Tender assessment and contract award
The method for submitting tenders in the desired format should have been clearly set out in the instruction to tenderers documentation, issued at the start of the tender submission process. Details given will include time, date and location for tenders to be sent.
It should also name the person to whom tender returns should be addressed. It is common for clients to request hard copies of tender returns – even when using online tendering – for formal opening and subsequent reporting purposes.
Once the due date and time has passed, no other tender returns should be considered. Late tenders are not normally considered for public procurement projects; private clients should be advised which tenders were late and it is their decision to open or exclude, not the decision of their professional advisors.
Each tender is opened, and the general information noted by the responsible professional. This includes:
- The tender price
- The proposed programme
- Any key comments/exclusions
- Any alternative tender offers
- Confirmation that all documents have been submitted (or not)
This record should be countersigned by another professional or client representative. The lowest tenderer should then be contacted and asked to provide a priced document in support of the tender if this was not required to be submitted with it.
The project cost consultant then examines in detail the priced document in support of the lowest tender to determine that any amendments notified during the tender period have been properly included, and also to detect any errors in arriving at the tender sum. Errors found are dealt with in the manner prescribed in the instructions to tenderers.
The two most frequently adopted methods for dealing with mathematical errors are as follows:
The tenderer is informed of the details of the errors and then given an opportunity of confirming or withdrawing their tender. If the tender is withdrawn, the priced documents of the next lowest or next best value tenderer should be examined; if there are errors or discrepancies in them, this tenderer also (and any subsequent tenderer in turn) should be given a similar opportunity to confirm or withdraw.
Where the tenderer confirms the tender, an endorsement should be added to the priced tender documents prior to acceptance, indicating that all rates or prices in the tender documents (but excluding preliminary items, contingencies, prime cost sums and provisional sums, where included) are to be considered as reduced or increased in the same proportion as the corrected total of priced items, as it exceeds or falls short of the tender price. The endorsement needs to be signed by both parties.
The tenderer is given an opportunity of confirming the offer or of amending it to correct genuine errors. Should the tender be amended and the revised tender is no longer the lowest or best value tender, the offer that becomes the lowest or best value should be examined.
If the tenderer elects not to amend the offer, an endorsement will be required as previously described. If the tenderer does amend the tender figure, and possibly certain rates in the documents, these will need to be confirmed in a clear and unambiguous way, either by amending the original bill or by letter – either way, it will then become a contract document.
If tenders are to be assessed on a best value basis rather than lowest price, the evaluation of tenders against non-price criteria should be completed independently of the examination of the priced documents. Where criteria have been established, the project lead must abide by them and by any particular weighting or order of importance attributed to them in the relevant documents.
The project lead should now have all the information required to make a recommendation to the client on which tender to accept – this is usually conveyed in a formal tender report, outlining all bids received, the contracting organisations, the rationale behind selection and a recommendation.
Once the tender report has been issued and accepted by the client, all tenderers should be notified of the decision. Some clients will include a cooling-off period prior to formal acceptance and public procurement rules will also dictate times for unsuccessful tenderers to raise objections.
The last stage in the tender process is the formal awarding and signing of the contract between the employer and the selected contractor.
Where the selection of the winning tenderer is not by lowest price, the client’s team should have established a set of criteria to assess this by a more wide-ranging ‘best value’ or most economically advantageous tender (MEAT) approach.
Identify four items that you would use to assess best value in a submitted tender for Kaito’s hotel. What weighting would you give to each?
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