How tendering works Story Created: Nov 25, 2014 at 11:35 PM ECT Story Updated: Nov 25, 2014 at 11:35 PM ECT There has been a lot written and spoken about construction contract tendering, evaluation and negotiations triggered by the new interchange to be managed by the National Infrastructure Development Company Ltd (Nidco). However, I have not heard any opinion based on knowledge of the contracting process. Tendering is conducted mainly using a “one-envelope” or “two-envelope” system. In either case, contractors are requested to submit technical details covering qualifications, experience, resources, track record, etc. However, in the one-envelope option, the price is also included; while with the two-envelopes option, the price is provided in a separate envelope. In the two-envelope system, which appears to apply in the instant case, the first envelope which contains the technical details is opened for all contractors, evaluated and ranked based solely on technical capacity to perform the job. The envelope with the price of the first-ranked contractor can then be opened for formal negotiations to be held. (Note the client’s estimate is just a guide as to the final cost and not a sacrosanct figure.) If negotiations with the first-ranked cannot be concluded, then the negotiations are formally terminated. The next step is for the client to open the envelope with the price of the second-ranked contractor and begin negotiations. This process can be repeated with qualified ranked contractors until an acceptable agreement on price is reached. If not, the project can be retendered. (It is improper practice for more than one priced envelope to be opened at a time or for negotiations to be conducted with more than one contractor simultaneously.) Construction engineers and project managers are fully aware of the process, but I have seen no comments from the professional associations because in Trinidad, fear of losing future contracts reigns. Haven Allahar via e-mail
Posted on: Wed, 26 Nov 2014 21:48:38 +0000
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