The successful tenderer will commonly be chosen by the client on the basis of price together with the tenderer’s track record and capabilities.
As a client and recipient of the tender proposal, you should expect for the tenderer to demonstrate their ability to execute and complete the work.
As part of the submission you should expect a contractor to deliver the following sections
(not all will be relevant to your project. Your project may require other sections as well)
The Work and Form of Contract
The Contractor should make themselves aware of the nature of the work that is it a build only, includes design, includes obtaining permits etc. They should know the location and start date and probable duration of the job, and must consider their ability to perform the work against their existing commitments. The Contractor should familiarise themselves with the contract conditions. A submission will outline the fact that the tenderer is familiar with all of those.
The Contractor must consider their ability to submit a tender in the time allowed, and consider the party to whom they are tendering. For example, is the Contractor is tendering to a consultant engineer, an architect, developer or other party? This may dictate the level of detail required.
A Contractor must consider whether they are to be paid directly by the head contractor or the owner. The Contractor should carefully study all of the contract provisions dealing with payment, and if appropriate they should qualify their tender to secure equitable conditions of payment.
For example the Contractor may end up with payment terms that their invoice will only be paid once the Head contractor has received payment from the owner. Or the payment terms may be “the invoice is due in by the 15th of the month but payment will not occurred until 30 days from the end of the month in which it is claimed” (50 days after invoice...)
1. How is payment to be made?
2. Requirements for claiming (including timing)?
3. By Head Contractor?
4. By Owner through Head Contractor?
5. By Owner direct?
6. Where are the payment conditions expressed?
7. The form of progress payment claim to be used?
8. If possible to negotiate specific enforceable payment conditions which will allow a date by which payment is to be made to be calculated with certainty?
9. Will it be necessary to qualify tenders to obtain payment for work off-site which cannot be delivered due to delay in the programme of work for the headcontract?
The Contractor must consider whether a bank guarantee can be provided in lieu of cash retentions. if there is to be retention then does the contract provide that part of the retention can be released as work progresses or at Practical Completion?
The contractor should examine all of the conditions included in the specification which deal with cost adjustment. If the specification does not contain conditions or if the conditions offered are not suitable, the Contractor should consider qualifying his tender perhaps by submitting other conditions previously used.
Council and Other Approvals
The Contractor should consider whether they are required to obtain and allow for any costs associated with Council approval, or approval of other authorities.
- Council approval?
- Approval of other authorities e.g. Water Authorities, Fire Brigade, etc.
The contractor needs to make themselves aware of any inspections required by the “Owner/developer”, authorities, “Building Inspectors”, finance providers and the impact that can have on delivery of the project.
Completion and Practical Completion
The Contractor must consider the clauses in the specifications dealing with completion and practical completion, in particular timing, notification, supply of information/warrantees and ultimate handover.
Extension of Time
The Contractor should make themselves aware of:
- The events which entitle the contractor to claim an extension of time.
- Whether there are any restrictions on how claims are to be made, for example do all claims have to be made in writing, and what time constraints are present?
- To whom and in what form are all claims to be directed.
Recovery of Costs Arising from Delay
Does the specification or the contract provide for the recovery of any costs incurred due to “prolongation” of the contract not due to the specialist contractor's default? If so, are these provisions satisfactory?
Is the dispute resolution clause satisfactory, and does it allow for the appointment of a nominee or a joint arbitrator?
The Contractor should carefully peruse the liquidated damages clause.
The Contractor should consider the programme, and whether it contains any float, and what was the Contract Program, as agreed at contract award.
The Contractor should ensure they have the right to attend all Site Meetings. If the specification does not allow for this, then the tender should be qualified accordingly.
Default by Principal
Will default by the contractor allow the subcontractor to suspend work?
Whose responsibility is the insurance? What are the insurance excesses or deductibles?
Progress of Works
It is common for a contract to require the contractor to submit a program. The program provides a basis on which cash flow requirements and personnel demands can be established. It is also the basis for coordinating the work of others, including subcontractors and suppliers.
Common forms of programs are (Gantt) bar charts, and time‐scaled networks as used in the critical path method, together with cumulative cost/work S curves.
The bar charts will usually have the activities linked to indicate dependencies between the activities. In this form they contain the same information as a time-scaled network and the distinction between the two types of programs disappears.
All programs may be at a broad or very detailed level depending on their intended use, or may be developed for subprojects.