Bidding and Contract Award PDF

Bidding and Contract Award The term "bid" is an offer made by an individual or corporation to purchase an asset. Bids may also be made by companies that compete for project contracts. Bids are used; Auctions Stock Market Business Contracts Bidding and Contract Award A bidding award is the proc...

Bidding and Contract Award The term "bid" is an offer made by an individual or corporation to purchase an asset. Bids may also be made by companies that compete for project contracts. Bids are used; Auctions Stock Market Business Contracts Bidding and Contract Award A bidding award is the process of granting a contract to a bidder for goods, services, or construction work. The award is made based on the terms and conditions of the bidding documents. Awarding a contract refers to the process of notifying a tenderer that they have been formally chosen as the supplier for a particular contract upon acceptance of their bid or proposal. Bidding and Contract Award The bidding and contract award procedure in the Philippines involves several steps. Preparation of Project Procurement Management Plan (PPMP) Pre-procurement conference Advertisement / Posting Application for Eligibility / Expression of Interest Bidding and Contract Award Procedure Eligibility evaluation, including notification of eligible and ineligible bidders Issuance of bid documents Site inspection Pre-bid conference Submission / Opening of bids Bidding and Contract Award Procedure Bid Evaluation Post-qualification BAC Deliberation and Approval of Resolution of Award Contract Preparation and Approval Issuance of Notice to Proceed CONSTRUCTION CONTRACT A "contract" is basically an agreement between two parties creating a legal obligation for both of them to perform specific acts. In order for the contract to be enforceable, each party must exchange something of value. CONTRACT ELEMENTS Those agreements are enforceable by law which are made by the free consent of parties competent to contract, for a lawful consideration and with a lawful object and are not expressly declared to be void. This is subject to any special law according to which contract should be in writing and attested by witnesses. The following are the essential elements of a contract: a. Offer b. Acceptance of offer c. Consideration d. Legality TYPES OF CONTRACTS Contracts for the execution of civil engineering works are of following types: LUMPSUM CONTRACT ITEM RATE CONTRACT LUMPSUM AND SCHEDULED CONTRACT COST PLUS FIXED FEE CONTRACT COST PLUS PERCENTAGE OF COST CONTRACT SPECIAL CONTRACTS TYPES OF CONTRACTS 1. LUMP SUM (FIXED CONTRACT) In this type of contract, the contractor offers to do the whole work as shown in drawings and described by specifications, for a total stipulated sum of money. There are no individual rates quoted, thus it becomes difficult to make adjustments in the contract value if any changes are to be made in the work later on. The schedule of 3 different items of work is not provided and the contractor has to complete the work as per drawings and specifications for the agreed lump sum amount. TYPES OF CONTRACTS 1. ITEM RATE CONTRACT Also called a schedule contract, in this contract, the contractor undertakes the execution of work on an item rate basis. The amount to be received by the contractor, depends upon the quantities of various items of work actually executed. The payment to the contractor is made on the basis of detailed measurements of different items of work actually done by him. TYPES OF CONTRACTS 3. LUMPSUM AND SCHEDULED CONTRACT similar to the lumpsum contract except the schedule of rates is also included in the contract agreement. In this type of contract, the contractor offers to do a particular work at a fixed sum within a specified time as per plans and detailed specifications. The schedule of rates for various items is provided which regulates the extra amount to be paid or deducted for any additions or deletions made during the progress of work. Measurements of different items of original work are not required but extra items are required to be measured for payment. The original work shall however be checked and compared with the drawings and specifications. TYPES OF CONTRACTS 4. COST PLUS FIXED FEE CONTRACT desirable when the scope and nature of the work can atleast be broadly defined. The amount of fee is determined as a plump sum from a consideration of the scope of work, its approximate cost, nature of work, estimated time of construction, manpower and equipment requirements etc. In order to negotiate such a type of contract, it is essential that the scope and some general details of the work are defined. The contractor in this type of contract is selected on the basis of merit rather than the fee alone. In case of cost plus percentage contract, the contractor has a tendency to increase his profit by increasing the cost of work. TYPES OF CONTRACTS 5. COST PLUS PERCENTAGE OF COST CONTRACT In this type of contract, instead of awarding the work on lumpsum or item rate basis, it is given on certain percentage over the actual cost of construction. The actual cost of construction is reported by the contractor and is paid to him by the owner together with a certain percentage as agreed earlier. The contractor agrees to do the work in accordance with the drawings, specifications and other conditions of contract. In this type of contract, proper control has to be exercised by the owner in the purchase of materials and in arranging labour. TYPES OF CONTRACTS 6. SPECIAL CONTRACTS TYPES OF CONTRACTS SPECIAL CONTRACTS a. Turn-key Contract - an integrated contract in which all works pertaining to various disciplines such as civil, electrical, mechanical etc. are in the hands of a single contractor called the main contractor. The main contractor can sublet the contact to subcontractors who are specialists in their respective fields. b. Package Contract- two or more related jobs, each of which could form a separate contract are combined in a single contract. In the field of civil engineering, generally, design and development are combined with construction and supply or maintenance. TYPES OF CONTRACTS SPECIAL CONTRACTS c. Negotiated Contract - negotiation across the table takes place between representatives of the owner and the main contractor for project cost and other conditions of contract. Detailed projects specifications are arrived at by discussions between the owner and the main contractor and consultant. d. Continuing Contract - new or additional work is awarded to the contractor on the basis of agreed terms and conditions of an existing contract. Such contracts do not require retendering and hence can save time and money e. Running Contract Such contracts provide goods and services at specified intervals or as and when required by the owner. The contract price is not fixed and payment is based on goods supplied and services rendered as specified in the contract documents.