International Burch university

Architecture department
Sarajevo

Course : Building Construction

Technology I
Date : xx / xx / xxxx

LECTURE NO.4
OFFER TENDRING PLANNING
Building Construction Technology I

Professor : Prof.dr.Nerman Rustempasic

Assistant : M.Sc. Ahmed El Sayed

INTRODUCTION

Offer tendering and construction site are very

important themes for every engineer. Without
understanding these terms and process, a lot of
problems will occur such as : why we didnt get this
project? Why the other company or designers are
getting the jobs and not us?

This kind of questions can be answered if the designer

( engineer ) learns the realtion between designing and
winning in tender.

Without the tenderation there are no projects, which

means that designers will have no jobs to do.

TENDER OFFER FROM THE CLIENT'S AND

ARCHITECT'S PERSPECTIVE

Perception of the stages of a construction project often

varies between the client/architect and the contractor.

Client and architect are involved in the project for

months before the actual construction work commences,
for a contractor however stages of the project include
only the tender offer and construction stages.

Tender procedure, from clients and architects point of

view, is regulated by NJCC (National Joint Consultative
Committee for Building).

TENDER OFFER FROM THE CLIENT'S AND

ARCHITECT'S PERSPECTIVE

Most small projects apply the "Single Stage Selective

Tendering which can be characterized in the following
way:

Invitation to tender the contractors are contacted if they

would be willing to tender. The enquiry is issued in writing 4-6
weeks before the tender and it should contain a brief
description of the investment and the commencement date.

Number of contractors tendering recommended

maximum number of contractors is 6, with additional in reserve.
The limitation is due to the fact, that the tenders tend to be
expensive and it is irresponsible to unnecessarily inflate prices
in
the
construction
industry.

TENDER OFFER FROM THE CLIENT'S AND

ARCHITECT'S PERSPECTIVE

Tender documentation the aim of tender documentation all

offers will be presented on the same basis, so the
competition may only be about the price. It is assumed that
each contractor will complete works in a way specified in
documentation.

Time to prepare tender offer in smaller projects it is

usually 3-4 weeks, in bigger and more complex investments
it
can
take
longer.

Changes in tender documentation contractors should not

make any changes. They should instead send an enquiry
min. 10 days before the tender date. Architect should send
a reply to all contractors to provide them all the same
chances.

TENDER OFFER FROM THE CLIENT'S AND

ARCHITECT'S PERSPECTIVE

It is often disregarded in practice, due to the short time

allowed to prepare an estimate or vagueness.

Withdrawal of the offer tender offer can be withdrawn by the

contractor at all times, as long as it has not been chosen by the
investor. Acceptance of an offer constitutes an agreement
between the investor and contractor.

Tender offers analysis tender offers should be analyzed soon

after they were returned. After the contract is awarded architect
should inform all participants about the offers received, without
naming the companies, which put them forward. Even though it
gives contractors an insight into competitors pricing policy, it is
often
disregarded.

TENDER OFFER FROM THE CLIENT'S AND

ARCHITECT'S PERSPECTIVE

Error check the winning estimate is checked and the

erroneous calculations are sent back to the contractor.
There are two procedures to resolve those: "Alternative 1"
where the contractor can confirm or withdraw the offer and
"Alternative 2" - where the contractor can confirm the offer
or correct mistakes.

Price negotiation procedures allow pricing negotiations

leading to lowering the prices if the lowest offer exceeds
investors budget.

BASICS OF COST ESTIMATE PREPARATION

Preparation of tender offer requires various

documentation types, as specified by an architect or
an investor. They involve different terms of
settlement and risk.

Regardless of the type of documentation one should

take into account costs not directly connected with
corresponding construction works, e.g. cost of the
toilet, on-site safety, company standing costs etc.
Those
costs
are
usually
included
in
the
"Preliminaries", at the beginning of the estimate.

SPECIFICATION & DRAWINGS

This type of documentation contains drawings and

specification; it can also contain a separate scope of
works to clarify the full costs.

Contractor is responsible for surveying the works. Any

errors in measurements and cost estimates will not be
taken into consideration and the contractor will be
required to conduct all the works indicated in the
documentation, regardless of whether they are
specified by the scope of work. It means that contractor
needs to check all documentation carefully, since each
its element included in any part of documentation
constitutes part of contract and needs to be completed.

BILL OF QUANTITIES

In case of bigger projects, tender documents often

consist of "Bill of Quantities" (BoQ). It is a list of all
required works (with all measurements already
made) the contractor needs to provide their rates
for each of the works.

BoQ is prepared by "Quantity Surveyor" employed by

the investor, according to Standard Method of
Measurement - SMM.

The latest version is SMM7, but the smaller project

still often use.

BILL OF QUANTITIES

The rates given in BoQ will be used to calculate

the cost of additional works of the same type
during the project, it is therefore worth to try to
foresee potential additional works and raise the
rate for the corresponding type of works.

The errors in the BoQ are the liability of the investor

the contractor needs to be paid for all works required,
even if they are erroneous or if some works are omitted.
Because of that BoQ is not used often anymore.

If the investor cannot state exact measurements, the

approximate quantities are applied.

SCHEDULE OF RATES

"Schedule of Rates" is the list of the rates and its used very
rarely, only in case if the scope of work is impossible to define.

The contractor is accountable for completed works according

to the time and agreed hourly or daily rates.

It is of course an ideal basis for cooperation from contractor's

point of view, because they are not at any risk and all the
materials and employees working time is being paid for.

In case of such cooperation form it is crucial to keep a detailed

record of time and resources spent during the project. Those
are necessary to establish the payment and eliminate potential
conflicts between contractor and investor.

SCHEDULING AND PLANNING CONSTRUCTION WORKS

Without proper planning it is difficult to make a construction project

run smoothly and be completed on time and within budget. Of
course, smaller and less complex projects very often do not have a
formulated formal plan or schedule, since all planning takes place in
managers head.

It is an acceptable solution, however everyones perception has its

limits, and in most cases it is impossible to manage all aspects of a
months-long project without the use of additional tools. The main
reasons for planning in construction works can be summed up as:

Improved management of works and resources, their sequence and

consequences of any changes that may take place
Ability to establish a realistic completion date
Improved efficiency control
Facilitated risk assessment process of the project
Basis for solving contractual claims resulting from delays

SCHEDULING AND PLANNING CONSTRUCTION WORKS

Appropriate schedule of works allows to establish

completion dates for all stages and elements of
works, e.g. when will the electrician be needed,
when will the garden door be installed, floor panels
delivered etc. Of course, scheduling is not about
planning works a week in advance this can be done
by every skilled worker.

A correctly designed work schedule allows such

information to be provided months in advance. Such
information often proves crucial, especially when
orders have to be made long before the delivery.

PLANNING TECHNIQUES

The only technique commonly applied in small and

middle sized projects is Gantt chart" or "Bar chart
(both names refer to the same method).

Other techniques (arrow diagrams, precedence

diagrams, line of balance, time-chainage diagrams)
are only applied to large projects, often involving
infrastructural works. Please contact us for further
information about these methods.

GANTT CHART

Gantt or Bar chart is the easiest available planning

technique, and probably the only one commonly understood
without prior training. Despite its simplicity, a correctly
designed chart will provide a lot of information necessary to
complete the project.

Each line on the chart indicates a task or group of tasks

necessary in the project. The length of a bar is relative to
the time necessary to carry out a task.

Individual tasks stand in dynamic dependency relationships

that reflect the order of completion. This allows for a fast
check of how, e.g. a delay of task A will influence the
completion of task C, taking place 2 months later.

GANTT CHART

Appropriately prepared chart indicates the critical tasks,

i.e. the ones that determine the timely completion of the
entire project. These form a "critical path". This allows
for more attention to be given to the most important
tasks.

Each task can be assigned necessary resources, workers,

equipment and material, which facilitates the procedures
of placing orders and workforce management.

Additionally, the chart may include, or be the basis for a

detailed analysis of financial flow in the project and risk
management.

GANTT CHART

TYPES OF SCHEDULES

Schedules can be classified depending on the type and precision of

information provided.

Master program : It is a general project plan, which does not

include any details, and only shows the main stages of works. It is
mainly useful for the clients and architects supervising the
completion time. The master program must be provided to
architect by the contractor.

Detailed program : It is an expansion of a master program,

which includes all activities and details of works completion. It is
used by the contractor to manage works and resources. Usually it
is not passed on to client or architect. Due to the large amount of
information it contains, the detailed program is often prepared to
only embrace a specific period of time (e.g. 1 or 2 weeks of works).

TYPES OF SCHEDULES

Purchase Schedule : Additional schedules are

created as necessary by filtering the data included in
Detailed program. The most popular is "the
purchase schedule", which indicates the deadlines for
making orders. All data is dynamically related, and
therefore if the installation of windows, which have to
be ordered 4 weeks in advance, is delayed, the
schedule will automatically suggest new order date.

Using schedules greatly facilitates site management

and reduces risk of making a mistake or missing out
important tasks.

SOFTWARE

The development of computers and scheduling software has

made preparing and updating of schedules much easier. There
are many programs
available, differing in functions
advancement, user- friendliness and price.

Probably the most popular tools available for MS Windows are:

MS Project
Asta PowerProject
Primavera

Choosing appropriate planning software depends on individual

needs and preferences. Its worth to have a look around and
choose among many available additional options. One very
useful additional feature is the possibility to synchronize tasks
with calendar, or sharing the plan among several employees.

RISK MANAGEMENT

Using planning software makes it possible to expand the

functions of schedules to include project risk management. Easy
scenarios analysis processes allow preparation of many variants
of project, e.g. what will the consequences of a delay for a
particular task be and how to deal with them. This kind of
theoretical analysis allows better understanding the
mechanisms behind the project and preparing alternative plans,
should problems emerge.

Risk analysis can be summed up with the following:

Hazard identification ( Identification of dangerous things )

Probability and consequences estimate
Deciding on risk management method (avoidance, reduction,
sharing and retention)
Management and supervision
Conclusion and report

PROBLEMS WITH SCHEDULES

Planning and schedules are not problem-free and, as it

happens, their benefits are not fully used.

One must bear in mind that schedule is a dynamical tool which

needs to be regularly updated in order to serve us most
efficiently. Every construction plan is appropriate only until the
project has started. It can be often seen, that our plans do not
reflect reality, in which case the plan must be updated,
otherwise it will lose its adequacy.

Plan is only as good as the person who created it. Software is

only a tool, not a magical solution to all our problems. If the
project deadline we set is not realistic, there is no plan which
will make completion on time possible.

THANK YOU