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Task - 1: Understand the information required to produce a tender

1.1 | Explaining the client’s involvement in the tender process.

v Client

A Client means a person for whom a project is carried out, in the course or furtherance of a trade, business or undertaking, or who undertakes a project directly in the course or furtherance of such trade, business or undertaking.

The Client is the person or company, with the controlling interest in the project. Generally the Client will retain a significant level of control over the assessment and appointment of Designers and Contractors for a project.

Generally, there are many types of Clients. Some of them are:

ª Doctors, extending their Surgery.

ª Hoteliers or B&B proprietors, extending their premises;

ª Publicans, extending their premises; Farmers constructing outbuildings.

ª A supermarket or shopkeeper, refurbishing their premises.

ª A small manufacturer, installing new machinery.

ª A Local Authority or a Hospital Authority engaged in construction activities.

ª A School board, building an extension or renovating.

But client or client organizations are mainly divided into private, public (Government), and Quasi Government bodies. The private clients include residential, industrial, commercial, social, charitable and professional organizations, and individuals. The public client means Government which may consist of various government departments.

Some of the clients are well experienced in construction works and might have their own project management teams of designers, quantity surveyors and site supervisory teams, etc. On the other hand, some of them, particularly those small individual developers, may have development only once in their lifetime.

v client’s involvement

A client is a most important person and involving as a major role as one of a key stakeholder in the construction projects because the client is only providing money for construction projects.

The first major Procurement Procedure for the Client is the appointment of the Consultant or Designer to undertake the design of the project and to prepare the Tender Documentation for competitive tendering by contractors.

A client must be noticed about some particular construction companies for tendering process, then only he can select a correct contractor to carry out a construction project with careful thoughts. Sometimes, client’s wrong selection may lead to an unhappy relationship between client and contractor and it will make no satisfaction to the client.

Clients will usually identify their involvements in terms of commercial or social pressure to change such as:

Ø Space requirements: to improve production levels and production capacity, to provide domestic or social accommodation

Ø Investment: to exploit chances to capitalize in buildings

Ø Identity: to develop the individual’s or organization’s standing in its market or society

Ø Location: to lead a better use of capitals, capture a new market or improve facility

Ø Politics: mainly in the public sector

Based on the tender documents and drawings given by consultant, client will call tender for the works. Once awarded, client will issue Letter of Appointment to the successful tenderer.

The main aim of the client organizations is to accomplish a degree of certainty in the building process. On the other hand, individuals and inexperienced clients are led by their advisers and contractors. Clients have one of the biggest influences over the way a project is run. They have substantial influence and contractual control and their decisions and approach determine.

§ The time, money and other resources available for projects

§ Who makes up the project team, their competence, when they are appointed and who does what

§ Whether the team is encouraged to co-operate and work together effectively

§ Whether the team has the information that it needs about the site and any existing structures

§ The arrangements for managing and coordinating the work of the team.

In general, a client aims to choose a team that he can trust and depend on to reduce uncertainties during a building’s design, construction and use.

Ø The design: by designing to a budget

Ø The time: by contractors accepting more responsibility for meeting completion dates,

Ø The cost: by achieving realistic cost estimates and tenders which reflect the final cost

Because of this, they are made accountable for the impact their approach has on the health and safety of those working on or affected by the project. Clients are not required or expected to plan or manage projects themselves. Nor do they have to develop substantial expertise in construction health and safety, unless this is central to their business.

Clients take on additional responsibilities. If they specify materials or methods of working they may well become designers in relation to those specific matters. They will also legally be contractors if they directly manage or carry out construction work.

Clients should consult with appointees to find out how much time they will need for planning and preparing before work is expected to start in order that both parties can agree a suitable time period.

Clients must inform their appointees how much time the client has allowed for planning and preparation before the work starts. Clients often employ more than one designer, for example architects, civil, structural and services engineers. In such cases they all need to know who does what, and the timing of the appointments needs to enable the design work to be co-ordinate from an early stage.

When deciding whether management arrangements are suitable and maintained throughout the project, clients will need to make a judgment, taking account of the nature of the project and the risks that the work will involve. He arranged for plans for these to be provided by the relevant utility suppliers, and confirmed the exact location of the services by carrying out on-site tests. This information was then provided to contractors who were asked to tender for the work so that they could take account of the presence of the services when bidding for the work.

Clients must provide designers and contractors who may be bidding for the work, with the project-specific health and safety information needed to identify hazards and risks associated with the design and construction work.

Many clients are prepared to pay for a good service. The client has traditionally employed an inactive role in the construction process. Standard forms of contract require the employer to pay for work properly performed.

The client is the most important member of the team because he is the patron for the organization, he identifies the need for the building and he must pay everyone who is directly or indirectly involved in the construction process.

1.2 | Identifying the constraints that apply to the tender Process.

We know that there are many constraints in a tender including client’s objectives, client’s constraints, financial constraints, physical constraints, legal constraints, design constraints, etc.

There are many procurement paths which the Client decides at an earlier stage prior to the start of tendering process. In the Middle East, specifically in the Civil engineering works such as Roads, Infrastructure, Bridges and Underpasses; tendering process starts after the completion of design and all tender documents including bill of quantities. This whole process is famously known as the “traditional method”. Usually in the traditional method, the Employer takes his plan through the earlier stage with the help of a professional team “consultant”, before hiring Contractor.

Before preparing a tender for a project, the client must have his own objectives in developing the project, he needs to build the building within a specific period. The ultimate goals of most of those objectives are to make profits. Client may also have his own constraints in developing the project. For instance, he needs to build the building within a specific period. Sometimes, there may also construction constraints of a project like restricted time period for noisy operation in a site adjacent to a school.

Financial resources are also very important to the development of a project. Even a project with good profit, the project needs to be financed at the initial and early stage of the development. Client may therefore need to arrange finance from banks in order that the project can be executed.

Physical constraints mean the physical characteristics of the site for development. Such characteristics include:

Ø The site: plot area, proportion of width to depth, shape, site geology, site contamination, hydrotropic characteristics, site fronting large area of water, etc

Ø The building improvements: the maintenance conditions of the building, like cracks, leaks, etc.

Ø non-building improvements: fencing, position and depth of utility lines, retaining walls, swimming pools, footpaths drainage culverts, paving, tennis court, refuse collection point, transformers, etc. presence of services provision like water, gas, electricity, sewer, telephone, cables, etc.

Legal constraints include restrictions on the title, restrictions on use of the site, restrictions on profits and income flows, etc. Sometimes, they may also mean community influences associated with the ownership and use of land.

Design constraints are rules or regulations that the designers have to be followed in their designs. For instance, usually the construction of the project is subject to height limit, plot ratio, building regulations on fire escape route, etc.

Financial resources are also very important to the development of a project. Even a project with good profit, the project needs to be financed at the initial and early stage of the development. Client may therefore need to arrange finance from banks in order that the project can be executed.

Some of the constraints analyzed for tender process:

ü Tenders are poorly presenting which make them look unprofessional

ü Tenders are poorly presenting which make them difficult to understand

ü Tenders contain inaccuracies that may dent client confidence

ü Tenders take longer to complete than competitors

ü Revisions to tenders take longer to complete than competitors

ü Tenders are not competitively pricing

ü The tender team do not respond appropriately to client demands

ü The tender team do not efficiently communicate with client

ü Not enough hours in the day to review the tender process

1.3 | Describing the contractual documentation required to support the tender process.

A tender is a submission made by a prospective supplier in response to an invitation to tender. It makes an offer for the supply of goods or services. Tender documents are prepared to seek tenders. Tender documents may be prepared for a range of contracts, such as equipment supply, the main construction contract (including design by the contractor), demolition, enabling works etc.

Generally a tendering process is based on tender documents, which is depend on type of contract. So that can be any of the following types of contracts:

Fixed price contract: where the sum of money is stated in the contract as payment for work, the payment may be adjusted according to strict conditions in the contract.

Measurement contract: will allow the contract sum to be calculated later, usually as the aggregate of various rates submitted by the contractor. The contract sometimes includes a target price.

Cost-reimbursement contract: an arrangement whereby the cost, whatever it may be, will be paid by the client on the basis of the actual incurred by the contractor, plus overheads and profit.

The tender document issued to the tenderers for tender may include the following:

§ Notice / invitation to Tenderer

§ General and special Conditions of Tender/ instruction to bidders

§ General and special Conditions of Contract and appendix to condition of contract

§ Form of Tender(agreement)

§ Drawings (Tender)

§ Bills of Quantities (BOQ)/ Specifications/schedule of rates

§ Health and safety plan

§ Instruction to bidders

§ Specification

§ Return envelope

§ Schedule of prices

§ General Summary of Tender

§ Bonds(specimen bonds)

Notice / invitation to Tenderer

An invitation to tenderer (ITT) is the initial step in competitive tendering, in which suppliers and contractors are invited to provide offers for supply or service contracts, the ITT is one process in IT procurement. Invitations to tender are also known as calls for bids or calls for tenders.

In an open invitation to tender, any vendor who can provide a guarantee of performance may offer. In closed ITTs, vendors may have been preselected, screened or qualified by an expression of interest to generate a shortlist of eligible candidates. Often, proposals to a tender are under a double-envelope system, with separate technical and economical envelopes provided for individual evaluation by the inviting firm.

An invitation to tender will include information describing the goods or services required in sufficient detail to enable the tenderer to prepare an accurate tender that is in a prescribed format so that it is easy to compare with other tenders.

Condition of contract

This is one of the tender document and this sets out the obligations and rights of the parties and the detailed conditions under which a subsequent contract will operate.

Bill of quantities

The bill of quantities is a vital tender document; a contract document should be an accurate description and quantification of the project. There should be a cross-reference to the tender drawing and architect’s notes or specifications.

Bill of quantity is the major component which can be taken to identify the cost information if it is available. Normally BOQ gives full item description for each and every item including quality control and workmanship for that particular items. BOQ is divided as preliminaries, preambles, measured work, prime cost and provisional sums

We have to send two copies of the bill of quantities, the general arrangement drawings, Health and Safety Plan, two copies of the form of tender and to envelope for the return of the tender to the contractor.

In the bill of quantities the work agreed to be done under the contract are listed as each item along with the quantity of material needed and quality specified for the work. Contractor is usually paid according to the quantities of items completed each month. One of the advantages of this method is that it induces performance. It can be effective because the Contractor is paid as soon as possible after incurring costs and the Client gains by reducing the total cost of the construction. The disadvantage is that this method is more complex and expensive for all parties when compared to the basic lump sum contract.

Drawings

Normally general arrangement drawing will be provided, showing site location, position of the buildings on and means of access to the site and floor plans and elevations. Tenders are not normally given working drawings. However, they are informed that they can inspect drawings not supplied to them, at the consultant’s office.

The bill of quantities will list the drawings which were used in preparing the documents. With standard methods of measurement aimed at producing shorter bills of quantities, there is a greater reliance on drawings by the tenderers. The tenderers are great reliance on drawings, aimed at producing shorter bills of quantities with standard methods of measurement. Tendering costs could be cut if copy negatives or reduction prints can be produced. For large projects, drawings are often issued electronically. This might be on CD-ROM, by e-mail or with tenderers downloading drawings from a secure website.

The main types of drawings commonly used in construction:

§ Survey drawings- based on measured survey or an ordinary survey sheet and are used to produce block and site plans.

§ Preliminary drawings.

§ Production drawings.

§ Record drawings.

Form of tender

This is a pre-printed formal statement, often in the form of a letter, in which a tenderer fills in, in blank spaces, his name and address and the sum of money for which he offers to carry out the work shown in the drawings and described in BOQ or specification.

The form of Tender is a form where the tenderer can fill in details relating to their offer, including the lump sum for which they are offering to complete the works. A form of tender is a pre-printed formal offer, usually in letter form, which ensures that all tenders are received on the same basis and should be simple to compare. It may be sent with a collusive tendering certificate and appendices that are used for declarations about fair wages or it can be basic lists of materials.

Health and safety plan

A pre-tender health and safety plan is a requirement of the Construction (Design and Management) Regulations 1994.

During its development, the plan can provide a focus at which the health and safety considerations of design are brought together under the control of the Planning Supervisor. The plan plays a vital role in the tender documentation. Prospective Principal Contractors are made fully aware of the project’s health, safety and welfare requirements, giving a level playing field on which to provide tender submissions. The plan provides a template against which different tender submissions can be measured. Such information that the planning supervisor has, or can easily obtain, that a contractor would need in order to meet any of the requirements imposed on them by the Regulations. Information that any contractor will need to know about any welfare provisions that will be required.

Schedule of pricing

As an alternative to a specification in the case of without contracts, tenders may be supplied with a schedule of works. This list of work comprised in the contract under appropriate heading. The tenderers may be required to price the schedule.

Return envelope

Each tenderer should be supplied with a pre-addressed envelope clearly marked “Tender for (name of project)”.this will ensure that tenders are recognized as such when received and will not be prematurely opened. They are to be marked so that they will be easily recognized and not arrive to the wrong person.

The Construction Industry Board, (CIB) has published a comprehensive list of tender enquiry documents in its “Code of Practice for the Selection of Main Contractors” 1997.

Instructions to bidders

This is a statement in which states under which conditions the tender should be submit. This includes, from whom and where tender document can be obtained, closing data and time of the tender, amount of the refundable tender deposit and/or tender bond etc.

Specifications

Specifications is prepared by an architect or consulting engineer to provide written technical information mainly on the quality of materials and workmanship. The specification would be a contract document in its own right if the contractor tenders on the basis of drawings and specification only.

Task - 2: Be able to apply the principles and techniques of estimating

2.1 (a) Identify the factors to be considered when collect the data required to build up unit costs

The factors to be considered when collect the data required to build up unit costs are:

SUBCONTRACTOR COST

The Consultants / Clients Approved Special SUBCONTRACTOR COST IS HIGH as it’s required for infrastructure Work, MEP Work, Low Current works, some other Risky works & etc.

MANOPOWER

The quality Semi Skilled, Skilled & Very professional Experts required like Project or The Workers Demonstrating Professionals, Project Manager, Architects & etc.

SUPPLIER COST

The Government Authorized or Client Approved Suppliers Material cost according to the requirement & expected quality, and also the location of project which the suppliers will consider about the transportation, safety & etc.

MATERIAL

D 1. COSTOMIZED MATERIAL, Which are the items made especially for the required particular project / person as the client is expecting the particular materials to be used either it can be from local & abroad.

SITE VISIT

The visit to site can be made after all enquires have been dispatched and before prices begin

To come back. The visit to the site will enable the estimator to produce a report giving the

Following information:

ü The position of the site in relation to roads etc

ü Names of local and statutory authorities

ü Details of site/ground conditions, spot items etc

ü Site access, exit and possible site layouts

ü Facilities for disposal of surplus excavated materials etc

ü Safety , health & welfare for the Protection

ü Facilities (Water , Telephone , Lighting & Power)

ü Temporary roads, hard standings (Hard Surfaced where we can park the heavy vehicle), crossing etc.

ü Traffic regulation

ü Maintenance of private & Public roads

ü Removal of rubbish , debris etc

ü Control of noise ,pollution which can harm the Human been and environment etc

ü Site Drawing Details

CONSULTANT MEETING

During the meeting discussing about the Project quality & design and more details about the project which will affect the tender.

2.1 (b) Collect the data required for building up unit costs of at least two civil engineering activity of your choice.

Find Attachment

“ 2.1 (b) File ”

2.2 | Describe the standard data documentation and measurement rules in estimating

Estimating is concerned with the processes used by contractors to establish the cost to themselves of carrying out construction work. Tendering is concerned with the Commercial aspects of bidding for and obtaining work by contracting companies.

Measurement and accurate estimation of the cost of work is crucial to providing meaningful cost information for both the construction business and the client, and the process of bidding for a construction contract normally involves the contractor in accurately measuring the works required to enable the costs to be estimated in order to compile the tender

How to use standard data documentation in estimating

In making an estimate, the goal is often most useful to generate a range of possible outcomes that is precise enough to be useful.

Estimating and cost planning using the Rules of Measurement offers comprehensive guidance on all the technical competencies concerned with estimating throughout the precontract stages. It provides a full commentary to the Measurement rules, with detailed and comprehensive examples of how to measure estimates and cost plans in accordance with this new prescriptive approach.

And we should follow the below mentioned standard documents of measurement rules in estimating.

(Standard Method of Measurement) SMM7

The Standard Method of Measurement (SMM) is published by the Royal Institute of Chartered Surveyors (RICS). It is now in its seventh edition (SMM7).

SMM7 provides detailed information, classification tables and rules for measuring building works. It is important that there is a uniform basis for measuring building works in order to facilitate industry wide consistency and benchmarking, to encourage the adoption of best practice and to help avoid disputes.

SMM7 is typically used in the preparation of bills of quantities, documents that provide measured quantities of the items of work identified by the drawings and specifications in tender documentation. Bills of quantities are issued to tenderers for them to prepare a price for carrying out works.

SMM7 is accompanied by the Code of Procedure for the Measurement of Building Works (the SMM7 Measurement Code). Whilst SMM7 can have a contractual status on a project (for example in the JCT Standard form of Building Contract), the Measurement Code is non-mandatory.

New Rules of Measurement (NRM)

The New Rules of Measurement (NRM) are published by the Royal Institute of Chartered Surveyors (RICS) Quantity Surveying and Construction Professional Group. They provide a standard set of measurement rules for estimating; cost planning, procurement and whole-life costing for construction projects. Adopting a standard methodology such as NRM facilitates consistency and benchmarking and helps avoid disputes.

NRM is a suite of documents, comprising three volumes; NRM1, NRM2 and NRM3.

NRM1:-

NRM 1 provides guidance on the quantification of building works for the purpose of preparing cost estimates and cost plans. Direction is also given on quantifying other construction project costs which are not reflected in the measurable building work items: preliminaries, overheads and profit, project team and design team fees, risk allowances, inflation, and other development and project costs.

NRM2:-

NRM 2 provides guidance on the detailed measurement and description of building works for the purpose of obtaining a tender price. The rules address all aspects of bill of quantities (BQ) production, including setting out the information required from the employer and other construction consultants to enable a BQ to be prepared, as well as dealing with the quantification of non-measurable work items, contractor designed works and risks. Guidance is also provided on the content, structure and format of BQ, as well as the benefits and uses of BQ

NRM3:-

NRM 3 will provide guidance on the quantification and description of maintenance works for preparing initial order of cost estimates during the preparation stages of a building project, cost plans during the design development and pre-construction stages, and detailed, asset-specific cost plans during the pre-construction phases of a building project, and guidance on the procurement and cost control of maintenance works

CESMM (Civil Engineering Standard Method of Measurement)

The Civil Engineering Standard Method of Measurement", CESMM has been well-established as the standard for the preparation of bills of quantities in civil engineering work. This third edition brings the method into line with changes in industry practices. It includes the standard method of measurement for water mains renovation.

"The Civil Engineering Standard Method of Measurement" - CESMM has been well-established for 15 years as the standard for the preparation of bills of quantities in civil engineering work. This third edition, "CESMM3", brings the method into line with changes in industry practices and extends its usage into several new areas. The main changes are: amendments to bring "CESMM3" into line with the "ICE Conditions of Contract, 6th edition"; the standard method of measurement for water mains renovation has been included to cater for the needs of users who found that this activity was not satisfactorily catered for in "CESMM2"; a series of amendments to bring "CESMM3" into line with recent developments, such as changes in British Standards; a completely new class, class Z, has been included to provide users with the ability to specify a simple building works incidental to civil engineering works within a "CESMM" bill without having to resort to the use of a building method of measurement. "CESMM3" has been produced under the auspices of the ICE's CESMM Review Panel with the drafting carried Quantity Surveying provided the proposals which formed the basis of Class Z.

Principles of Measurement (International) (POMI).

Principles of Measurement (International): For Works of Construction, (POMI), was published in 1979 in several languages.

A set of principles of measurement is essential to reduce widely varying practices and consequent disputes. Although there are an increasing number of contract documents requiring bills of quantities, often there is no framework within which they can be prepared, nor a commonly agreed basis of measurement. These principles, prepared by the RICS, provide a uniform basis of measurement. They are suitable for use where existing rules are inappropriate or where no rules exist.

A Principles of Measurement (International) (POMI), which showed that it was still widely used particularly in the Middle East.

Building Schedule of Rates

This Schedule of Rates is solely compiled as a basis for tendering of Term Contracts for which the tendering Department is responsible. The Schedule rates may not necessarily reflect the market values of materials / products / works as included in this Schedule.

There are no representations, either expressed or implied, as to the suitability of this Schedule for purposes other than that stated above, and the tendering Department does not accept any liability and responsibility for any special, indirect or consequential loss or damages whatsoever arising out of or in connection with the use of this Schedule or reliance placed on it.

Users who choose to adopt this Schedule for other purposes are responsible for making their own assessments and judgment of all information contained herein, and they shall acknowledge and shall deem to have acknowledged any risks and consequences resulted from such use.

Computer technology enables Carillion to offer a bespoke schedule service to suit individual client needs - ranging from schedules based on client supplied resource costs to labour or material-only schedules, or even schedules in other currencies.

2.3 | Produce the method statements suitable for compiling unit costs of at least two civil engineering activity of your choice.

The standard methods of statement for compiling unit costs are containing the following.

1. Material cost

:- The material cost is entitled the Purchasing , Transportation ,Loading & unloading , Wastage ,storage, & etc. are considered to prepare the Unit cost.

2. Manpower / labor Cost

:- The manpower or the labors are the main key of project and their unit cost is calculated as per the Basic salary , Annual holidays , sick leave ,Public holiday , Airfare , Insurance ,Overtime , Accommodation , Transportation , Gratuity and etc.

3. Plant & Equipment Cost

:- If the plant & equipment is going to be bought or rented by the company so those items mentioned below is considered for compiling unit cost.

Initial cost, rental cost, resell value, insurance, maintenance, fuel cost, driver cost.

4. Management fee / cost

:-Which are the activities conducted by Management like supervision, Coordinating the project ,HR dpt Activities ,required document works for the project and some missing or hidden activities in the above 3 items are merged here in this So all of these are considered to prepare the unit cost.

5. Profit and overhead

:- General Contractors charge for Overhead and Profit as line items on repair or rebuild estimates. Insurers sometimes balk at paying Profit & overhead, but they are legitimate costs of doing business and policyholders are entitled to collect insurance benefits to cover them in most scenarios.

Overhead and Profit covers a General Contractor’s time and expenses and is calculated as a percentage of the total cost of a job. The rule of thumb is that any time a General Contractor is involved in a job with three or more “trades” (subcontractors such as plumbers or electricians), he/she is entitled to be paid for supervision and coordination. Overhead and Profit are two different types of costs, but they’re almost always paired under the label Overhead and Profit and stated as two separate numbers

2.4 | Calculate unit costs for given items

Build up All-in-rate for following item (P7, M2, M3 & D2)

a) Mason

b) Excavator

c) Cement

a) Mason

All in rate for mason expenses per year

QR-40.00 per day basic salary

Sl. No.	Description	Unit	Qty.	Rate in QR	Amount in QR
1	Basic salary (6x4x12)	Day	288	40	11,520.00
2	Annual holyday	Day	21	40	840.00
3	Sick leave	Day	14	40	560.00
4	Public holyday	Day	8	40	320.00
5	Nonproductive day	Day	5	40	200.00
6	Air ticket	Year			2,000.00
7	Insurance	Year			4,000.00
8	Over Time (0.5x4x12)	Day	24	40	960.00
9	Accommodation	Year			2,000.00
10	Food (300x12)	Day	300	12	3,600.00
11	Gratuity	Year	21	40	840.00
12	Transport	Year			2,000.00
13	Profit & Overhead (15%) (1-12) (28,840x.15)				4,326.00
	Total				33,166.00

All in rate mason expenses for one month 33,160.00/12 = 2,763.83 QR

b) Excavator

All in rate for Excavator expenses per year

QR-10,000.00 per month rent

Sl. No.	Description	Unit	Qty.	Rate in QR	Amount in QR
1	Rental	Month	12	10,000.00	120,000.00
2	Insurance	Year		4,000.00	4,000.00
3	Mainatnce				35,000.00
4	Fuel (6x4x12)	Day	288	100.00	28,800.00
5	Driver	Month	12	2000.00	24,000.00
6	Profit & Overhead (15%) (1-5) (211,800x.15)				31,770.00
	Total				243,570.00

All in rate Excavator expenses for one month 243,570.00/12 = 20,297.50 QR

c) Cement

All in rate for Cement material

QR-30.00 per 50kg Cement Bag

Sl. No.	Description	Unit	Qty.	Rate in QR	Amount in QR
1	Purchase cost	No’s	500	30.00	15,000.00
2	Transportation			1,000.00	1,000.00
3	Loading & unloading to store (4 labour @30)				120.00
4	Loading & unloading to Site (4 labour @30)				120.00
5	Wastage (10% of basic cost)				1,500.00
6	Profit & Overhead (12%) (1-5) (17,740x.15)				2,661.00
	Total				20,401.00

All in rate for one 50kg Cement bag material 20,401.00/500 = 40.80 QR

Task - 3: Be able to formulate an estimate for construction operations

3.1 | Explain how the bill of quantities format may be used to build up estimates.

An estimate is prepared with BOQs. BOQ is playing a major role in an estimate. A BOQ is prepared from the quantities calculated based on standard method of measurements. A BOQ must include the following columns, 1) item no., 2)description of work, 3)unit, 4)quantity, 5)rate and 6)amount. These are the important elements in a BOQ. From above elements 1 to 4 will be completed from the abstraction sheet and description from the standard method of measurement.

Item ID	Description of item	Unit of measurement	Quantity of work	Rate in QR	Total amount in QR
01	Paint	M2	1,000	90	9,000.00

Then building-up unit rates is the major part of an estimate. This rate build-up is mostly done by an experience estimator / senior quantity surveyor in a company. He should have fluent knowledge of market rates and rate build-up techniques. While building-up rates the requirement from specifications, drawings to be considered. A rate will include material, direct manpower, tools & equipments, indirect manpower, overheads and profit. These rates are the key factor of a firm in a tendering project.

Once the rate build-up is completed and then it will be inserted in item no.5 and then item no.6 (Amount) will be calculated.

Then the preliminary activities and conditions of contract charges will be calculated separately and will be added to the total sum of the project.

This is a standard format of a typical estimate. Proper and accurate BOS is the success of a company.

OBJECTIVES.

The objectives of the Bill of Quantities are:

· To provide enough information on the quantities of Works to be performed to enable bids to be prepared efficiently and accurately; and when a contract has been entered into,

· To provide a priced Bill of Quantities for use in the periodic valuation of works executed.

· The main purpose of a Bill of Quantities is to itemize and define a project so that all tenderers are preparing their price and submission on the same information.

In order to attain these objectives, works are itemized in the Bill of Quantities in sufficient detail to distinguish between the different classes of works, or between works of the same nature carried out in different locations or in other circumstances which may give rise to different considerations of cost. Consistent with these requirements, the layout and content of the Bill of Quantities are required to be as simple and brief as possible.
The large data bank of information contained in the Bill of Quantities can be used in many ways to help the post-contract control of a project.
Pricing of different items of work are done on the basis of the cost of materials, equipment, labor, and overheads and profit.

Materials: The materials costs are calculated by examining the material quotations received from suppliers, applying appropriate wastage factors, and delivery charges.
Equipment: Cost of equipment is calculated usually as a percentage of the cost of materials. Depending on whether the equipment is owned or rented, this percentage will vary.
Labor: The most difficult element to price is the labor cost. Most of the times, it is not sufficient to rely on published standard rates. Allowances for absences due to sickness, loss of time due to inclement weather, overtime, etc. are required to be built in to arrive at a pragmatic all-inclusive labor rate. Rate of productivity is another factor that plays an important role in fixing labor prices.
Overheads and profit: Once the cost of materials, equipment, and labor has been added up, a percentage for overhead and profit is added to the item rate. This percentage may vary from project to project depending on how well the document has been prepared by the QS and also on market conditions. It may range from 2.5 to over 25 percent.

Once the pricing of all individual items for all trades is completed, the amounts are carried to a summary page to indicate the total bid price.

3.2 | Determine the critical factors that affect profit margin in any construction project.

Construction companies usually have a profit margin that's less than it is for most companies. Numerous factors affect a construction company’s profit margin, from unexpected delays to unexpected disasters.

During the Tender adjudication meeting we are discussing about the critical factors that affect the Profit margin in construction project, and those factors are described below.

Risk Factors

ü When e are having the risk factors very high in the project so the Profit margin will go high

ü In case if the risk factors are less so the profit margin could be less.

Current work load

ü When the company has many projects Profit margin will go high

ü But if the Current Work load(Less projects) so the Profit margin could be less

Safety Factors

ü When the project is required for more safty so Profit margin will go high

ü But if it’s not required for the more or high safety so the Profit margin could be less

More Competitors

ü When the competitors are less for the project so the Profit margin will go high

ü But When there are more competitors available for the specific project so the Profit margin Could be less

Location of Project

ü If the Location of the Project is far, in undeveloped reas, in jungles, in Sea side, in Mountain areas Inapropriate Whether condition area, Remoteness area, where we need to all e facilities, preliminary works & to firm the site & etc.so the Profit margin will go very high.

Client requirement

ü When the client required for the special types of task So Profit margin will go high.

These are the main factor to consider the Profit margin in any construction project.

3.3 | Describe how the health, safety and welfare plan affects the tender in construction project

Introduction

The main purpose of the Health and Safety in Employment is to make Workplaces safer through better management of health and safety. In short, everyone involved with a project of any kind – from clients, planners and Designers through to contractors and on-site workers – has a role to play in health and safety

During the project – from concept to construction completion.

Anyone who contracts another party for any part of a project (that is, engages anyone to Work on the project for gain or rewards other than an employee) has a duty as a principal. Principals are required to take all practicable steps to ensure the health and safety of people Contracted by them to carry out work of any kind throughout all stages of a project.

A document the principal contractor is required to develop from the pre-tender health and safety plan before work starts on site and to keep up to date throughout the construction phase. The plan must set out the health and safety goals for the project. It must explain how the key health and safety issues will be managed, providing details of good working practice, incorporating, or referring to, any required method statements, safety rules and monitoring arrangements. The level of detail should be proportionate to the risks associated with the project. A short, focused plan is preferable to an unnecessarily long one with limited practical use.

Contents

The following information should include as a minimum, from the start of the Tender in construction phase:

Pre-tender health and safety plan

The pre-tender health and safety plan is a statutory requirement and is prepared by the planning supervisor to describe the path project to be carried out, its safety implications and the preparations that the contractors will have to make to manage safety on the site. It is prepared along with the other contract documents and sent out to contractors when they are asked to bid for the work. It focuses on factors affecting the whole site: the design of the path and the implications this has for the types of construction work needed; the types of hazards they may encounter on the site; and rules and risk controls that the contractors will have to implement to manage the site safely. The pre-tender plan does not tell a contractor how to work safely. It identifies the potential risks and asks the contractor to tell the client how – and sometimes it may not be possible – they will carry out the contract to achieve both a good product and a safe site.

Site and environment

Location and land use: Describe the site, where it is, who owns it and major land uses (even open hillside may be used for sheep grazing or deer stalking, and these will affect when and how work takes place).

Planning constraints: Most mountain access sites fall within nature conservation designations, including Sites of Special Scientific Interest, Special Areas of Conservation and Special Protection Areas. They are often within landscape designations such as National Scenic Areas. These designated areas will require permissions to work from SNH or local authority planning departments. Safe operation on the site may be constrained by the need to minimize disturbance, and this will need to be discussed in advance with site managers and can affect timing.

Services: Point out any public services, including gas, water, sewage, electricity and phone cables, crossing the site, both below and above ground. It is the obligation of the manager to point these out, and for the contractor to contact the service operator and make arrangements to work around them, with temporary disconnection if necessary.

Access: Identify the route for access on foot, parking for vehicles and the extent to which vehicles can be taken on to the site. Also identify walk-in times to the start of the contract site.

Ground conditions: Make a note of the vegetation, slope and conditions under foot.

Design information

Design drawings: A full list of information available, including site surveys, bills of quantities, specification drawings, and so on.

Existing safety information: A list of any existing safety files, as a useful point of reference and experience from earlier work on the site.

Significant hazards: This is the single most important section of a pretender plan, and identifies the most significant hazards relating to the site – the factors most influencing safety, and the factors which contractors should spend most time assessing and describing in their method statements. Most sites have significant hazards, including:

Ø Exposure to extreme weather, high rainfall and strong winds

Ø Mountain terrain, including steep slopes, uneven surfaces and hidden drops

Ø Use by the public, particularly if the public cannot be diverted off the path line while work is taking place, and work and public use will coincide and have to be managed as people cross the site.

· Each site will also have its own intrinsic hazards, for instance:

Ø Materials may be imported by helicopter if there are none on site, or an excavator may be taken on to the site to dig borrow pits.

Ø Sites may have to be accessed by crossing a river, and the associated hazard of the river level rising and blocking retreat.

· Hazardous materials: Patchwork requires very few imported construction materials or dangerous materials to be handled. However, most jobs will include petrol use and fuel storage on site, especially where excavators and other machines are in use. The contractor will have to carry out an assessment in line with the COSHH Regulations, and also manage potential spillage to avoid leaks into the environment.

· Waste removal: List the types of waste that are produced and will need to be taken off site and if any special disposal is required.

Access

· Public use: Identify the line used by the public on site and any sections of this path that will need to be cordoned, or reroute the line the public should take.

· If a helicopter or other machinery is needed, identify the need for a lift area or road closures or other controls.

· Site accommodation: Some sites have existing accommodation, such as bodies, or remote sites may have cabins taken out to them. Accommodation must be identified and a separate assessment made of its condition and suitability. Accommodation remains part of the work site at all times.

· Other restrictions: Work on site may be restricted by stalking activity, or on the West coast by Sabbath observance.

Site rules

· List the type of site rules that the contractor must supply, describing the normal working pattern on site. Standard sets include site rules for training, induction, equipment use, personal protective equipment, and permits to work, accident reporting and emergency response procedures. Identify any other site rules that the contractor should submit with the tender.

· Emergency procedures: identify the location of the nearest hospital, doctor and contact for mountain rescue. Point out to the contractor whether any additional emergency procedures are required.

Of all the information contained in the pre-tender health and safety plan, the identification of significant health and safety hazards and of pedestrian routes and controls across the site will require the most careful judgment. If a hazard is identified as being significant, then the contractor must prepare a risk assessment as part of the tender submission. If the route continues to be used while construction is taking place, which is usually the case for pathwork in Scotland, then a short description of how the public will be safely managed across the site will be required as part of the tender. It is the responsibility of the planning supervisor to identify all significant work or public use hazards. If a hazard is not identified at this stage, it will be omitted from the risk assessment and may not be properly managed. It is good practice to ask a colleague who knows the site to check that you have correctly identified these elements early on in the safety planning process.

Safety method statements

The safety (or tender) method statement is prepared by all contractors who are bidding for the work. For in-house work, or where only one contractor is bidding, it is still necessary to produce a method statement. The method statement builds on the pre-tender plan by elaborating the techniques that will be used to manage the site and the significant safety hazards. There are two parts to the method statement: the larger part is standard information that is held for every contractor and is often best submitted to the client at the beginning of every year as it remains largely unchanged from site to site. The smaller part, but in many ways the more important aspect of the method statement, is a project-specific description of how the team will carry out the contract safely – and this is particular to each site.

The safety method statement is usually quite brief and contains the following key information:

· The team to be used: Their experience in the type of work that is required gained on similar contracts, and details of the team leader and their strengths. The training that the team has received for short health and safety-specific courses, such as first aid, plant operation, radio training, etc., and also vocational qualifications held by the team, including SVQ awards at Level II, III or IV.

· The sequence of operations: The order in which the work will be carried out on the site. There are two main options: The first is to carry out all of the work on one short section of path that is closed while work is taking place and reopened when completed; work then moves to the next short section of path. Alternatively, it may be decided to carry out all of the operations along the entire section of path to be worked, leaving the site open for an extended period of time. This may be necessary if materials are to be flown in by helicopter at the end of the contract, all in one go. The sequence of operations will determine where the focus of safety management is needed. When work takes place one section at a time, there is a danger that the work site will become crowded and most safety effort will be directed at protecting the workforce. When the site is left open and the operation spread out, the greater hazard is to users and visitors to the site, with open trenches and borrow pits, etc., and the emphasis will therefore be on protecting open parts of the sites or rerouting users for the duration of the work.

· Operations breakdown: Identify the specific operations that the workers will carry out to undertake the construction work. The aim is to identify all of the different operations for which a risk assessment will be needed. For the construction of a cross drain the following operations have been identified:

· Marking off the path and controlling public access to site;

Ø Digging the hole – small tools operation; manual handling; safe storage of excavated material on site;

Ø Collecting the building stone – working on steep slopes; power winch operation; lifting and manual handling; constructing the drain – small tools; manual handling and lifting;

Ø Rebuilding the path up to the drain – borrow pit operations; use of power barrows.

Ø Reinstating the site – environmental practice; manual handling.

Breaking down the different tasks in this way identifies the types of work the team will do, for example lifting, winching, working on slopes. Each of these operations then requires a risk assessment to be carried out (see Section 3.4). Break the operations down into the range of tasks, rather than the type of construction (for instance cross drains, aggregate paths, kissing gates, etc.). The hazard arises from the operation that the team member is carrying out, not from what they happen to be building.

The other part of preparing the safety method statement is collecting up-to-date information about the contract team. This is submitted either with the tender or, more usually, in advance, and held on file with clients. The types of information required are:

· A list of team members and their experience;

· The contractor’s history, with details of previous contracts and clients;

· Certificates held by team members, e.g. first aid, plant operation and SVQ certificates;

· Public liability insurance certificate and receipted copy of current premium;

· Health and safety policy for the company;

· A folder of site rules for common operations and conduct on site.

The most important information in the safety method statement is the sequence of operations and the particular operations breakdown for the project in hand. Most effort should go into describing the sequence of work and the risk assessments that are needed to accompany it. It is also good practice for contractors to point out changes to the project that will enable them to work more safely. This may include changing the timing of the work, or using machinery instead of manual construction if experienced operators are in the team who can carry out the work without damaging the site. It is also quite possible that the planning supervisor might have overlooked significant safety hazards on the site, or included risks that the contractor does not think are significant. You should discuss these with the planning supervisor and suggest including them or omitting them from the safety plan.

Issues

The process of looking at the safety issues across the whole site, from the perspective of both the client and the contractor, may throw up issues that are difficult to reconcile with the work. It is often necessary to change the design or the alignment of a path so that it is safe to build and safe for walkers to use. It may be necessary to change the timing to avoid busy periods or poor weather conditions. Mechanized working may be needed to reduce the repetitive, heavy work of excavating borrow pits, and the emphasis may therefore move to minimizing the site impact of using machines, rather than minimizing the people impact of shifting 200 tones of gravel by hand. Some of these issues may require other solutions and imaginative thinking from both sides of the contract partnership. In recent years, work in very remote locations has introduced the use of remote accommodation, where cabins are flown in to accommodate teams on site; these generate their own safety issues as the team is ‘at work’ even when ‘at rest’ in the cabins, and extra evacuation, fire and radio cover is needed.

Avoiding one danger, such as moving large block stone across steep slopes, may give rise to other dangers, such as using an aerial runway system to move the stone. Any new method of working will need careful risk assessment, and a trial must be carried out to assess safe working practice. The new procedures should be written up for future use.

Every site will need its own safety solutions. Risks should be identified in advance rather than coming across them on site; they should be thought through step by step, and the ways in which risks to the workforce can be minimized should be considered. After completion of the work, a design that will enable easy maintenance and safe public use of the site is preferred. By planning ahead, seeking advice, writing down your thoughts and actions, and looking for new solutions, you will demonstrate your competence and fulfil your responsibilities for safe management of outdoor access and construction work.

3.4 | Calculate the cost of preliminaries using following data- Water for the work.

Water required for the project is provided in either of the two ways supply by water tankers if the site is far from a source or pipe bone water. In pricing consideration is given the following:

The proposed project is with a 12months proposed construction period and pipe born water is available nearby. An approximate estimate of the quantity of water required for the project from the same project has been calculated based on the BOQ as follows:

· For concrete work 480liters/m3

· For Block work 350 liters/m2

· Rendering 30 liters/m2

· Workman hut 2000 liters/day

· Site accommodation 20,000liters/day

Based on these allowances total quantity of water should be estimated for the whole project and priced at prevailing water tanker rate for that area. Refer following information in pricing preliminary item for water.

a. Pipe Bone Water: Price will include.

i. Cost of water connection by water board.

ii. Cost of labour and material for laying pipes.

iii. Cost of temporary storage.

iv. Cost of disconnection, removal of pipe and making good defect.

v. Overhead and profit.

b. Cost of Temporary Storage:

i. Cost of labour and materials in constructing surface tank, overhead tank, pipe work and its pumps.

ii. Cost of cleaning and maintaining tanks, water pipes and water pumps.

iii. Cost of removal of water storage and temporary pipe work and making good ground disturbed.

iv. Overheads and profits.

The proposed project is with a 12months proposed construction period and pipe born water is available nearby.

Required Quantity for proposed project, as follows (Assumed)

Sl. No.	Description	Unit	Qty.

1	Concrete work	m3	1,250

2	Block work	m2	10,500

3	Rendering 30 liters/m2	m2	9,854

4	Workman hut	Day	20

5	Site accommodation	Day	32

Based on given following information, total consummation of water for proposed project.

For concrete work 480liters/m3 # 480 x1250 = 600000 Liters

For Block work 350 liters/m2 # 350 x 10500 = 3675000 Liters

Rendering 30 liters/m2 # 30 x 9854 = 295620 Liters

Workman hut 2000 liters/day # 2000 x 20 = 40000 Liters

Site accommodation 20,000liters/day # 20,000 x 32 = 640000 Liters

Total consummation of water for proposed project = 5,250,620 Liters

Sl. No.	Description	Unit	Qty.	Rate in QR	Amount in QR

1	Cost of water connection by water board	LS	1	15,000.00	15,000.00

2.1	Direct labor expenses to install water line. Includes planning, job equipment and material acquisition, area preparation, setup and cleanup.	Hrs	114	180.00	20,466.00

2.2	Cost of supplies that may be required to install water line including: fittings, mounting hardware and connectors.	Line	1	2,500.00	2,500.00

2.3	Job related costs of specialty equipment used for job quality and efficiency, including: pipe cutting and threading, tubing cutter, brazing kit and pipe wrenches..	LS	1	1,450.00	1,450.00

3.1	Disconnect water connection by water board ( Authority charges )	LS	1	10,000.00	10,000.00

3.2	Removal of pipe and making good defect	Hrs	120	180.00	21,600.00

4	Cost of temporary storage.	Gln	1,544,300.00	0.14	216,202.00

					255,618.00

5	Overhead and profit (10%)				25,561.80

					281,179.80

Note : All rate assumed .

A) PIPE BONE WATER:

1. Cost of water connection by water board

Lump Sum Amount for Water connection (Assumed by previous project) - 10,500.00 QR

11. Cost of labour and material for laying pipes

Item	Unit	Quantity	Rate (QR) Assumed	Amount
Water Line Labor	Hrs	113.7	189.02	21,491.57
Direct labor expenses to install water line. Includes planning, job equipment and material acquisition, area preparation, setup and cleanup.
Water Line Job Materials and Supplies	Line	1	2500	2,500.00
Cost of supplies that may be required to install water line including: fittings, mounting hardware and connectors.
Water Line Equipment Allowance	LS	1	1450	1,450.00
Job related costs of specialty equipment used for job quality and efficiency, including: pipe cutting and threading, tubing cutter, brazing kit and pipe wrenches...
Total				25,441.57

B) Cost of Temporary Storage:

Sl. No.	Description	Unit	Qty.	Rate in QR	Amount in QR

	As per the proposed Temporary water tank ( Refer attached Drawings )

1	Cost of labour and materials in constructing surface tank, overhead tank, pipe work and its pumps.

1.1	Labour work for below work for temporary water tank 10 labours for 10days	Hrs.	1,000	15.00	15,000.00
1.2	Coarse Sand for Basement	m3	14	75.00	1,050.00
1.3	Hollow Blocks pieces 150 280 195	Nos	150	2.50	375.00
1.4	Cement	Kg	3,267	2.00	6,534.00
1.5	Fine Sand	m3	4	50.00	213.00
1.6	Coarse Aggregate	m3	5	20.00	100.00
1.7	Reinforcement Bar 6 mm	m	164	8.00	1,312.00
1.8	Reinforcement Bar 9 mm	m	1,452	10.00	14,520.00
1.9	Steel Channels (7.5 cm x 3.75 cm)	m	18	160.00	2,880.00
1.10	Wire Mesh	m2	123	20.00	2,460.00
1.11	GI Pipe m	m	3	350.00	945.00
1.12	Steel Plate	m	1	100.00	100.00
1.13	Pumps	Nos	1	750.00	750.00

2	Cost of cleaning and maintaining tanks, water pipes and water pumps.

	Cost of cleaning and maintaining tanks, water pipes and water pumps. ( Including all cost for 1 month )	Monthly	12	2,400.00	28,800.00


3	Cost of removal of water storage and temporary pipe work and making good ground disturbed.

	Cost of removal of water storage and temporary pipe work and making good ground disturbed. Including Labour and plant and material cost	Hrs.	250	35.00	8,750.00

	Total Cost				83,789.00

	Overhead and profit (10%)				8,378.90

	Total cost with profit				92,167.90

Task-4: Understand the tendering procedures and contractual arrangements

4.1 | Describe the stages of open and selective tendering.

A tender is a submission made by a prospective supplier in response to an invitation to tender. It makes an offer for the supply of goods or services. In construction, the main tender process is generally for the selection of the contractor that will construct the works. In general there are 3 types of tendering methods. Open Tendering, Selective Tendering & Nominal Tendering.

1. Open tendering

Open tendering allows anyone to submit a tender to supply the goods or services that are required. Generally an advert will be placed giving notice that the contract is being tendered, and offering an equal opportunity to any organization to submit a tender.

Open tendering is the preferred competitive public procurement method used for acquiring goods, services and infrastructure works. It is executed in accordance with established procedures set out in the procurement guidelines and detailed in the standard bidding documents. Open tendering is also known as open competitive bidding, open competition or open solicitation, and the procurement notices used to call for bids for these requirements are identified as: Invitation for Bids or Invitation to Tender.

On larger projects, there may then be a pre-qualification process that produces a short-list of suitable suppliers who will be invited to prepare tenders. This sort of pre-qualification process is not the same as selective tendering

Open tendering has been criticized for attracting tenders / expressions of interest from large numbers of suppliers, some of whom may be entirely unsuitable for the contract and as a result it can waste a great deal of time, effort and money. However, open tendering offers the greatest competition and has the advantage of allowing new or emerging suppliers to try to secure work.

Advantages of open tendering

No favourism (everyone can apply for the tender)

High competition in pricing (client will take good prize)

New firms can enter into the market

Increased employment opportunities (new firms comes)

New experience (new technology)

Helps contractors to grow

Contractors get new client

Disadvantages of open tendering

Selected contractor might not suit the project (ex: no experience)

Inexperienced firms can enter into the market

Unknown firms can enter into the markets

Waste of estimating time

High aggregate cost for tender (ex: electricity, transport)

High evaluation time (because we have to check all the documents)

Unrealistic competition

Arbitrations

2. Selective tendering

Selective tendering only allows suppliers to submit tenders by invitation. A pre-selected list of possible suppliers is prepared that are known by their track record to be suitable for a contract of the size, nature and complexity required. Consultants or experienced clients may maintain ‘approved’ lists of prospective suppliers and then regularly review performance to assess whether suppliers should remain on the list.

Selective tendering may be particularly appropriate for specialist or complex contracts, or contracts where there are only a few suitable firms. Selective tendering will tend to be faster than open tendering, and can be seen as less wasteful, as there is no pre-qualification process as part of the tender procedure itself, and only suppliers that are known to be appropriate for the proposed contract are invited to prepare tenders. It can also give clients greater confidence that their requirements will be satisfied.

However, it can exclude smaller suppliers or those trying to establish themselves in a new market, it can reduce the potential for innovation, and it can be seen to introduce bias into tendering as firms may be excluded from approved lists for unknown reasons, because of a lack of awareness, or because of personal preferences. It can also result in prospective suppliers continually contacting clients and consultants to check that they are on the appropriate lists. Selective tendering can be either single stage or two stage. Two-stage tendering is used to allow early appointment of a supplier, prior to the completion of all the information required to enable them to offer a fixed price. In the first stage, a limited appointment is agreed allowing them to begin work and in the second stage a fixed price is negotiated for the contract.

Selective tendering can give clients greater confidence that their requirements will be satisfied and should reduce the wasted effort that can be involved in open tendering. It may be particularly appropriate for specialist or complex contracts, or contracts where there are only a few suitable firms. However, it can exclude smaller suppliers or those trying to establish themselves in a new market.

Advantages:
1) Only qualified and capable contractor submits tenders, hence the quality can be ensured.

2) It reduce the cost of tendering.

3) It minimizes the bulk work of tender documents. So the anylisis of and selection is much faster.

4) It saves lots of valuable time.

Disadvantages:

1) The cost of quation can be higher.

2) It can exclude smaller suppliers or those trying to establish themselves in a new market.

3) It can reduce the potential for innovation.

4) It can be seen to introduce bias intotendering as a firms may be excluded from approved list for unknown reasons. As tenderers are known, selection of cheapest bid is not as high a risk as in an open tender

Conclusion: Open tendering is best for new contractor as it opens the door for them to enter into construction field and gives them chance to do innovation, but it also has potential for disaster. Quality of work cannot be ensured as many unskilled and unexperienced people will submit the question. From this since those who are seeking for quality of work they are more likely to be happy. And on the other hand selective tendering I think Its good for the private construction work who are seeking for quality work without going through much trouble of tendering process. As tendering process also cost money as well as time. Everything in this universe has good side as well as bad side. There is no absolute good or advantage in anything without having any disadvantage. Same things is seen here. For the selective tendering mane new brilliant contractor will not get chance and they will lack behind.

4.2 | Analyze the factors that are used to create ‘select lists’ of contractors.

Contractor selection is really based on the type of owner and the type of project delivery system that is selected. Traditionally, under the design-bid-build system, the contractor is selected on the basis of the lowest qualified bidder. Under this system, the contract documents are prepared by the designer (Architect and/or Engineer) and then issued to several contractors for bidding purposes. Once bids are received and reviewed, the construction contract is awarded to the lowest bid contractor. While private sector owners can (and should!) investigate potential contractors and establish a limited list of contractors from who bids are solicited, public sector owners are, for all practical purposes, at the mercy of any licensed contractor…proving that a licensed contractor is “not qualified” is essentially impossible.

Analyzing the Factor: A selected list of contractors for consideration is highly recommended. Contractor past experience, input from other owners, etc. can provide recommendations for contractors to consider. The state licensing boards can provide lists of contractors in a given geographic area for consideration.

Pre-Selection

Assuming that, under either delivery system option, contractor pre-selection is available to an owner, the first step is to identify and evaluate contractors from whom proposals will be solicited.

Depending on the type of project, the contractor may be a general contractor, mechanical contractor, or electrical contractor. Under North Carolina law, if the project scope includes at least $30,000 of general construction work, a general contractor is required. Therefore, on most projects, all three contractors must be evaluated and selected even if, for convenience, the general contractor retains the mechanical and electrical contractors as subcontractors.

A selected list of contractors for consideration is highly recommended. Your designer, your own past experience, input from other owners, etc. can provide recommendations for contractors to consider. The state licensing boards can provide lists of contractors in a given geographic area for consideration.

Request for Qualifications

From this input, a list of 5-10 contractors of each type should be developed and a request for qualifications (RFQ) issued to each. The RFQ must also contain a basic project description, including proposed design and construction schedule. The following qualification checklist, in the form of questions in the RFQ, should be utilized to investigate and evaluate all contractors considered for the project:

1. How long has your company been in business?

2. What is your bonding capacity?

3. Who is your bonding agent and how long have you done business with them?

4. Provide at least 5 references for projects of similar scope. Include project name, address, type, size, along with the owner and designer names, addresses, phone numbers, and contact persons.

5. For these same projects, provide a list of major subcontractors utilized for each, along with addresses, phone numbers, and contact persons

6. Provide banking references.

7. How many employees work directly for your firm?

8. What is your policy on Change Orders?

9. What is your record for completing projects on time?

10. Which Project Manager and Superintendent will be assigned to this project and what is their construction experience? Provide detailed resumes for each.

11. How many times, in the last five years, has your firm been involved in a dispute with an owner that resulted in litigation, arbitration, and/or mediation?

You will, most probably, receive a response from each contractor contacted. Your next job is begin an interview and selection process.

Reference Checking

No matter how good a contractor looks on paper, follow-up on the information provided with each response to the RFQ:

1. Call each of the references, both owners and designers…you would be amazed at the response of some “references”.

2. Call the state licensing board for that type of contractor to determine if any disciplinary actions are pending or have been taken against the contractor within the last 5 years.

3. Call a representative sample of subcontractors who have worked for this contractor to determine if there are potential management or financial problems at that level.

Interviewing

Based on the RFQ responses, you can "cull" the contractors to the 2-4 you consider best qualified for your project. The next step, with the help of your designer, is to interview each firm of these selected firms…and make sure the proposed Project Manager and Superintendent participate…it is well understood by experienced owners and designers that a project’s success hinges on the performance of the contractor’s Project Manager and Superintendent. (By the way, if you select a contractor and he wants to switch either the Project Manager or Superintendent when you get ready to award a contract, pick a different contractor!) As you interview separate general, mechanical, and electrical contractors, make sure that your selected firms can work together…sometimes there’s “history” that cannot be overcome.

Selecting

From these interviews, "rank" the top 2-3 firms and begin cost and contract negotiations with the one ranked highest on your list. If you fail to reach agreement with that firm, terminate negotiations and move one to the next one on the list.

Conclusion: Globalization is the process of international integration arising from the interchange of world views, products, ideas and other aspects of culture. And the world is undergoing this process at a extreme rate. And Construction is one of its element. And to take active part in this process peoples should qualified. And to get qualified contractor selection is an effective step.

4.3 | Evaluate the different forms of contract used in the construction process.

A construction contract is the warranty that the executed job will receive the specific amount of compensation or how the compensation will be distributed. There are a several types of construction contracts used in the industry, but there are certain types of construction contracts preferred by construction professionals. Construction contract types are usually defined; by the way, the disbursement is going to be made and specifies other specific terms, like duration, quality, specifications and several other items.

Evaluating Different Forms of Contracts.

1) JCT (The Joint Contracts Tribunal)

The Joint Contracts Tribunal, also known as the JCT, produces standard forms of contract for construction, guidance notes and other standard documentation for use in the construction industry. From its establishment in 1931, JCT has expanded the number of contributing organisations. Following recommendations in the 1994 Latham Report, the current operational structure comprises 7 members who approve and authorise publications. They were listed by the JCT in 2014 as the British Property Federation, the Contractors Legal Grp Limited, the Local Government Association, the National Specialist Contractors Council, the Royal Institute of British Architects, the Royal Institution of Chartered Surveyors and the Scottish Building Contract Committee.[1] In 1998 the JCT became a limited company.

Suite of Standard Forms

Suite of Standard Forms means a group of all the mutually consistent documents necessary to operate a particular method of procurement and produced to enable them to be used together, including the following where applicable:

• Consultant agreements

• A main contract between the employer and the main contractor;

• Sub-contracts between the main contractor and its subcontractors (both for sub-contractors selected by the employer and for other sub-contractors);

• A standard form of sub-sub-contract between a subcontractor and such sub-contractor's sub-sub-contractors;

• A design agreement between an employer and a specialist designer;

• Forms of tender for issue by an employer to prospective main contractors and for issue by a main contractor to prospective subcontractors and for issue by asubcontractor to prospective sub-sub-contractors;

• A form of contract for the supply of goods;

• Forms of bond (including performance bonds) and collateral warranties.

• The Construction Industry Model Arbitration Rules, adapted from those of the Society of Construction Arbitrators

Main Forms

JCT substantially revises and rewrites the family of forms every decade. The most recent suite, replacing the 1998 version, is the 2005 suite, as is commonly referred to as JCT 05. There are now, however, 2009 amendments published. The 2011 versions replaced 2009 amendments for all contracts signed after October 1, 2011. They are considered to be the most popular construction contracts in use in the UK.[11]

Main Contracts

1. Major Project Form (MP11)

2. Standard Form of Building Contract (SBC11)

3. Intermediate Form of Building Contract (IC11)

4. Minor Works Agreement (MW11)

5. Management Contract (MC11)

6. Design and Build Contract (DB11)

7. Construction Management Documentation

In 2007 JCT published the Constructing Excellence Contract (JCT/CE), a contract designed to support collaborative working, as advocated by the Latham Report, and can trace its roots back to the "collaborative contract" published in 2003 by BE, a joint venture between the Reading Construction Forum and the Design and Build Foundation (and now part of Constructing Excellence)

Smaller project contracts

Traditional JCT contracts were seen as too detailed and difficult to use in smaller domestic projects so JCT launched a consumer friendly range of contracts called the "Building Contract for the Home Owner".

• Building Contract for Home Owner/Occupier (where client deals directly with the builder) (HOB)

• Building Contract for Home Owner/Occupier (who has appointed a consultant) (HOC)

• Contract for Home Repairs and Maintenance (HO/RMI)

Key features

The JCT contracts avoid up-front payments from payers to payees. Instead, the payee invoices the payer once work has been certified as completed by an independent third party, the Contract Administrator (often an architect or surveyor). Often interim certificates are issued where itemised components of the work have been completed, or a verifiable percentage is complete. In the 2009 amendments, the payer or payee can issue the certificate if the Contractor Administrator fails to do so.

The JCT encourages Retention of an agreed percentage of the contract sum until Practical Completion and then a percentage for a period after Final Completion. This avoids payment in advance for such things as minor defects or snagging which need to addressed at the end of the project or come to light after the project is complete. So the invoice at each point is for a percentage of the value of the work certified complete. The payer can deduct an amount; however, under the 2009 amendments the method for calculating the new amount must be stated.

The JCT encourages up front agreement of Liquidated and Ascertained Damages (LAD) as an estimate of the payer's weekly losses if the payee fails to reach Practical Completion by the Contractual Completion Date. If delays are for reasons beyond the contractor's control, the contractor can request an Extension of Time: if the Contract Administrator allows this, it in effect extends the period before which the contractor is liable to pay the LAD.

The JCT introduced the concept of Determination, whereby the contract can be terminated for suspension of works, failure to proceed regularly and diligently, failure to remove defective works, failure to execute works in accordance with the contract, and bankruptcy of the contractor. If one party has ceased to perform in the contract (e.g. the contractor has gone past the Contractual Completion Date and has no plan to complete the contract), Determination enables the other party to end their obligations (e.g. to pay the contractor to finish the project).[14] This is in addition to the Common Law remedy of Repudiation.

Reference is made to adjudication as a quick way of resolving disputes which the parties cannot resolve between them. Arbitration or litigation, depending on the preferences of the parties, is also available for the settlement of disputes, but these are never appeals against the decision of an adjudicator; they are the consideration of the dispute or difference as if no decision had been made by an adjudicator.[15] If arbitration is chosen, then the reference is conducted under JCT the amended version of the Construction Industry Model Arbitration Rules published by the Society of Construction Arbitrators

2) NEC Engineering and Construction Contract

The New Engineering Contract (NEC), or NEC Engineering and Construction Contract, is a formalized system created by the Institution of Civil Engineers that guides the drafting of documents on civil engineering and construction projects for the purpose of obtaining tenders, awarding and administering contracts.[1][2] As such they legally define the responsibilities and duties of Employers (who commission work) and Contractors (who carry out work) in the Works Information. The contract consists of two key parts the Contract Data part one (Data provided by the Employer) and Contract Data part two (Data provided by the Contractor). Several approaches are included making it a family of options. It is used in the UK and internationally in countries including New Zealand, Australia, Hong Kong and South Africa.[3]

Characteristics

The NEC is a family of standard contracts, each of which has these characteristics:

Its use stimulates good management of the relationship between the two parties to the contract and, hence, of the work included in the contract.
It can be used in a wide variety of commercial situations, for a wide variety of types of work and in any location.
It is a clear and simple document - using language and a structure which are straightforward and easily understood.

The NEC3 complies fully with the Achieving Excellence in Construction (AEC) principles. The Efficiency & Reform Group of The UK Cabinet Office recommends the use of NEC3 by public sector construction procurers on their construction projects.

The NEC contracts now form a suite of contracts, with NEC being the brand name for the "umbrella" of contracts. When it was first launched in 1993, it was simply the "New Engineering Contract". This specific contract has been renamed the "Engineering and Construction Contract" which is the main contract used for any construction based project. It now sits alongside a number of other contracts that together should mean that the NEC suite is suitable for what ever stage of a lifecycle the project is at and for any party within a project. The contracts available within the suite are, but not limited to:

Engineering and Construction Contract (ECC):

Suitable for any construction based contract between an Employer and a Contractor. It is intended to be suitable for any sector of the industry, including civil, building, nuclear, oil & gas, etc. Within the ECC contract there are six family level options of which the Employer will choose what he deems to be the most suitable and give him the best option/value for money on that project:

Option A: Priced contract with activity schedule
Option B: Priced contract with bill of quantities
Option C: Target contract with activity schedule
Option D: Target contract with bill of quantities
Option E: Cost-reimbursable contract
Option F: Management contract

These options offer a framework for tender and contract clauses that differ primarily in regard to the mechanisms by which the contractor is paid and how risk is allocated/motivated to control costs.

The core clauses (of the main option listed above) are used in conjunction with the secondary options and the additional conditions of contract. The Efficiency and Reform group of The Cabinet Office in the UK (formerly the OGC) has published generic public sector Z-clauses for the use with NEC3 contracts.

The clauses of these options have been be adapt HELP MEed for simpler less risky work (short contracts), for use as subcontracts, and for professional services such as design as below.

The Engineering and Construction Subcontract Contract (ECS)

Very similar in detail and complexity of contractual requirements to the ECC contract above, but allows the contractor to sub-let the project to a subcontractor imposing most of the clauses that he has within his headline contract. There is very little difference between the ECC and the ECS, other than the names of the parties are changed (contractor and subcontractor)and some of the timescales for contractual responses are altered to take into account the timescales required in the ECC contract.

The Engineering and Construction Short Contract (ECSC)

This is an abbreviated version of the ECC contract and most suitable when the contract is considered "low risk" (not necessarily low value) on a project with little change expected. This contract is still between the employer and contractor but does not use all of the processes of the ECC making it simpler and easier to manage and administer.

The Engineering and Construction Short Subcontract (ECSS)

Allows the contractor to sub-let a simpler lower risk contract down the line to a subcontractor. It is back-to-back with the ECSC but is frequently used as subcontract when the main contract is under the ECS.

The Professional Services Contract (PSC)

This contract is for anyone providing a service, rather than doing any physical construction works. Designers are the most obvious party that fit into this category. Whilst they are producing a design for an employer or contractor, they would sign up and follow the clauses within the PSC. Most of the clauses within this contract are the same or similar to those in the main ECC contract, so that all contractors, designers and subcontractors have pretty much the same obligations and processes to follow as each other.

The Professional Services Short Contract (PSSC)

This was added to the family in April 2013 and was co-developed with the Association for Project Management. It is for simpler less complex assignments than the PSC, such as the appointment of small team for managing an ECC contract on the Employer's behalf. E.g. the Project Manager and Supervisor. It is frequently used as a subcontract to the PSC for design work.

Framework Contract (FC)

Parties enter into a "framework" of which work packages will then be let during the life of that framework. Any individual projects will then be awarded using one of the other contracts within the suite, meaning that the parties follow the headline clauses within the framework contract (which is a fairly slim contract) and then the individual clauses within the chosen contract for that package. Different work packages can be let using different contracts during the life of the framework.

Term Service Contract (TSC)

For parties on a project that is operational or maintenance based, e.g. maintaining highway signage, where the contract is to ensure that a certain standard is maintained. This contract is not generally used for constructing new works, but can include some amount of betterment. There is also a "Term Service Short Contract" where the project is a relatively low risk project and/or the work is primarily re-active. It is an abbreviated version of the main TSC.

Supply Contract/Short Supply Contract (SC/SSC)

These contracts were launched in 2010. This is for a supplier of supplies or goods to a project, and puts extra contractual requirements on them during their procurement/manufacture period. The Supply Contract is for big bespoke items i.e. designed and manufactured specifically for that contract, with the Short Supply Contract potentially being for more run of the mill / commoditised items on a project. Neither of these contracts cover working on a Site. I.e. as written they are not 'supply and install' contracts.

Adjudicator's Contract (AC)

If there is a dispute between the parties on a project then the Adjudicator will follow the clauses within this contract in order to come to a decision.

Guidance Notes and Flowcharts

For each of the different contracts listed above each comes with its own set of guidance notes and flowcharts which should aid understanding of the intent of the drafted clauses. The guidance notes expand on each clause to give extra substance and intent of the original drafters as to how a clause should be understood and interpreted. The flowcharts then map out each of the main processes within each contract and demonstrate how it should operate and what to do next if a party has or has not carried out the next contractual action.

3) FIDIC (Fédération Internationale Des Ingénieurs-Conseils)

The International Federation of Consulting Engineers (commonly known as FIDIC, acronym for its French name Fédération Internationale Des Ingénieurs-Conseils is an international standards organization for the construction industry, best known for the FIDIC family of contract templates. The fact that the organization has a French title bear’s testimony to its foundation in 1915 by three countries each wholly or partly francophone. The founding member countries of the FIDIC were Belgium, France and Switzerland.

Services

Located at the World Trade Center in Geneva, Switzerland, FIDIC aims to represent globally the consulting engineering industry by promoting the business interests of firms supplying technology-based intellectual services for the built and natural environment. Run mostly by volunteers, FIDIC is well known in the consulting engineering industry for its work in defining Conditions of Contract for the Construction Industry worldwide.

Companies and organizations belonging to FIDIC national member associations are encouraged to announce themselves as FIDIC members and use the FIDIC logo. The use of the logo is strictly controlled, and all FIDIC products and services are protected by the FIDIC trademark.

History

There were 59 participants at an inaugural meeting during the World Exhibition in Ghent, Belgium, in July 1913, to discuss the possibility of forming a global federation of consulting engineers. Of the participants, 19 were official delegates from Belgium, Denmark, France, Germany, The Netherlands, Switzerland and the USA, with the remainder coming from Austria/Hungary, Canada, Russia and the UK. The meeting was a success in that it led to FIDIC's formal constitution on 22 July 1913. Some countries, however, only maintained provisional links during the first few years, so the real founders of FIDIC were Belgium, France and Switzerland. FIDIC led a difficult life until the late 1940s with a changing number of members, and all members based in Europe. In 1959 they were joined by Australia, Canada, South Africa and USA to make FIDIC truly international. The first member associations from the developing world joined in 1965 (Central Africa, now Malawi, Zambia and Zimbabwe) and in 1967 (Colombia).

Activities

FIDIC organises the World Consulting Engineering Conference, seminars and training courses. The FIDIC training manual Guide to Practice - the business of a professional services firm is well known throughout the profession of consulting engineering. FIDIC also runs a bookshop and publishes international contracts and business practice documents which are used as guides and templates the world over.

FIDIC is best known for its range of contracts that includes the: Dredgers Contract; Short Form of Contract; Construction Contract; Plant & DB Contract; DBO Contract; and EPC/Turnkey Contract. Details are available in the FIDIC Bookshop. FIDIC also publishes the Client/Consultant Model Services Agreement together with the Sub-Consultancy Agreement and the Joint Venture Agreement. FIDIC publishes the MDB Harmonised Edition of the Construction Contract that is used by Multilateral Development Banks including the World Bank for their projects.

GC Works contracts

The suite of standard Government Conditions of contract, GC Works, are still available, but they are no longer being updated by the government who are moving to the New Engineering Contracts, now in their third edition NEC3.

The GC Works contracts were created primarily for government projects, but could be used in the private sector. They were published by the Stationery Office for the Property Advisors for the Civil Estate (PACE).

The suite of contracts comprised:

GC Works 1: Without quantities.
GC Works 1: With quantities.
GC Works 1: Single-stage design and build.
GC Works 1: Model forms and commentary.
GC Works 1: Two-stage design and build.
GC Works 1: Construction management trade contract with quantities.
GC Works 1: Construction management trade contract without quantities.
GC Works 2: Minor works.
GC Works 3: Contract for mechanical and electrical engineering works.
GC Works 4: Contract for building, small works.

In addition, there were a range of supporting documents such as; sub-contracts, forms of tender,invitation to tender, performance bonds, parent company guarantees, retention bonds, notices and certificates.

Conclution : In common law legal systems, a contract (or informally known as an agreement in some jurisdictions) is an agreement having a lawful object entered into voluntarily by two or more parties, each of whom intends to create one or more legal obligations between them. The elements of a contract are "offer" and "acceptance" by "competent persons" having legal capacity who exchange "consideration" to create "mutuality of obligation. Every country has their own way of doings things. Every where the same contract process is not suitable nor accepted.