Selective tender

From CEOpedia | Management online
Selective tender
See also

Selective tender is one in which quotations are sought solely from a pre-specified group of contractors. This group is usually pre-selected because they have been judged to satisfy certain specified preconditions[1].

In selective tender, a number of Contractors are invited to tender. The number invited may range from as few 3 to exceeding 10 contractors. The objective is to invite Contractors whom the Owner and his Consultants are of the view are capable of carrying out and completing the job.

Hence, in Selective Tender, tenderers may be selected and invited to either[2]:

  • bid a price for construction only based on design provided by Consultants
  • bid price on the basis of providing design and construction

Disadvantages of selective tender

There are several disadvantages of selective tendering[3]:

  • the time and resources required to conduct the evaluation process and keep up-to-date approved lists
  • the competitiveness is decreased in proportion to the size of the tender list
  • that accountability could be considered harder to demonstrate than with open tendering, as marking subjective qualification criteria is open to interpretation
  • that the criteria used in selection may not be sufficiently well developed or may not be tailored to the specific needs of the project

Two categories of selective tendering

Selective tendering is categorised as either[4]:

  1. Single- stage. A shortlist of tenderers is drawn up and they are issued with a full set of tender documents for pricing. The object of selection is to make a list of firms, any one of which could be entrusted with the job. If this is achieved, then the final choice of contractor will be simple- the firm offering the lowest tender. Only the most exceptional cases justify departure from this general recommendation.
  2. Two-stage. This form of tendering is particularly suited to large or complex schemes where close collaboration with the contractor during the design stage will assist the search for the best solution for the employer in terms of cost, programme and design. The professional team is able to make use of the contractor's expertise when finalizing the design; the contractor has an opportunity to become involved in the planning and key decision-making for the project and build working relationship.

Types of tenders and tendering process

Governments purchase everything from office supplies to airplanes to power generation facilities. But they use different methods to make procurements. While the United Nations, World Bank have developed guidance to make government procurement systems more transparent, there is presently no international harmonisation of procurement methods.

There are three types of tenders[5]:

  1. Open or unlimited tendering under which all interested suppliers may submit a tender
  2. Selective tendering, under which a subset of potential suppliers are invited to submit a tender
  3. Limited tendering, where tenders are sought only from those suppliers contacted individually by the procuring entity. This less regulated from of tender might be appropriate in urgent situations or when the items is of limited value, when a formal competition is not feasible.

Footnotes

  1. D. Worthington 2003, p.227
  2. P. Lim 2016, p.21-22
  3. A. Griffith, A. Knight 2010, p.35
  4. N. Garmory, C. Winsch 2010, p.240
  5. The Environmental Performance 2010, p.103

References

Author: Brygida Mordarska