The Tender

The Tender
Tender is a written offer submitted by the
contractors in pursuance of the notification
given, to execute certain work or supply of
some specified articles or transport of
materials at certain rates with the terms
and conditions laid down in the tender
documents

The Tender
The law applicable to such types of offers
is the Indian Contract Act, 1872
The form in which it is to be submitted is
supplied by the department to the
contractors on usual payment of cost

Modes of Inviting Tenders

1.Negotiated Tenders
The owner may decide to call for discussions
and entrust the execution of the work to a
contractor or firm or company with whom he has
had an experience and developed confidence
The rates and or cost are mutually agreed and
agreement entered into
Suitable for special type requiring expertise and
there is only one firm or company capable of
executing the work

Modes of Inviting Tenders

2. Limited Competition
Tenders are invited from few selected contractors
Owner may not be required to incur expenses
and spend time in public invitation when his
intention is to award the work to one of the few
known reputed contracting houses
This method is suitable when there are only few
companies or firms capable of executing the work
In the case of public works for emergency works
this mode may be adopted

Modes of Inviting Tenders

3. Open Competition
The most common mode of inviting
tenders for major works
By inserting an advertisement in
newspapers, periodicals, or trade journals,
inviting all interested contractors to
participate in the invitation

 Depending upon the magnitude of the

work this may be:
i) Local Competitive Bids (LCB):
restricting the participation to the
contractors of the country in which the
work is to be executed
ii) International Competitive Bids (ICB):
allowing contracting firms or companies
from all over the world to participate in the
tender invitation

Pre-qualification of Tenderers
In this procedure the invitation in the first
instance is only for pre-qualification
From amongst the applications received
requisite number of applicants are prequalified to whom blank tender forms are
issued

Requirements of NIT
In the case of public works and government
contracts, the notice should incorporate the
words On behalf of the President of India or
On behalf of the Governor of the State as the
case may be
The contents of the notice should be so drafted
as to attract the attention of the tenderers for
whom it is intended and also to caution others
who may not be interested or not qualified to
tender

Requirements of NIT

Other information to be given may include:

Qualifications of tenderers
Name of the work, its situation and brief
description
Earnest money to accompany the tender, its
mode of payment
Security deposit that may have to be paid at the
time of signing of the agreement and its mode of
payment
Time-limit for completion of the work

Requirements of NIT
From whom and at what cost, if any blank tender
forms may be obtained and up to which date
To whom the completed tender form should be
submitted and up to what time and date
Mode of submission of tender
Conditional tenders, alternative design offers, if
acceptable or not
Date, time and place of opening tenders and if
representatives of tenders will be allowed to be
present

Necessity to include the tender notice in the

contract document
Tender notice includes particulars such as
time of completion, EMD, period of validity
of rates quoted by the tenderer etc. All such
particulars are not included in the
conditions of contract.
Without performing an agreement for the
above such particulars the contract is
invalid.
So the tender notice paper is a very
important document and must be included
in the contract document

Preparation and Submission of Tender

The steps generally taken by a tenderer if

he is interested in submitting a tender
Purchase of blank tender form
Study of tender drawings
Visit to the site of the work
Rough verification of estimated quantities
Analysis of rates or cost to ascertain prime
cost which includes Cost of materials,
labour and machinery & equipment

Preparation and Submission of Tender

Deciding the percentage of the basic or
prime cost worked out in step (5) above to
be added to it to cover overheads and
profit expected
Working out the lump sum or item rates or
percentage rate to be tendered
Checking of the rates so worked out for
omissions,
errors
and
units
of
measurement in particular

Preparation and Submission of Tender

Copies of documents required to be attached
are kept ready and are cross checked
Earnest money to be paid in the form of bank
guarantee of D.D to be obtained
Secrecy is maintained about the final sum, rates
or percentages to be tendered
Care should be taken so that no error creeps in
the rates, or in totaling
The envelope(s) are sealed and handed over
before the appointed time on the last date or
dropped in the box kept for the purpose

Openings of tenders
The sealed tenders received are to be opened in the
presence of the contractors or their representatives
tendering for the work at the time and place already
notified
The officer opening the tenders has to read out the rates
offered in case of Item rate and percentage rate tenders
and amount in the case of Lump Sum tenders for
information of all those present
The tenders which are not in proper form duly filled in or
signed or are not supported by the requisite Earnest
Money are to be summarily rejected and a record of
such cases to be kept in the register of tenders received

Earnest Money
Earnest money is an assurance or guarantee on the part
of the contractor to keep open the offer for consideration
and to confirm his intentions to take up the work
accepted in his favour for execution as per terms and
conditions in the tender
In case of a tenderer fails to commence the work
awarded to him, the earnest money is forfeited to
Government
The earnest money of the lowest tenderer whose tender
is normally accepted is retained by the Department as a
part of the security deposit for due performance of the
contract

Security Deposit
Security deposit is an amount of money which
shall be deposited by the contractor whose
tender has been accepted in order to render
himself liable to the department to pay
compensation amounting to the part or whole of
his security deposit if the work is not carried out
according to the specification, time limit and
conditions of contract
The security deposit is refundable to a contractor
after the prescribed maintenance period is over

Global tender
For big and specialized job or design and
manufacture,
global
tenders
are
sometimes invited by the authority
concerned throughout the Globe to get
competitive offers from various specialized
firms or reputed manufactures throughout
the world

Comparative Statement of Tenders

Comparative Statements of Percentage rates
and Lump Sum tenders are made out by the
officer opening the tender.
It contains information regarding the name of the
contractor, date of receipt of tenders, percentage
above or below the rates entered in the tender
documents, amount in the case of Lump Sum
tenders
The recommendation or orders regarding
acceptance or rejection of the order is recorded
on it.

Informal Tender
A tender is said to be informal
a) when it is not submitted in the form sold by the
Department or by the due date and time notified
through
b) When it is not supported by the requisite
Earnest Money specified on the tender in the
manner prescribed
c) When the tender is not properly filled in or
signed by the contractor or his authorized
representative holding power of attorney and
witnessed by a third party
The tender containing any of the above defects is
liable to summary rejection

Unbalanced Tender
For item rate tender, contractors quote their rates for the
quantities of each and every individual item. But on the
basis of shrewd anticipation or from outside information
a contractor may quote high prices for the items of works
which are likely to be increased and low prices for those
item of works which are likely to be decreased
If the contractors anticipation proves to be correct the
tender becomes unbalance and thus the department
lose heavily. On the other hand for reverse case the
contractor would stand to lose. For item rate tenders
unbalanced tender may occur.
During preparation of comparative statement an
intelligent scrutiny must be made and the unbalanced
tender shall be rejected for unbalanced rates

Acceptance of tender
After investigation of the comparative
statement the lowest tender shall be
accepted as a rule by the competent
authority. If for any reason, economical or
otherwise, the lowest tender is not
accepted, reasons should be recorded
confidentially and reference shall be made
to the tender committee or next higher
authority for order as to which of the
contractors the work should be given

Work order
In case letter of acceptance is issued first to a
contractor intimating that his rate has been
accepted and to perform a formal agreement
within a specified number of days
After the formal agreement is performed for the
contract a letter is issued to the contractor
known as Work Order to take up the work and
the date of completion is treated from the date of
issue of this letter. This is an order of
commencement for a work and is issued to a
contractor by the Executive Engineer concerned