Tender Assigment

7/31/2019 Tender Assigment

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ACKNOWLEDGEMENT

First of all I wish to express my sincere gratitude to Almighty God for giving me the courageand determination to complete this assignment.

Also I would like to express my utmost gratitude to my lecturerMR.N.T.K.LOKULIYANA he

gave me excellent guideline to complete this assignment and assess my all performance with

his busy schedule

Finally I like to thank to my class friends to give me a good corporation to complete this

assignment


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CONTENTS

ACKNOWLEDGEMENT....01

CONTENTS.02

TASK -01

1.1... .........................03-07

1.2....08 -09

1.310

TASK -02

2.1.11

2.2 . ...12

2.3C/A :01-C/A:03

TASK -03

3.1....13 -14

3.2 C/A:04-C/A:17

TASK -04

4.1. 15

4.2. 16

4.317 -18

TASK -05

5.1 ....19-22

5.224 -25

5.3 C/A:18-C/A:22

CONCLUSION27

REFERENCES.28


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TASK -01

DEMONSTRATE KNOWLEDGE AND UNDERSTANDING OF THE PRINCIPLES OF TENDER

PRICING

1.1. STATE AND DESCRIBE THE STEPS OF TENDER PRICING PROCESS

1. DECISION TO TENDER:

The tender documents arrive and the estimator records all relevant information such as:

The time allowed for preparing the tender Drawings available The approximate value and extent of the project The client, Architect, Q.S and other consultant Value of main contractors own work Project Details e.g. phased work, conditions of contract, access to site, working conditions. Firm price or fluctuating price tender required Current workload and timetable for project

After reviewing the above information, management must decide whether to tender for the project ordecline the invitation. If it is decided not to submit a price, the tender documents should be returnedimmediately to the architect/supervising officer. If it is decided that a tender should be submitted, thecontractor move to the next stage

2. INSPECTION OF TENDER DOCUMENTS

The arrival of the tender documents within a contractors office invariably causes a stir; everyone is

eager to have a look. The documents should be passed directly to the estimating department. The

Code of Estimating Practice (COEP) states that they should be inspected by the person who will be

responsible for preparing the estimate. This should be the head of department the individual who

takes the responsibility for the estimate not the estimator who will later be appointed to deal with the

task. It is most important that the early inspection is carried out by a person experienced in current

procedures and documentation, and capable in decision making and effective in communicating with

others.

The documents should first be checked that they accord with those listed in the letter of invitation,

normally:

1. Two copies of the bills of quantities.

2. Two copies of the general arrangement drawings.

3. Two copies of the form of tender.4. Addressed envelope for the return of tender (and priced bills if applicable).

If the documentation is not complete the fact should be reported immediately by telephone. If reference

is made in the letter that certain sections of the bills will follow shortly and the tendering time is as

stated in the preliminary invitation, an appeal should be made for a revision of time to comply with the

CPSSST.

This clearly states that the time for tendering should be calculated from the date of issue of the last

section.


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3. COLLECTION OF INFORMATION

The time allowed for preparing a tender is always limited; the estimator must plan the program very

carefully. The work which has to be undertaken in a typical 4 week tender period comprises:

Dispatching enquires

Visit consultants offices

Visit the site

Receipt of quotations and examinations

The mechanical process of pricing the tender documentation

Meetings with plant manager, contracts manager etc to determine a preliminary program,

construction methods and likely plant requirements

4. ESTIMATE TIMETABLE

The estimator is responsible for preparing the estimating timetable showing the key dates for

him and the other members of the estimating team.

For most tenders there is an absolute requirement to meet the submission date.

The estimator must program the activities needed to produce a tender to show how the

deadline can be met and explain to other members of the team their part in the plan.

Each project is different, and some dates such as those for the return of quotations require firm

action to maintain the program dates.

Time allowed for tendering is usually limited by the clients need to start a project quickly.

If the design stage has been delayed it is often the tender stage that is shortened.

Flexibility is needed to concentrate on the critical parts on the estimate preparation.

The estimator can press on to complete his work with a day or so to spare for reconciling and

checking the estimate.

Much of the early part of the tender period is given over to the dispatch of enquiries to suppliers

and sub-contractors and setting up job files when a computer system is used.

SAMPLE ESTIMATE TIMETABLE


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5. ENQUIRIES AND QUOTATIONS

SUPPLIERS

Enquires should state:

The specification of the material

The quantity required

The anticipated delivery dates The terms upon which the price is required

The date by which the quotation is required

The address of the site and access details

Period for which the quotation is open for acceptance

SUB-CONTRACTORS

Photo copies of the relevant parts of the bill of quantities, specifications and if possible copies

of drawings should be sent out to perspective sub-contractors. Enquires should state clearly:

The items to be priced The terms of the main contract

The period for which the quotation is open for acceptance

The plant, materials, attendance etc to be provided by the main contractor

Anticipated commencement and completion dates

The form of contract and details from the appendix

The terms of payment

Date by which the quotation is to be submitted

Address and details of the site


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6. VISITS TO SITE

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:

The position of the site in relation to roads etc

Names of local and statutory authorities

Details of site/ground conditions, spot items etc

Site access, egress and possible site layouts Facilities for disposal of surplus excavated materials etc

7. VISITS TO CONSULTANTS OFFICES

It may be that only drawings showing plans and elevations will be sent out with the tender documentsand that further details and working drawings can be examined at the consultants offices e.g. theestimator may require further details of manufactured joinery, steelwork joinery fittings etc, beforethese sections can be priced accurately

8. RECEIPT OF QUOTATIONS

Prices received from sub-contractors and suppliers are examined for sufficiency, terms etc

9. PLANNING AND MID TENDER REVIEW

The project is discussed with other managers to determine a preliminary program, construction

methods, sequence of work, site layouts and what other plant, services, labour and site staff are

required. It must be decided whether:

All labour can be obtained locally or will it be necessary to recruit for the project.

Sufficient plant is already owned or is it necessary to purchase/hire additional items.

It would be desirable to sub-let any further work. The preliminary program should also be

prepared containing the following information:

Contract starting and completion dates

Any work to be done in stages

Work to be sub-let by main contractor

Work to be done by nominated sub-contractors (if JCT 98 forms)


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10. PREPARATION OF THE ESTIMATE

It can be divided into 4 stages:

1. The establishment of all-in rates for key items i.e. labour, gang costs, plant costs etc.

2. The selection of domestic sub-contractors and suppliers

3. The use of these all-in rates together with costs per unit for materials to calculate unit rates for each

item in the bill4. The pricing of the preliminaries and project overheads

TENDER ADJUDICATION

Tender adjudication takes place after the bills of quantities are priced and usually involves the senior

management of the contracting organization who will, among other matters, decide the level of profit

required, sometimes referred to as the margin. This figure, together with a percentage to cover

overheads, will be added to the rates calculated by the estimator. The level of profit is kept a closely

guarded secret

Having taken the decision to submit a tender the contractor will take delivery of the tender documentsand proceed to prepare the bid; this will involve:

Carefully examining the drawings and bills of quantities for accuracy and then preparing a timetablefor the preparation of the bid

Visiting the site, particularly appropriate for alteration work, or where the site has restricted access orworking

Preparing any method statements; method statements are an analysis and description of how thecontractor proposes to carry out particularly complicated parts of the works.

11. FINAL REVIEWThe consideration of the estimate to produce a tender is the responsibility of management .The

estimator and other senior staff will prepare reports for consideration by management who will consider

the following items before determining the tender figure;

Project reports

Conditions of contract

Contractual and construction risks

Terms of the quotations from sub-contractors

Capital required for the project

Technical and management staff required

Current workload Market Conditions

Competition

Reputations of client, consultants and area

Following evaluation of the alternatives, risk and scope for profitability the mark up is determined andthe actual tender figures calculated. The decision being made within the Frame work of company policy

.A record of all tenders should be kept together will the results (if known) for future reference


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1.2. LIST THE FACTORS TO BE CONSIDERED IN PRICING A TENDER

Market Condition:The volumes of work in progress in the area at a given point in time affect constructioncost. When the market is burying with many project, tender price list are generally high.Most consultants are busy and competition is not keen. However during ausle times when

there are few projects, contractors are anxious to out bid themselves so as to stay inbusiness, so construction cost tends to be lower.

Availability of Materials:When required materials are readily available in an area where a project is to be executed,materials will be cheaper than where they are not so available. Generally, materials arecheaper where they are produced e.g. if you can buy cement directly from Colombo, theprice will be a lot cheaper than in Jaffna because of transportation and profit margins ofmiddlemen and so on. Imported materials for similar reasons are more expensive thanlocally produced materials.

Availability of Labor:

Where a certain type of labor is not readily available in the area where a project is to be

constructed, it may be necessary to import from an area where such labour is available. Some

inducement may have to be offered before such labour will move from its base such as

transportation, accommodation, inconveniences allowances etc. these add to the cost of

construction.

Transportation:

The farther a site is from town, the more expensive will be the construction cost

Location:

The standard of living in an area affects the cost of construction. People are willing to payhigher prices for construction in places

Location of Site: -

The particular location of the site can have significant effect on cost. Remote site may require

additional cost for the provision or access roads and temporary services or the provision of

additional security measures. Also, a site in a congested or restricted area also gives rise to

major problems such as delivery & storage of materials and components, protection of

adjoining buildings and the public, restriction on the use of mechanical plants and so on, all

these will increase the cost of construction.

Time Consideration: -

For certain reasons, a project may need to be completed in a very short time; this tends to push

up construction cost. Laborers may be required to work overtime and overtime rates are usually

higher than normal rates. Incentives scheme may have to be introduced to increase labor

productivity. Closure supervision is necessary as mistake must be avoided, there may be

time to apply remedial action


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Site Condition:

May affect the construction cost of a particular building. The nature of ground may necessitate

more complex form of foundation. The ground water level when close to surface will involve

costly water pumping operation. A wet site may involve rising temporary sheds and offices

above ground level and they involve more costly temporary roads. Steeply sloping site may

involve major cost in cutting and filling requirements, existence of buried pipes and cables may

involve major cost to re-root such.

Total Height of Building:

The higher a building is, the longer it takes and more difficult it is to get the point of execution of

works. It is also more difficult to work at such height. Labor charges for 30working at great

height are higher than normal height; there is also the cost of providing additional safety

measures and insurance. Also, the need for special scaffolding, hoist, tower crane, elevators

etc. will tend to increase the cost of very tall building over the cost of building requiring

the same quantities at ground level.

Class of Contractors:There are various types of contractors in the market. These gives rise to differentclassification.

Small contractors comprises of one man board of directors. They usually carry littlegeneral overhead and keep very few permanent staff

Medium contractors usually have a board of at least two but not more than fivedirectors they employ a few more permanent staff, have a reasonable office andpossess some equipment and official cars.

Large contractors have a lot of times publicly owned with many share holders havingat least six members on their board of directors, fleet of cars and equipments, largeoffice space and a lot of staffs of various discipline. Generally, the larger the firm,the higher their cost. Also, the level of profit expected by the share holder of largerfirms is a lot more than that required by the smaller contractors. The rates for thesmall contractors therefore tends to be much lower than for large contractors

Types of Consultants: Architect: - Some architects are very difficult to work with, their initial designs are not

detailed and they rely a lot on instructions on site. Many variations occur and delaysare frequent. These will add to the cost of construction. The same applies toEngineers and other designers. Contractors are therefore known to increase theirprices by a certain percentage when it is known that they would be working withparticular consultant.

Types of Tendering:Open tendering generally brings lower prices than selective tendering, and this in turnresult in lower price than negotiated tendering which brings the highest price of fall.

REFERENCE: UNESCO-NIGERIA TECHNICAL & VOCATIONAL EDUCATION

REVITALISATION PROJECT-PHASE IINATIONAL DIPLOMA IN QUANTITY SURVEYING

TENDERING AND ESTIMATING II

COURSE CODE: QUS 210


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1.3. LIST THE SOURCES AND NATURE OF INFORMATION REQUIRED FOR COST ESTIMATING

1. Drawings :

dimensions (length, width ,height )

shape of component of the building

elevations

2. Specifications :

quality of workmanship

Way of construction

Additional works related with work item

3. Preambles :

quality of material

way of handling materials

4. BOQ :

Description of work

Unit of work item

Quantity of work item

5. Suppliers quotation :

Prices of materials

Quality of materials

Discounts

6. Sub-contractor quotation :

Prices of work item

Discount

7. Site visit :

Condition of site

Nature of soil

Shape of land

8. Previous experience :

Labor cost

9. Previous document:

Additional related work

10. BSR

Standard prices for work items


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Task: 02

PREPARE STANDARD RATES FOR LABOUR, CONSTRUCTION PLANT AND MATERIALS

2.1. LIST THE FACTORS TO BE CONSIDERED WHEN CALCULATE ALL IN RATES FOR LABOR,

PLANTS AND MATERIAL.

Construction cost is a broad phrase or term and can be interpreted to mean cost of any sort toanyone associated with construction work. It depends on the point of view let us say you are a

contractor, your costs are your expenditure on labour, materials and plant. The clients cost of land,

consultant fees and so on.

The base cost of construction therefore comprises of expenditure on materials, labour and plant, the

quantities of materials, labour and plant required for a job are determined &attaching prices to these

defines the basic construction cost, but to these are also a variety of factors that affect this basic cost: -

In our industry most estimators will calculate costs based on net rates these will then be enhancedlater to include overheads and profit. Gross rates are sometimes referred to as all-in rates

ALL IN RATE FOR LABOR

Minimum guaranteed overtime.

Non productive time

ETF & EPF

Insurance

Medical facilities

Non productive time

Tool money

Inclement of bed weather

Minimum guaranteed bonus

ALL IN RATE FOR MATERIAL

Prime cost of the material

Transportation costs

Unloading and Stacking costs

Materials movement on site

Extra Materials to compensate for

Wastage Allowance for materials being measured net in BOQ

Loss in consolidation, shrinkage etc

ALL IN RATE FOR PLANT

Depreciation of plant

Repair and maintenance cost of plant

License and Insurances cost

Fuel and Lubricant

Operator cost


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2.2. ANALYZE THE FACTORS LISTED IN 2.1 AND EXPLAIN HOW EACH ONE CONTRIBUTES TO

THE TOPIC (LABOR COST, MATERIAL COST AND PLANT COST)

The Resources which compromise a unit rate are labour, materials and plant

LABOR

In the construction industry labour is often employed in two main ways, these are

:1.Direct Often referred to as cards in, the employer pays all the costs of employment including

for example national insurance and sick pay amongst others

.2.In-DirectThese workers are self employed or referred to in industry as on the lump

These are often labour only sub-contractors without the normal costs of employment along with the

other legal protections such as redundancy, sick pay and minimum notice periods.

Labour may be paid for on an hourly, daily, weekly or piecework basis. Directly employed operatives

are usually paid in accordance with a working rule agreement which will specify the rates

and allowances to be paid. However, some contractors are trying to move away from the national wage

bargaining and introduce local wage rates. Ultimately the actual rates paid for labour will dependon market forces

MATERIALS

Several factors affect the cost contractors pay for materials. In the material element of a unit rate, in

addition to the actual cost of the material the estimator must also consider above factors because

Where prices of materials are described by suppliers as exworks this means the price at the factory

and delivery costs will have to be added.

PLANT

Plant may be divided into two main categories, the costs of which can be allocated to contracts indiffering ways.

Non-Mechanical Plant

Basic items of plant including barrows, hosepipes, spades, trestles, scaffolding, small powered hand

tools etc

With the exception of scaffolding and one or two other items it is virtually impossible to allocate the cost

of non-mechanical plant items to a contract, let alone to a specific unit rate e.g. a wheelbarrow may be

used on several contracts in its life time.

The cost may be included in overhead charges as a percentage, as a lump sum in the preliminaries bill

or, more accurately, on longer contracts a list of non-mechanical plant items is prepared, coasted andincluded in the contract sum

Mechanical Plant

This include all mechanical plant not allocated to unit rate such as cranes, lift, dumpers, hoist, tractor,

generating set, drills, forklift etc. the contractor is expected to allow for this items whether they are

purchased specifically for the project or they are already owned by the firm or they are to be hired for

the period they are required on the project. The usual thing is to allow for

(a) Cost of transporting plant to site

(b)Hire rate for the period plant is on site

(c)Cost of maintenance on site

(d)Profit and overhead


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Task: 03

BUILD UP UNIT RATES FOR TRADES WORK ITEM

3.1. STATE THE FACTOR WHICH EFFECT THE CALCULATION OF UNIT RATES FOR

FOLLOWING WORK ITEM

01. EXCAVATION

The following factors may affect unit rates for ground works

Type of excavation e.g. trenches, pits, basements

Ground conditions e.g. clay, sand, soil, rock

Depth of excavation

Ground water

Time of year when excavating

Mechanical or hand excavation

Distance and availability of tips

Estimated bulking of materials

02. CONCRETE

The following factors may affect unit rates for concrete work;

Whether ready mixed or site mixed concrete is used

Whether concrete is reinforced

Surcharges for part loads Location of mixing plant on site

Type and size of mixing plant

Method of transporting, hoisting, placing and compacting mixed concrete

Cost of protecting and curing

Unset concrete Operatives working with concrete receive additional payments for skill and

responsibility.

Items of plant should be priced separately.

Concrete is usually measured in m3Site Mixed Concrete

03. BRICK WALL

The following factors may affect unit rates for brick work;

Quality of finished works

Type of work (i.e. straight walls, curved walls, foundations etc)

Working overhand, at height

Type of pointing


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04. FORMWORK

Formwork measures the actual faces of work covered or to be supplied. The following must be taken

into consideration in determining the size of the formwork

The amount of material required

The kind of finishes required i.e. sawn faced or smooth finish, ground finish, biscuit etc. This determines the

types of materials to be used as formwork and the surface from finish required is removed.

The height to be supported. This determines the height of props and types of props.

Normal labour for fabricating, erecting and striking of formwork.

The number of uses required of the formwork this is usually a matter of experience. In small

contract it may be possible to reuse the same formwork twice depending on the repetitive

nature of the work

REFERENCE: UNESCO-NIGERIA TECHNICAL & VOCATIONAL EDUCATION

REVITALISATION PROJECT-PHASE IINATIONAL DIPLOMA IN QUANTITY SURVEYING




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TASK: 04

DEMONSTRATE ABILITY TO COSTING OF PRELIMINARIES / OVERHEAD COST OF THE

CONTRACTOR

4.1. EXPLAIN PRELIMINARIES AND OVERHEAD COSTS IN BILL OF QUANTITIES

WHAT ARE PRELIMINARY ITEMS?

Preliminary items are items of cost which do not relate to any particular work section and usually listed

in the first bill of quantities. Many estimators prefers to inserts a lump sum for all the preliminaries

usually worked out as a percentage of the total of the measured works. It is good practice however to

put a price to each of the item. The price quoted should read at after careful consideration of each item

as it applies to the particular job at hand e.g water for the works. It will be pipe bone water readily

available on site or water has to be transported to site on trucks.

PRELIMINARY BILL

The preliminaries bill gives the contractors the opportunity to price overheads which is described in the

Code of Estimating Practice as the cost of administering a project and providing general plant, site

staff, facilities and site based services and other items not included in bill rates.

Preliminaries costs vary from contract to contract depending on complexity of work, size of

contract, specialist plant and equipment required, conditions imposed by the employer etc.

On relatively simple contracts preliminary costs may be in the order of 10 15% of the contract

sum whereas on complex contracts this figure could be much higher.

A contractor must calculate the cost of the preliminary items separately for each contract; no

two contracts are the same.

SMM7 recommends that fixed and time-related charges should be identified separately in a bill

of quantities.

A fixed charge is defined as the cost of work which can be considered as being independent ofduration

A time-related charge is defined as the cost of work which is to be considered as dependant on

duration.

OVERHEADSOverheads may be defined as the cost of maintaining (running) the contractors organization.

There are two types of overheads:

(1) Head Office

Annual cost of staff salaries, expenses, rents, rates, gas, water, electricity, telephones, officeequipment, postage, insurance, maintenance of buildings and equipment etc. The cost of these itemsis expressed as a percentage of a companys turnover and included in the tender.

(2) Project or SiteProject site costs including non productive (manual) site staff, site office costs, storage facilities andother preliminary / site organization costs. Items are priced as individual items and may be fixed or timerelated costs or a mix of fixed and time related costs. The costs of these items are included in thetender.


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4.2. JUSTIFY THE GIVEN SCENARIO IN RELATION TO THE ABOVE TWO EXAMPLES,

HOW/WHY DIFFERENT COSTS INVOLVED FOR THE SAME PRELIMINARY ITEMS IN

DIFFERENT PROJECTS.

The preliminaries are most important part in a BOQ also it is very difficult to calculate because it

usually will differ project to project because of following reasons

Will identify the two work item how it differ project to project

Transportation of machineries

The different distance of transporting plant to site

The different machineries needed for the different project

The different project scope (large or small)

Site office for consultant representative

The different number of staff for each project

The different maintain period because of the different duration of project

The accommodation required for the project it will defer each project The cost will differ according to place weather on site or off site

For the above mentioned reasons the cost of preliminary will differ each project so as an estimator he

will gain this knowledge through the past experience. Most of the times the preliminary item will be

calculate separately even same project scope


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4.3. CALCULATE THE COST OF ABOVE TWO ITEMS WITH YOUR OWN ASSUMPTION

PRELIMINARY ITEM-01: SITE OFFICE FOR CONSULTANTS REPRESENTATIVE

The contractor is usually expected to provide and maintain temporary site accommodation for Supervising consultant on site

Site agent and site staff Hut for workmen Storage, shed for materials, tools etc.

Pricing for these must cover the cost of:

Initial construction of accommodation

Removal on completion and making good ground disturbed

Maintenance of accommodation throughout duration of the project

Furniture including ventilation and air conditioning

Overhead and profit from this estimator must remove the resale value of items are still

useable at the end of the projects

SITE OFFICE

The contractor shall provide suitable accommodation for the clerk of works, with a minimum floor area

of 20 m2 including desk, four chairs, filing cabinet and all necessary heating, lighting and cleaning.

ASSUMPTION

Contract period: 144 weeks

Transport to and from site: Rs.22500 per trip

Hire of hut: Rs.8500.00 per week

Hire of furniture and heaters, etc.: Rs.2500.00 per week

FIXED CHARGES

Transport to and from site 2 trips Rs.22500 45000.00

Erection 10 hours

Dismantle 5 hours

15 hours laborer @ Rs.300.00 4500.00

Total of fixed charges 49,500.00

TIME RELATED CHARGES

Hire of hut 144 weeks @ Rs.8, 500.00 per week 1,224,000.00

Furniture and heaters 144 weeks @ Rs.2500.00 per week 360,000.00

Energy costs for heating and lighting:

144 weeks @ Rs.640.00 per week 92.160.00

Cleaning 2 hours per week 144 weeks =

288 hours @ Rs.1980.00 285,120.00

Total of time related charges 1,961,280.00

Rate per week = Rs.13, 620.00

Total (fixed and time related charges) 49,500.00 + 1,961,280.00 = 2,010,780.00


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PRELIMINARY ITEM-02: TRANSPORTATION OF MACHINERIES

This include all mechanical plant not allocated to unit rate such as cranes, lift, dumpers, hoist, tractor,

generating set, drills, forklift etc. the contractor is expected to allow for this items whether they are

purchased specifically for the project or they are already owned by the firm or they are to be hired for

the period they are required on the project. The usual thing is to allow for

(a) Cost of transporting plant to site

(b) Hire rate for the period plant is on site

(c) Cost of maintenance on site

(d) Profit and overhead

TRANSPORTATION OF MACHINERIES

Cost of plant 3,000,000.00

Less scrap value 450,000.00

2,550,000.00

Assume a life of 4 years therefore annual cost 2,550,000.00

4

= 637,500.00

Assume a usage of 1500 hours per year:

Cost per hour 637,500.00

1500

= 425.00

Assume 25% for repair and maintenance = 106.25

Assume 10% for license and insurance = 42.50

Total cost of plant 573.75

Assume 1 liter of fuel per hour @ Rs.135.00 Per liter = 135.00Assume 0.5 liter of lubricant oil per hour @ Rs.720.00 per liter = 360.00

Assume Rs.175.00 for the operator per hour = 175.00

Net unit rate 1,243.75

Overhead & profit 25% =310.93

Gross unit rate 1554.68


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TASK: 5 DESCRIBE THE PROCEDURE FOLLOWED IN PREPARATION OF A QUOTATION

5.1. DESIGN TWO SAMPLES INQUIRY LETTERS TO SUBCONTRACTOR AND SUPPLIER IN

ORDER TO COLLECT THEIR QUOTATION.

ENQUIRY LETTER TO SUPPLIERS

12/07/2012

DELTA MAGACONSTRUCTION (PVT) LTD,

NO: 39, DANIEL ROAD,

COLOMBO: 03

TO: SALES MANAGERORANGE ELECRIC PVT LTD,

165, GALLE ROAD,

DEHIWALA,

SRI LANKA.

Dear Sir,

CONSTRUCTION OF A PROPOSED SHOPPING COMPLEX

WE INVITE YOU TO QUOTE YOUR BEST PROPOSAL FOR SUPPLY OF BELOW MENTIONED

MATERIAL FOR OUR PROPOSED SHOPPING PROJECT AT

ITEM NO DESCRIPTION QUANTITY

01 ORANGE SPIRAL SHAPE ENERGY SAVING LAMP

TRI-PHOSPHOR POWDER

FLAME RETARDANT CAP

TUBE DIAMETER: 12MM

WATTAGE: 20W VOLTAGE: 110V

1000

YOUR QUOTATION MUST BE DELIVERED TO THIS ADDRESS

DELTA MAGACONSTRUCTION (PVT) LTD,

NO: Z39,

DANIEL ROAD,

COLOMBO: 03


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TERMS AND CONDITIONS

Payment terms : 1 week after delivery

Advance payment : 25% of total

Payment type & term : Please mention your payment type & term

Discounts : Please notify your discount

Transportation : By the Suppliers with safe with protection.

Traffic condition or restrictions : During week days from 8.00 am to 05.30 pm

vehicles can park at the site area.

Submission of quotation : Two weeks

Suppliers will be required to deliver the material according to the schedule. If you need to make any

inquires you may visit the site after contacting the site manager of the project. We would appreciate if

you could provide us with the relevant discounts since we are one of your frequent customers. If your

company is out of stock then please notify us when you will be able to receive these materials. And if

there are any clarifications about the tender please contact Mr.Aslam the estimator of the project.

We would appreciate if you would send the acknowledge receipt of this enquiry and submit the

quotation in accordance with the given instructions.

Yours Faithfully,

......

Aslam

(Quantity Surveyor)


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ENQUIRY LETTER TO SUBCONTRACTOR

__/__/2012

DELTA MAGA CONSTRUCTION (PVT) LTD,


COLOMBO: 03

TO: MANAGER

JUDI CONTRACTORS (PVT) LTD,

GALLE ROAD,

BARUWALA,

SRI LANKA.

DEAR SIR,

CONSTRUCTION OF A PROPOSED GYMNASIUM

WE INVITE YOU TO QUOTE YOUR BEST PROPOSAL FOR DOING OF BELOW MENTIONED WORK

FOR OUR PROPOSED GYMNASIUM PROJECT AT PANAGODA.

ITEM NO DESCRIPTION QUANTITY

01PLASTERING FOR EXTERNAL BRICK WALL WITH1:3

CEMENT: SAND MORTAR750m

2

YOUR QUOTATION MUST BE DELIVERED TO THIS ADDRESS

DELTA MAGA CONSTRUCTION (PVT) LTD,


COLOMBO-03

TO ARRIVE NO LATER THAN 02.00 P.M. ON OR BEFORE __ OF ___ 2012


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TERMS AND CONDITIONS

Payment terms : 2 weeks after work started

Advance payment : 20% of total

Payment type & term : Please mention your payment type & term

Traffic condition or restrictions : During week days from 8.00 am to 05.30 pm vehicles can park

at the site area.

Submission of quotation : Two weeks

Subcontractor will be required to deliver the material according to the schedule. If you need to make

any inquires you may visit the site after contacting the site manager of the project. We would

appreciate if you could provide us with the relevant discounts since we are one of your frequent

contractors. If your company is out of stock then please notify us when you will be able to receive these

materials. And if there are any clarifications about the tender please contact Mr. Aslam the estimator of

the project.

We would appreciate if you would send the acknowledge receipt of this enquiry and submit the

quotation in accordance with the given instructions.

Yours Faithfully

..........................

Aslam

(Quantity Surveyor)


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5.2. DESCRIBE THE FACTORS THAT WILL BE CONSIDERED BY THE ESTIMATOR

WHEN EVALUATING THE QUOTATION RECEIVED FROM SUBCONTRACTORS AND

SUPPLIERS

Choosing the right suppliers involves much more than scanning price lists. Your choice will depend on

a wide range of factors such as value for money, quality, reliability and service. How you weigh up the

importance of these different factors will depend on your business priorities and strategy.

the criteria for evaluating and awarding a contract is required to be stated in the tender documents

these would normally be the most economically advantageous taking account of such factors as: PURCHASE PRICE:

Lowest Price Technically Acceptable This approach is appropriate when best value is expected to

result from selection of the technically acceptable offer with the lowest evaluated price. Price is

important, but it shouldn't be the only reason you choose a supplier. Lower prices may reflect

poorer quality goods and services which, in the long run, may not be the most cost-effective option.

Be confident that your supplier can make a sufficient margin at the price quoted for the business to

be commercially viable.

OTHER WHOLE LIFE COSTS :

It will involve Running costs, obsolescence, resale value or disposal cost, after sales service and

technical assistance from supplier or sub-contractor

DELIVERY:

The requesting activity may provide instructions via the Purchase Request that delivery is a critical

factor in choosing the prospective supplier or sub-contractor

QUALITY :The estimator should have to check the quality requirement according to the specification prepared

for the particular work

DISCOUNT RATE :

This is the important feather among the supplier or subcontractor because he can improve his profit

through this discount and he can reduce his tender value so he can win a job through this

CONTRACT TERMS :

The main estimator responsibility is to consider the contract terms to continue the contract deal with

a supplier in a fair manner

PAST PERFORMANCE :

The ability of well performance is a main reason in selecting subcontractor so the estimator should

have to take attention in past performance of subcontractor with the same project

BUSINESS PRACTICES :

The estimator will look at his business deal with other contractor and check his practices in his

business it will be useful to continue the deal for long period

The above mentioned factors should have to consider by the estimator in evaluating quotation fromsupplier and subcontractor because it will be very helpful to win a job.


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5.3 DESCRIBE THE DIFFERENT FORM DISCOUNT OFFERED IN THE CONSTRUCTION

INDUSTRY AND EXPLAIN HOW YOU INCORPORATE THEM IN PRICING.

DISCOUNTS

Discounts are the quoted amount or stated cost which will deduct from the payments to the suppliers

and subcontractors, depend on fulfillment of the conditions which are specified in the contract for

acquiring discounts.

Followings are two types of discounts accepted by the subcontractors and suppliers.

Trade discounts

Cash discounts

TRADE DISCOUNTS

Trade discounts apply particularly when there are standard price lists prepared by manufacturers orsuppliers and when items may be sold direct to the public. The discount is varied to allow forfluctuations in prices to avoid frequent revision of such lists. Some suppliers allow large discounts for

regular customers who purchase large quantities.

Ex: -

Builders and plumbers may get, say, a 20% discount on the supply of sanitary fittings when

compared with the retail price to the general public.

Let us consider a supplier of Bricks. The supplier might allow trade discounts as given below.

Quantity Discounts

5000 - 10000 Bricks 15%

10000 - 15000 Bricks 18%

15000 - 20000 Bricks 20%

If the buyer purchases more than 5000 Bricks then the buyer is entitled for a discount of 15 % from the

marked price. Similarly if the buyer purchases more than 10,000 Bricks s, he could get a discount of

18%. Similarly if the buyer purchases more than 20,000 Bricks which are considered to be a large

quantity, he could get a 20% discount rate. While the price of Bricks raised by 2%. Then the supplier

could alter the discount rate without making any changes to the actual prices. In this case reducing the

discount up to 3% for 1000-5000 Bricks would be satisfactory.


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CASH DISCOUNTS

A cash discount is often given by suppliers and subcontractors to encourage early settlement of

accounts.

If the contractor settle the accounts to the suppliers and subcontractors before the original date than

the contractor will get some percentage of discounts

Ex: -

Let us consider that the electrical installation was carried out by a sub-contractor. The invoiced value of

work done by the sub-contractor is Rs. 400,000 for a particular month. Usually the sub-contractors

payment is done through the main contractor. If the main contractor settles the amount Rs. 400,000

within the specific period, the main contractor is entitled for a discount which is normally 5 % of the

invoice value. So the contractor has to pay only Rs. 180000. But if the main contractor fails to make

the payment within the specified time, then the main contractor has to pay the entire Rs. 400,000 Such

discounts given by sub-contractors will motivate the contractors to make the payments earlier. Thus itwill ensure the smooth function of the construction project. Likewise the suppliers also give such cash

discounts to encourage the contractor to settle the payments quickly.

Explanation of how to incorporate them into the tender

The main contractor is always expecting about the discount to use it in pricing the tender. If the main

contractor knows the amount of the discounts from the subcontractors or suppliers

Contractor can reduce the rate of the work in that tender. So the tender price may be reduced.

This might be increased the chance to win the tender.

That is why the estimator or being consultancy Quantity Surveyors should have a thorough knowledge

about the discounts and should apply the discounts while he is pricing the tender.


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CONCLUSION

As a quantity surveyor we have some responsibility construction industry out of them tender

stage is a most important one. Because each and every constructions except some unique

construction going to hand over to one of a best contractor only by calling tender.

Here we are supposed to refer and suppose to understand something clearly about the

knowledge of tender. And we have to have enough knowledge about the project that has been

invited, client of the proposed project and about the consultant as well. Cause those are the

important thing that we are going to have a relationship.

So that we want to understand this all thing as a QS and we are the peoples who are going to

handle with this kind of meter

In this way I collected some useful information according to the lecturer requirement so I think

it will be very useful document which explain basic knowledge of tender


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REFERENCES

UNESCO-NIGERIA TECHNICAL & VOCATIONAL EDUCATIONREVITALISATION PROJECT-PHASE II

NATIONAL DIPLOMA IN QUANTITY SURVEYING



QUANTITY SURVEYORS POCKET BOOK

FIRST EDITION2009DUNCAN CARTLIDGE FRICS

PUBLISHED BY ELSEVIER LTD

ESTIMATING AND TENDERING FOR CONSTRUCTION WORK

THIRD EDITION 2004

MARTIN BROOK BENG (TECH) FCIOB

PUBLISHED BY ELSEVIER LTD

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