AQS 2151 Pre-Contract Administration for Quantity Surveyors

AQS 2151Pre-Contract Administration for Quantity SurveyorsTendering: Methods of Tendering Invitation & receipt of tenders Processes & procedures in the public & private sectors

Methods of TenderingThe objective of tendering is to select a suitable contractor at an appropriate time and obtain from him an acceptable offer upon which a contract can be let.

Generally there three (3) types of tendering used:Open TenderingSelective TenderingNegotiated Tender

Methods of TenderingOpen tenderOpen to all eligible contractorsInvitation to tenders through the mass media (e.g. general press)Maximum competitionA tender document fee is required from each contractorSelective tenderAs the name implies, a list of selected tenderers is produced as a basis for this method of obtaining tendersThe design team together with Client will normally determine which contractors will be invited to tender.Design team will take into account contractors track records, business record, financial stability and capacity to carry out project

Methods of TenderingNegotiated TenderSeries of negotiation will take place between the client and selected contractor. Normally under design and build procurement.

Methods of TenderingOPEN TENDERINGAdvantages of Open TenderingNo favouritismIntroduction to new firmsMaximum competition

Disadvantages of Open TenderingIs the lowest firm capable?Is it financially secure?Experience in tender submission?Cost of tendering increased as number of tenderer increases

Methods of TenderingSELECTIVE TENDERINGAdvantages of Selective TenderingOnly capable firms are invited to tenderReduces the overall cost of tendering

Disadvantages of Selective TenderingHigher tender pricesPossible charges of favoritism

VALUE OF WORKSWorks < RM 10 millionInvited for local Companies with 100% bumiputeraWorks RM 10 million RM 25 millionInvited for local Companies with 100% bumiputera OR Public Listed companies on BSKL with foreign shares not more than 30% and Managing Director and workers are 100% local.

VALUE OF WORKSWorks > RM 25 millionInvited for local Companies with 100% bumiputeraLocal companies listed on BSKL OR JV companies, with foreign equity not more than 49% and majority of Board of Directors, Management and workers are local.

Invitation & Receipt of TendersTender advertisementLocal tender - minimum: in one main BM dailyInternational tender - in one main BM daily and one main English daily, and distribute to foreign embassies

Invitation & Receipt of TendersInformation in tender advertisement:name of department calling the tendertitle of projecttype of tendercontractors qualificationsClass head and sub-head (PKK & CIDB) place, date & time to purchase tender documentplace, date & time to submit tender documentprice of tender document site visit (if any)(See sample of tender advertisement)

Invitation & Receipt of TendersSubmission of tender:submit the priced tender document to and at the time as stated in the tender advertisementclosing time is normally no later than 12 noon

Late Submission:Late not more than 30 minutes. Can be accepted. (Subject to approval)

PKK Classifications

CIDB Classifications

Special Approval For TenderPKK has the power to consider and approve any special request from contractors to participate in tenders for which they are not eligible to participate due to their registration of classes and experiencesTendering Procedures

Tendering Procedures (with specific reference to the Public Sector)Why public sector?

Largest single owner/developer

one-third of total construction

procedures are more structured and formalised (e.g. governed by factors such as source of funding and type, nature and estimated cost of project)

basis for good practice

Category of ProcurementWorksinfrastructure, building & engineering, M&E

Goods raw materials, intermediate and finished goods

Servicesmanpower, consultants and expertise

Types of ProcurementDirect Purchasegoods & services up to RM10,000 - directly from any known suppliersgoods & services between RM10,000 - RM50,000 - from suppliers registered with MOFworks up to RM50,000 - indent to a contractor registered with CIDB and PKK

Quotation works, gods and services between RM50,000 RM200,000may be invited through registered post, by hand or posted on designated notice board

Tendernext slide..

Tendering ProceduresProject >RM 200,000 to be let on open tendering (there are exceptions)

Selective tendering / negotiation allowed in specific circumstances (e.g. urgent or sole supplier) - prior approval from MOF

Issuance of Tender DocumentIssue from the office that prepares Tender Document i.e. PWD officesBefore the issuance. The office shall ascertainThat only authorized representatives of contractors are allowed to take the document and they should produce evidence or credentials of their authoritiesThat they have to show their Bumiputra statusThat a verification of status shall be made to ensure that it is still valid on that date

The issuing officer should record names, addresses and classes of registration of contractorsTendering Procedures

Tendering ProceduresMandatory requirement for all tenders for works funded by the govt. own source of fund to be opened to Malaysian contracting firms only

The exceptions:incapability of Malaysian contractors to undertake certain worksfor civil engineering works valued >RM50 million each

Tendering ProceduresTender Depositlocal tender - no tender depositinternational tender - tender deposit varies between RM50,000 - RM1 million

Tender Periodlocal tender - 21 daysinternational tender - 56 days

Tendering ProceduresTender Validity Period90 days (may be extended)withdrawal after closing date - disciplinary action by PKK and/or agency concerned1st Offence : 2 years suspension from participating in government tenders2nd Offence: 5 years3rd Offence: Cancellation of registration Shareholders : blacklisted Board of Directors : blacklisted

Receipt and Opening of TendersTenders shall be submitted at the office or deposited into tender boxes provided on or before the date mentioned in the Tender NoticeTenders shall be opened by Tender CommitteeOn opening Committees shall prepare a schedule of tenders consisting of names, classes and registrations, status of tenderers, amount of tenders and time for completionNo tender shall be open after the closing time but shall be accepted and forwarded to Tender Committee as they are.Tendering Procedures

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