF CONTRACT
6.1
Issue of Letter of Acceptance The employer will nonmdly seck 10 award the conlr:lct to the tenderer submilting the lowest evaluated responsive tender. The award must be made during the period of lender validity or any extension thereto
accepted by the lcndercrs.
Where the lowest evaluated tender contains deviations from the requirements of the tender documents which are not deemed to render
the lender as non-responsive and which have not been dealt with under clause 5.3. it is normally necessary for the employer/engineer and tenderer 10 meet. prior to ,my decision being made concerning the award of the comraet. in order to determine and agree whether such deviations are acceptabl.c and shall be incorporated in the contract, or whether they shall be withdrawn by the tenderer.
Following such discussions, and assuming that agreement has been reached on all points, the employer/engineer should prepare a memorandum of understanding giving details of the agreements made. This memorandum should be submitted to the tenderer for his agreement and signature. Once this agreement has been obtained the employer/engineer should issue a letter of acceptance, attaching the sig.ned memorandum. to the tenderer. Where it hns not been possible to rc~lt;h ~Igrcemcnt with the tenderer suhmilling the lowest evalu:lted tender, the above procedure should be repeated with the tenderer submitting the next lowest evaluated tender. The leiter of acceplance should identify the contrnct and the works to be executed by the contractor as well as the contract price which the employer will pay to the contractor in accord~nce with the terms of the COnlr~\ct. Where the contrilct includes FIOIC Conditions of Contract for Works of Civil Engineering Construction, Fourth Edition. the general terms of the insurance policies must be agreed with the selected tenderer before the leiter of acceptance is issued. The notification by the letter of acceptance will constitute the formal ion of the contract. The memormulum of underslanding should be a faclUal slalemenl recording 01/ decisions and agreements reached durin.t: Ihe pre-award discussions. II .fllOttld normally nOl be necessary 10 record Ihe delail of Ihe disclissions. The memorandum will become one of Ihe documents formin;.: part of the contract agreement and will take precedence over all OIher contract documellts. II is titus essential that it is signed by both parties. Where it is nOl immediately possihle to is.we a formal letter of acc:eptance to Ihe successful lenderer, the issue of a leuer of intent to enler illto a contract may in some cirnmlsta1lces sen'e a useful purpose. Care should he t!xen:ist!d in formulating a letter of inlt!nt so that il is 1IOf conslrued as heing the letter of acceptance.
If a leller of intent is issued. it should normally contain: A c:lear statement that it i.~ intended to accept the tender together
with any L"()nditions precedent. If the employer is preparedfor ,he colltractor to commence any part of the works (e.J.:. lIIo"ilisation. orderin,:: of materials, lelli/IJ: of subcontracts. etc.) then delails of silch work. The basis ofpaymelltfor work authorised and a limit (if any) to the financial liability which may be incurred before formal acceptance vf the teltder.
A statemem that if tile contract is subsequemly not awarded to the tenderer, tile properly audited costs incurred by him in peiforming work authorized by Ille leller of intent will he paid by the employer. A request IV II,e tenderer IV acknowledge rel:eipt of the leller of illtent and to confirm "is acceptance of its cOl/ditiolls.
6.2
Performance Security It is normally a reljuircment of the contract that the contractor shall
furnish a performance security within the time, and in the amount. currency and form. prescribed in the contract documents. The perform. ance security should be furnished before the expiry of the validity period of the tenders. Tenderers should be advised, in the tender documents. of the consequences of failing to produce a perfonnance security according to the stated requirements. Such consequences would nomlally be that the contract is declared null and void and the contraclQr forfeits his tender security. The employer is then free to award the contmct to the next lowest tenderer. The successful tenderer's tender security must be returned to him promptly once he has f~lrnished his performance security. Wllcre employer.f lire relying on project fUlldill!!, from external financial i/lstitutions, they should umJirm the form of pellormance security to he used with that ills,itwion. If ,he timing is such that it will be impossible for the contractor, in l:omplial/ce with the terms of the coUlract, to provide the pe,formance securi,y before the \'olidity period of Ille ,enders has expired, tile employer/engineer should protect himself by aski"R the other tenderers to extend the validity pericxl of their tenders accordingly. Refusal by any tenderer 10 extend the validity period of his tender for this reasoll would not emi,le the employer to call hi.~ telllier security.
