Tender document

Tender documents - documents intended to inform tenderers to establish a common basis for their tenders.

Tender documents are prepared and sent to potential bidders to obtain tenders in the public procurement process at the tender stage. Tender documents usually include documents such as quantity account/schedule of rates, drawings, instructions to tenderers, specifications, form of contract, terms of the contract and a list of annexes.

The tender documentation for a project should normally include the design and specification of what the client wants to build. It is the same documentation that the contractor(s) must calculate and offer the price and program of the project.

Once the tender documentation is issued, the tendering process usually starts. By tender, the company selects qualified and interested suppliers based on factors such as price, availability and proposed delivery terms.

Scope of tender documents

Tender documents typically comprise documents such as:

• bill of quantities/schedule of rates,
• drawings,
• instructions to tenderers,
• specifications,
• form of contract,
• conditions of contract
• list of enclosures.

Review of tender documentation

Verification of the tender documents must be carried out by the estimator responsible for drawing up the cost estimate and drawing up the checklist of the documents received. In larger organizations, documents can be controlled by the principal estimator and other members of the contractor organization, including the planning engineer, project schedule, quantity inspector, buyer, contract advisor and contract manager.

Clear communication lines are needed to ensure that all points of view of document examiners are taken into account. The estimation (or, in the case of larger projects, the tender manager), will be responsible for coordinating these views.

The scrutiny of tender documents must aim to achieve at least the following objectives:

• the documents received are documents related to the analyzed project,
• documents and information are relevant to the assessment of costs,
• sufficient time is available to prepare the tender offer.

Where approximate project costs are provided, they must be reconciled with any advice given during the initial qualification. If no approximate costs are given, an estimate must be made of the early assessment to determine the approximate costs of the project and the scope of the work.

Quality of the tender documents

Tender documents may consist of non-structural (contract terms in sentences in natural language), partially structured (in form) and structured (tabular) information. These documents include a variety of information such as project specifications, contract terms and conditions, tender procedures, tender forms and supporting documents. Also, tenderers usually provide a variety of documents proving their ability to win a tender.

In a construction tender, the recognition of relevant information from the tender documentation is necessary for the decision-making process, in particular for the evaluation of bids based on multiple criteria.

The most important factor influencing the success of the offers is the quality of the tender documents. This may also be the main cause of disputes between the parties to the project.

Some problems may include inaccurate design drawings, missing information in a quantitative statement, and poor specifications. All these problems can lead to inaccurate estimates, higher margins in offers, claims and disputes.

The most important factors affecting the quality of tender documents according to their importance index are:

• specifications,
• design drawings,
• quantities,
• contract terms.

Examples of Tender document

• Invitation to Tender: This is a document that outlines the scope of the project, the requirements and objectives, the timeline and other relevant information. It is sent out to potential contractors or suppliers to invite them to submit a tender.
• Request for Tender: This document includes the project description and the terms and conditions that tenderers must adhere to when submitting their tender. It outlines the process for evaluating the tenders and assessing the best offer.
• Tender Specification: This document outlines the detailed technical requirements of the project and the expectations of the tenderer. It includes the performance criteria and the project evaluation criteria.
• Tender Schedule: This document outlines the timeline for the tendering process and the key milestones for each stage. It includes the dates for submitting the tender, the evaluation process and the award of contract.
• Tender Evaluation Criteria: This document outlines the criteria that will be used to evaluate the tenders. It includes both qualitative and quantitative criteria and must be agreed upon by all parties involved.
• Tender Bond: This document outlines the security deposit required from the successful tenderer. It is usually a percentage of the total value of the contract and is used to ensure the successful completion of the project.

Advantages of Tender document

Tender documents are an important part of the bidding process as they provide a common basis for tenderers to submit their bids. The following are some of the advantages of using tender documents:

• Tender documents provide an organized and standardized approach to the bidding process. They provide all the necessary information required to submit a bid and ensure that all tenderers have access to the same information.
• Tender documents also allow tenderers to compare their bids, as they provide an objective benchmark against which all bids can be judged.
• Tender documents can also help to reduce the risk of fraud and corruption, as they provide a transparent, fair and consistent way of evaluating bids.
• Tender documents also help to save time, as they provide all the relevant information upfront and allow for a more efficient and effective bidding process.
• Finally, tender documents also help to reduce costs, as they provide a clear and concise process for evaluating bids that can help to reduce administrative costs.

Limitations of Tender document

Tender documents can be a useful tool when it comes to establishing a common basis for tenders, but they are not without limitations. The following are some of the major limitations of tender documents:

• They can be difficult to interpret, as they are often filled with complex legal and technical language which can be difficult to understand.
• They may not provide enough detail to accurately assess the cost of the project, as they may not account for all of the necessary costs.
• They may be overly restrictive and prevent the tenderer from taking full advantage of all available opportunities.
• They may not accurately reflect the actual requirements of the project, as the requirements may have changed since the tender documents were created.
• They may not take into account the differences in available resources between different tenderers.
• They may not be up to date with the latest regulations, technologies, and trends.

Other approaches related to Tender document

Tender documents are just one of the approaches that can be used to inform tenderers and establish a common basis for their tenders. Other approaches include:

• Open tendering - this involves publishing an open invitation to tender documents, in which all potential bidders can submit a bid.
• Selective tendering - this involves inviting a select few companies to submit bids based on their qualifications, capacity and experience.
• Reverse tendering - this involves the purchaser specifying desired outcomes and leaving potential bidders to submit bids that meet those outcomes for a predetermined price.
• Negotiated tendering - this involves the purchaser and bidders discussing and negotiating the terms of the contract prior to submitting a bid.

In conclusion, there are a variety of approaches that can be used to inform tenderers and establish a common basis for their tenders, including open, selective, reverse and negotiated tendering.

Footnotes

Tender document — recommended articles

Bid documents — Preparation of project — Selective tender — Request For Proposal — Provisional sum — Request For Information — Evaluation criteria — Open tender — Project charter

References

• Laryea S. (2011), Quality of tender documents: case studies from the UK, Construction Management and Economics, 29 (3). pp. 275-286. ISSN 0144-6193
• Mohammed H. H., Ibrahim A. H., El-Malt A. E. (2019), Assessment of Tender Documents Quality Index, American Journal of Civil Engineering and Architecture, vol. 7, no. 4 (2019): 172-180. doi: 10.12691/ajcea-7-4-4.
• Mohemad R., Hamdan A.R., Othman Z.A., Mohamad Noor N.M. (2011), Ontological-Based Information Extraction of Construction Tender Documents, In: Mugellini E., Szczepaniak P.S., Pettenati M.C., Sokhn M. (eds) Advances in Intelligent Web Mastering - 3. Advances in Intelligent and Soft Computing, vol 86. Springer, Berlin, Heidelberg
• Rosmayati M., Abdul Razak H., Zulaiha A.O., Noor Maizura M.N. (2010), Ontological-based for Supporting Multi Criteria Decision-Making, In: Wen, D., Zhou, J. (eds.) 2nd IEEE International Conference on Information Management and Engineering, Chengdu, China, pp. 214-217. IEEE Press, Los Alamitos
• The Chartered Institute of Building (2012), Code of Estimating Practice, John Wiley & Sons

Author: Marta Cader