CIVL 0026 Contractual Procedures and Estimating Assignment - Middle East College, Oman

OBJECTIVE: Develop the students' understanding of tendering procedures in construction industry.

OUTCOMES: On completion of this module the student should be able to: Give reasoned advice on managing tendering process and presenting a report.

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TASK - Prepare the PRIME DOCUMENT forming the part of tender document.

a) Review the three principal methods of choosing a contractor and suggest the client to select the most appropriate tendering procedure.

b) Explain the various documents required for preparing tender document.

c) Suggest the possibility of using electronic tendering in the case study with pros and cons.

d) As the part of tender document prepare minimum four prime document (Instruction to tenderers is mandatory) for construction of double lane railway track.

Answer -

Introduction

The construction industry requires a specific number of things in order to start a project that they have undertaken. Without the consideration of certain aspects neither can the project be initiated nor can they be completed successfully. There are also legal obligations to consider while investing or formulating a construction project in any sector. The process of tendering, therefore, is quite vital for the successful operating of the construction project. Tendering is a process that is used by the government or the financial institutions in order to invite the bids from the contractors who are interested in work on specific packages or projects of the construction work. To tender is the activity of inviting bids to formally accept an offer or a project like a takeover bid. This has to be done in a specific amount of time. This paper is concerned with the detailed discussion on the process of tendering and the types of tendering there are for the contractors or the financial institutions to grab on for the initiation of a project.

While discussing the methods of tendering and the appropriate type of tendering procedure that will be fruitful for a construction project in Oman, the discussion has to consider also the construction and building industry of man and whether the contract conditions are within the validation of the country. The project is for the construction of a railway track that has a double lane and is part of the national railways of Oman, which is a government organization investing 16.6 billion Omani Rails on the project. The construction work will cover 2135 km in four phases namely, Salalah to Amal, Amal to Al Duqm, Al Duqm to Muscat, and Muscat to Sohar. The connection will be non-electrified and these major areas will be connected within a time span of 3 years. The tender to be made here will be following the contract conditions of the fourth edition of the September 1999 Sultanate of Oman Standard Document for Building and Civil Engineering Works.

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Main body

1. Principal methods of choosing contractor:

Types of tendering Methods:

1. Open tendering: The term open tendering is referred to as the competitive procurement method used publically for attaining the infrastructure goods and services. It is important for managing the guidelines for improving the continuation of the facilities and deploying the explicit establishment of the procurement of the activities defining the standard bidding and development alignment. The concept of open tendering deals with the use of the open competition, opens competitive bidding, and open competition. It is effective for enabling the development of the procurement notices for refining the management of the effective documentations. The analysis of the bids is helpful for ensuring the invitation for tender development and alignment of the effective work development. The open tender principles align with the comprehensive and effective documentation for the listing of the works that can enable the usage of the monetary value analysis. The negotiated contract tendering is very effective for managing the functional and effective development of the works. The initiation of the steps of working documentation would deal with the innovation technology. Tender documentation is very effective for aligning the definition of the services for aligning the integration of the process management. The impact analysis of the open tendering is responsible for the unbiased selection of the contractor for defining the explicit management of the tender processing.

2. Selective tender: The selective tendering is responsible for the elements of drawing of the firms and integrating the confined management of the arrangement of the firms and tender request is being sent to them. It is crucial for ensuring the arrangement of the price based selection form and the alignment would be done in the pre-qualification step. The following 3 ways can be used for the selection of contractor using selective tendering,

• Use of advertisement is prominent for attracting various contractors for defining the selection of the firms and implying tendering process.
• The concept of ad-hoc list is helpful for the consultants for short-listing the contractors for the tender process
• A number of national bodies and local authorities are responsible for keeping the list of contractors in classification of cost range and work type. The major alignment of the list of contractor is defined for the management of the information development and composition of the list of tenders and analysis of the financial and technical performance. The consideration would enable the formation of the work identification and integrating the management of the technical and financial performance evaluation. The NJCC or national joint consultative committee for building has developed some specific questionnaire termed as standard form for tendering questionnaire for private edition and alignment of the facilities. The research questions deals with the effective alignment of the works for integration of the 3 years. The completion of the form would be done with the specific alignment of the contractual issues.

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3. Negotiated Tender: Negotiated tender is developed for aligning the integration and development of the information and aligning the composition of the facilities. The deployment of the negotiated content is very dependent on the formation of the works aligned with the integration development. The analysis of the bids is helpful for ensuring the invitation for tender development and alignment of the effective work development. The negotiated tender principles align with the comprehensive and effective documentation for the listing of the works that can enable the usage of the monetary value analysis. The negotiated contract tendering is very effective for managing the functional and effective development of the works. The initiation of the steps of working documentation would deal with the innovation technology. Tender documentation is very effective for aligning the definition of the services for aligning the integration of the process management.

2. Selection appropriate tender with justification and Tender procedures:

Now we will be going to discuss regarding the open tender that over here in Oman it is going to be initiated. Open Tendering: In such process, the main tendering procedure is seen to have employed both by the private and government sector. In this case, the employer is seen to have effective access to resources and budget. Besides, employer advertises the tender offer in the local daily giving details of information of the proposed work. This allows invitation to legal sense of tender where each details and key information of the proposed work is articulated. The pre-requisition of tendering information on the form of possession is registered. Besides, the registration of identifying in the tender notice is examined, then the advertisement is directed towards the particular class of the public having been said by qualifications. In order to reduce the number of enquiries for private project earnest money has been deposited (Athias and Chever, 2018).

The source of funding undertaken by employer in completion of a project is identified through examination of project of finance that needs to be put in place. The source of funding in the initial phase needs to be identified and the financing project put thereby need to be fixed in place. This will help in allocation of resources and budget effectively. The procedures for subsequent stages that are established with the express consent of employer with a contract to tender the process will go smoothly.

The most important factor remains the approval of the receipt of the bon fide tender had been selected then it will be returned. Since the price plays a major role in order to take decision of tender or bid to accept, it is not the only factor taken into account. In Oman Client does not bind to accept any offer or at lowest. The advantages to have an open tender are to have allowance of any interested contractor to tender within flexible clauses. This certainly, it gives an opportunity for an unknown contractor to compete to your work. Allowance of tender list without bias, the client will obtain possibility of bargain in open tendering in Oman. The reason behind choosing an open tendering in Oman is due to advantageous factors of open tendering as mentioned and discussed above. Oman government has got number of policies which has the guidelines regarding an open tendering to accept or continue.

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3. Documents required for preparing tender document:

A tender can be described as the submission that a prospective supplier makes as a reply to the invitation to tender or to a letter of invitation. This helps in offering a proper supply of services as well as good as and the documents of a tender are generated in order to seek these offers or tenders (Jaskowski et al., 2019). Tendering is the selection of suppliers, which is necessary for the completion of a construction project like the building of the railway track with double lane and not only to select a consultancy service who would help with advice and is known as an appointment. The need for the tendering documents is quintessential for the successful operations of a project and can be formulated for a huge range of the contracts involving the supply of the equipment, the main contract of construction that includes the design, which the contractor has made, the enabling works, the demolition required, and more(Saleh and Alalouch, 2015).

The tender documents require to be divided or broken down for simplification of the process in to a number of packages although there is only a single main contract present and these packages needs to have a drawing design of its own with certain specifications that suit it so that the main contractor can issue it to the potential or probable sub-contractors. It makes the decision of the pricing of the tender by the contractor easier and the clients also able to compare it to tenderers other than the one being offered (Jaskowskiet al., 2019). The following documents are part of a tender:

• The invitation letter to the tender
• Instructions to tenderers
• The form of the tender
• The preliminaries involving the instruction of the pre-construction processes as well as the plan of waste management on the site if necessary.
• The form of agreement
• The form of the bonds
• The conditions of the contract as are issued by the fourth edition of the September 1999 Sultanate of Oman Standard Document for Building and Civil Engineering Works (Appasamyand Paul, 2016). It involves the amendments as well.
• The design drawings for the project.
• Specifications and details of the materials and services required.
• The slip of tender return.

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4. Electronic tendering:

There are times when the financial institution who is in need to start a construction project and the probable contractors who can complete the project are located in two different geographical locations are not able to contact physically. This is where the internet-based approach or process is used to complete the tendering processes starting from the publication of the advertisement to the receiving of the instructions or information and the submission of the data related to the tender and all this is conducted online (Zhanget al., 2016). The firms involved in this process are more efficient in their operational activities and the reduction or the elimination of the transactions that are based on paper helps in the speedy communication or exchange of the data.

The guiding principle of the e-tendering services and processes in Oman is simple. The electronic tendering is the process of carrying out the tendering processes that are traditional but are done in an electric form with the use of the internet. The Ministries of the Sultanate of Oman re able to use this process to create as well as publish different tenders and to sell them too. They receive bids of various kinds and amounts, they evaluate the tenders and the award the contracts to the most competent contractor to do the job (Appasamyand Paul, 2016). With the help of e-tendering, the suppliers are able to receive notifications that are relevant to the tender, the purchasing of the tender documents, the submission of the bids done online and lastly keeping a track of the bids made by the suppliers individually.

Under the Oman initiative, all the procurement and the tendering processes have been computerized in the government sector of Oman including the construction industry, by the Government Tender Board or GTB of the Sultanate of Oman. This initiative has helped in the establishment of a management system and process of tendering that is state of the art and centralized too (Asilian-Mahabadiet al., 2018). The government processes of tendering have become more efficient; have enhanced the aspect of transparency, as well as the accuracy, has become more evident. The process makes it easier for the government organizations like the national railways of Oman to float, prepare, award and evaluate tenders by the utilization of the e-tenders. It further will be able to help the consultants, contractors and the suppliers with the process of the mechanism to be able to purchase the important tenders, submit the appropriate offers, register as well as renew the registration online with the proper authority, which is the Government Tender Board. It has the following advantages:

• Interactive as well as simplified processes of tendering.
• One can access the e-tendering solutions 7 days of a week and 24 hours a day (Asilian-Mahabadiet al., 2018).
• The processing time of the tenders has decreased.
• The transparency, as well as the accountability of the processes of tendering, has increased.
• The support of the helpdesk is available in Arabic and in English too.
• The resources in the e-tendering processes are used effectively.

There are certain disadvantages of the system too and they are as follows:

• The IT systems responsible to carry out the process might crash, which will hinder the distribution of the documents and the considerable amount of investment that is required in the IT(Zhanget al., 2016).
• The submission of the tender can also be prevented if the system crashes and the cost cannot be saved without proper documents.
• E-tenders can be perspective at times leaving no room for innovation of any kind.
• Sometimes they are quite confusing and dense as well, which makes it difficult to navigate or just to access it.

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5. Prime document for a construction project:

The tender that is to be submitted by the prospective supplier for the completion of the double lane railway track project involves various specifications that have to be incorporated in the document of the tender so that it is a legalized process and to keep the operational activities in a systematic way(Ballesteros-Pérezet al., 2015). The prime document of the tendering process involves a number of specification and four most significant ones are detailed below:

1. Invitation to tender involves a number of details such as the mention of the business day, which divides the holidays from the working days. The commission date is mentioned as well, which shows when the client was able to accept the necessary equipment. It involves the contractor, the equipment, the essential software to be used such as the computer software or telecommunications software, the location of the project or the site where the construction work is to be initiated, the proper prices including the price of all the equipment, of installation as well as of the services, the tender, the tendered and the tender document (Ballesteros-Pérezet al., 2015).

2. Instructions to the tenderers include multiple aspects that involve the work of supplying, installing, integrating, testing, commissioning, training, etc. It also includes the eligibility criteria, the eligible services and goods, the tendering cost, the preparation of tenders, the clarifications and the acquaintance of the documents of tender, risks, compliance with the technical specifications, circular letters and addenda, language of the tender and governing laws, documents accompanying the tender, the confidentiality process, technical maintenance, training charges, asset barcoding, void, signing of the tender, submission of the tender, and many more (Jarkaset al., 2015).

3. The form of tender describes the work that is to be done and the time within which the project has to be completed. The section called "after compliments" discusses the specifications of the document, the instructions and the legalities of the project further and states the duties of the supplier and the contractors. The tender is to be considered with a reference number and a date along with the signatures of the parties involved and the authorities of the state. There is also a witness whose address and occupation are included (Jarkaset al., 2015). The appendix of the form includes the ruling language, the completion time, the commencement period, the minimum amount for the insurance or the third party, the penalty amount for any delay, and more.

4. List of the materials and the products that will be utilized to complete the project involves the name and amount of the materials used, the manufacturers of the products, the local and foreign market value and the reasons why the Omani products were not used (Saleh and Alalouch, 2015).

Conclusion and recommendation

The requirement of a proper tendering process is quite vital for the construction industry in Oman and that has been elaborately detailed in the sections above. It is significant to state that the proper tendering process helps in the opening, the evaluation as well as the selection of the right kind of vendor for the right kind of project. The government of Oman and the Sultanate of Oman Standard Document for Building and Civil Engineering Works follows an open as well as a fair and transparent selection procedure. The offer of the tender is made to all the shareholders and is also a public solicitation, which requests that the shareholders tender their part of the stock for selling at a definite rate and for a specific amount of time. The whole process of tendering improves the competition in the construction industry and new companies are able to understand in a better way the market or the industry that they work in and helps in the significant decrease of the traditional entry barriers. The open tendering procedure is quite useful in such a case and that has been detailed clearly as well as the need for the appreciation of the e-tendering processes, which are not only hassled free but are also much more efficient than the transactions based on paper. It has to be explored more often by the companies and the financial institutions for a smarter future of the construction industry.

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