TENDER AND TYPES OF TENDERS

 

What Is Tender?

A tender is a fixed-price offer to execute a work or supply products. During the first step of this tender procedure, contractors are invited to submit sealed bids for construction or provide particularly planned services or items within a specific time limit. In this article, we will briefly discuss the different types of tenders.

Types Of Tenders In Construction

Tenders are of various types, including open tender, selective tender, serial tender, negotiated tender.

1. Open Tender

The primary tendering technique used by both the private and public sectors is an open tender. The customer promotes the tender offer in the local newspaper, with crucial details about the intended works, and invites interested contractors.

Advantages of Open Tender

1. High levels of transparency and competition

2. Create opportunities (for a more significant number of contractors) so that the owner can receive a better price.

3. There will be no partiality in the selection of contractors.

4. It is a traditional way of tendering that is well-known throughout the engineering and construction industries.

Disadvantages Of the Open Tender

1. There may be a large tender list if there are too many contractors bidding for the task.
2. The tendering process consumes additional time.
3. The source is being used inefficiently.
4. If the lowest bid is not taken, public accountability may be called into doubt.
5. Can choose a contractor with no prior experience
6. Untrustworthy competition.


2. Selective Tender

Selective tendering is an option that has been created to address the limitations of the open tender system. This tender seeks to improve the quality of proposals received by ensuring that contractors with the necessary experience can submit bids.

Advantages Of Selective Tender

1. The tendering procedure takes very little time.
2. Can choose a dependable, competent contractor.
3. It has brought down the cost of tendering. 
4. Cost-effective resource utilization.
5. Better tender process management.
6. Only qualified contractors are requested to tender.


Disadvantages of Selective Tender

1. Less competition can lead to bias.
2. It reduces the amount of work available to other contractors, particularly for new contractors.
3. The tender price is almost always greater than it would have been in open tendering.
4. Collusion is more likely.
5. Favoritism may occur throughout the shortlisting process.


3. Negotiation Tender

This tendering process is commonly used in the engineering and construction industries, where pre-contract and post-contract negotiations take place.

Advantages of Negotiation Tender

1. This form of construction tendering process decreases the danger of failure.
2. Special circumstances, like emergencies or security concerns, are the best alternatives for the employer to consider.
3. Work on the job site will begin as soon as possible. It shortens the time required to select a contractor for any tendering work.
4. During the design stage, the contractor might offer his knowledge.

Disadvantages of Negotiation Tender

  • 1. The cost of the work is likely to be higher than the cost of a competitive tender.
  • 2. It reduces the amount of work available to other contractors.

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