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Tender Definition

To invite bids for a project, or to simply accept a proper offer like a tender offer . Tender usually refers to the method whereby governments and financial institutions invite bids for giant projects that has got to be submitted within a finite deadline. The term also refers to the method whereby shareholders submit their shares or securities to a takeover offer.

For projects or procurement, most institutions have a well-defined tender process also as processes to control the opening, evaluation and final selection of the vendors. This ensures that the choice process is fair and transparent.

In the case of a takeover, most offers stipulate that a particular percentage of shares must be tendered by the deadline so as for the deal to proceed. Disgruntled shareholders who believe the takeover offer is just too low often refuse to tender their shares, they’ll also attempt to marshal support from other shareholders against the takeover during a bid, to dam the deal.


Necessity of Tender

An accord and satisfaction occurs when parties to a contract agree that the debt is discharged during a manner aside from in accordance with the terms of their original contract. The accord is that the new agreement and satisfaction is that the discharge of the requirement . The debt is discharged as long as debtor and creditor agree that quantity paid by debtor to creditor fully satisfies the whole claim. so as to repudiate a transaction fully satisfaction of claim creditor should return the tendered draft.

[i] a young back of payment may be a necessary prerequisite for filing suit where a legitimate accord and satisfaction is established. If a landlord wants to file suit to gather rent owed by the tenant the tender back of economic tenant’s payment may be a necessary prerequisite. However if the quantity paid in satisfaction is accepted to flow from in any event, the creditor needn’t tender back the quantity paid before bringing, an action on the first obligation.

[ii] Also if creditor wants to avoid a contract of accord on the bottom of want of consideration or fraud, the creditor needn’t tender back the quantity paid before bringing an action on the first debt.

Types of Tender

There are three sorts of tendering methods utilized in construction industry-

1. Open Tendering

2. Selective Tendering

3. Negotiated Tendering.

Open Tender

Open tender is an appointment where a billboard in local newspapers or trade invites contractors to use for tender documents.

A deposit is typically required to make sure that only serious offers are made, Presumably it’s needed to hide the value of copying the documents. Local. authorities are advised against open tendering because it often results in excessive tender lists where the value of abortive tendering is considerable. There are instances of selection criteria being applied after the tender has been submitted, so a bid might be rejected if a contractor doesn’t belong to an approved trade association.

Selective Tender

Selective tendering consists of drawing up an inventory of chosen firms and asking them to tender. it’s far and away the foremost common arrangement because it allows price to be the deciding criterion, all other selection factors will are addressed at the pre-qualification stage.

An advertisement may produce several interested contractors and suitable firms are selected to tender.

The consultant may contact those they might wish to place on an ad-hoc list.

Many local authorities and national bodies keep approved lists of contractors in certain categories, like work type and price range. Contractors who ask to be included on select lists of tenderer are usually asked to supply information about their financial and technical performance, particularly about the sort of labor into account . The National Joint Consultative Committee for Building (NJCC) has written the ‘Standard sort of tendering questionnaire – private edition’ so contractor so contractor can prepare answers to relevant questions beforehand . The questions mainly affect projects administered during the previous three years. Once the shape has been completed, it are often used for specific projects or for those compiling lists of selected contractors.

Ngotiated Tender

Under this method normally one contractor is approached and such tender mainly used for specialist work like lift system or airport project at big level, in such case there are limited number of contractor who do such add the market. it’s supported one-to-one discussion with contractors to negotiated the terms of contract.

Tender Notice

The tender notice should altogether cases state :

(i) Name and place of labor.

(ii) Approximate cost of labor.

(iii) Amount of earnest and therefore the form during which it are often deposited.

(iv) Period of completion.

(v) Place and time where tender documents are often seen.

(vi) Place and time where tender documents are often obtained.

(vii) Date and time up to which tender documents are going to be sold.

(viii) the quantity , if any, to be purchased such documents.

(ix) The place where the date on which and therefore the time when tender are to be submitted and are to be opened.

(x) the other information relevant in tender notice.

Earnest money

A made to a seller showing the buyer’s straightness during a transaction. Often utilized in real es;lale transactions earnest money allows the customer overtime when seeking financing. earnest is usually held jointly by the vendor and buyer during a trust or escrow account.

An earnest deposit shows the vendor that a buyer is serious about purchasing a properly. When the transaction is finalized, the funds are put toward the buyer’s deposit . If the deal falls through, the customer may nol be able 10 reclaim the deposit. Typically, if the vendor terminates the deal, the earnest are going to be returned 10 the customer . When the customer is liable for retracting the offer, the vendor will usually be awarded the cash .

Security deposit : A margin may be a sum of cash that the lenanl agrees Lo pay the owner prior 10 getting into the rental unit. It is meant 10 protect a landlord against damage or non-payment of rent by the lenanl. A landlord is required 10 hold this money during a designated interest bearing account, typically a bank bank account .

Security deposits are often either refundable or nonrefundable, counting on the terms of the transaction. because the name implies, the deposit intended as a measure of security for the recipient. There are limits on the quantity of the safety deposit:

✓ If the safety deposit is for a residential property without furniture, the safety deposit may equal 2 times the rent.

✓ If the residence is furnished, the owner may agitate to three times the rent.

✓ there’s no restriction on the quantity of the safety deposit for the rental of a billboard properly.

Examples : the owner required one and a half month’s rent to be held as a margin just in case of injury to the apartment or breach of lease.

Tender Documents

The tender documents consist of—

(i) Instructions to tenderers and conditions of tenders,

(ii) Regulations for tenders & contracts, GCC & standard specifications.

(iii) Special conditions of contract, if any.

(iv) Special specification, if any.

(v) Tender schedule.

(vi) the shape of agreement, which the successful tenders, is required to execute.

Tender Documents

Terms Associated With Tender Documents

✓ Time Extension : If the Tenderer shall desire an extension of the deadline for completion of labor on the grounds of his having been unavoidably hindered in its execution or on the other ground he shall apply in writing to the Scientist Incharge, NABI within 10 days of-the dote of the hindrance on of which he extensions as aforesaid bul before the expiry of your time limit and therefore the Scientist Incharge, if in his opinion (which shall be final) reasonable grounds as shown thereof, authorized such of your time if any, as may, in his opinion be necessary or proper.

✓ Arbitration : Except where otherwise provided within the contract all questions and disputes concerning the meaning of the specifications, designs, drawings and directions here in before mentioned and on the standard of workmanship or materials used on the work or on the other question, claim , right, matter or thing whatsoever, in any arising out of or concerning the contract, designs, drawings, specifications, estimates, instructions, orders or these conditions or otherwise concerning the works, or the execution or failure to execute an equivalent whether arising during the progress of the work or after the completion or abandonment thereof shall be mentioned the only arbitration of the person selected from out of a panel of names to be supplied upon an invitation in writing by party invoking the arbitration by the chief Director, NABI, at the time of the dispute.

It will be no objection to any such appointment that the arbitrator so appointed was related to the work which he had to affect the matters to which the contract relates which within the course of his duties in association with the Scientist Incharge, NABI, he had expressed views on all or any of the matters at issue or difference. The arbitrator to whom the matter is originally referred being unable to act for any reason, the chief Director shall appoint another person to act as arbitrator in accordance with the terms of the contract. Such person shall be entitled to proceed with the reference from the stage at which it had been left by his predecessor.

It is also a term of this contract that nobody aside from an individual appointed by the chief Director as aforesaid shall act as arbitrator. altogether cases where the quantity of the claim at issue is Rs.50000/- (Rs. Fifty thousand only) or above, the arbitrator shall give reasons for the award.

Subject as aforesaid the provisions of Arbitration and Cancellation Act 1996 or any statutory modifications or reenactment thereof and therefore the rules framed there under and for the nonce effective shall apply 10 the arbitration proceeding under this clause.

✓ Completion of Work : Without prejudice to the rights of Scientist Incharge under any clause hereinafter contained on completion of the work, the Tenderer shall be provided with a certificate by the Scientist Incharge or his representative of such completion, but no such certificate shall tend nor shall the work be considered to be complete until the Tenderer shall have faraway from the premises on which the work has been executed, all surplus materials and rubbish, and cleaning off the dirt from all doors, walls, floors, or the other parts of buildings said to possess been completed, and therefore the measurements within the said certificate shall be binding and conclusive against the Tenderer, if lhe Tenderer shall fail to suits the wants of this clause on the removal of scaffolding, surplus materials, and rubbish and cleaning off dirt on or before the date fixed for the completion of the work, Scientist Incharge, NABI may at the expense of the Tenderer have removed such scaffolding, surplus materials and rubbish and eliminate an equivalent as he thinks fit and clean off such dirt as aforesaid and therefore the Tenderer shall forth with pay the quantity of all expenses so Incurred, and shall haven’t any claim in respect of any such scaffolding or surplus materials as aforesaid apart from any such sale proceeds actually realized by the sale thereof.

✓ Price Variation clause : The rates for every item quoted by the contractor and accepted by the Railway shall hold good till completion of the work.

Fluctuations in nurkel rates/conditions, taxes, additional levies, tools or the other changes within the cost of an item, as an entire or within the cost of a component of expenditure constituting that item shall be taken under consideration and payments to contractor shall be adjusted i.e. increased/ decreased in accordance with the provisions of this clause. No other claims on account of those inputs shall be admissible.

The total amount payable to the contractor for the payments made through on account/ final bills for the work wiped out a specific quarter shall be adjusted i.e. increased/ decreased, supported the general market situation as reflected by increased/ decreased in various Price Indices published by the Federal Reserve Bank of India form lime to lime.

The amount of adjustment i.e increased/ decreased within the payments to the contractor shall be calculated in accordance with the tactic detailed during this clause.

The Price Variation Clause are going to be applicable to all or any extensions of your time granted to the date of completion in cases where the first time of completion was quite a year except extensions granted.

✓ Liquidated damage : Liquidated damages are an agreed-upon amount of cash that parties to a contract promise to pay if one among them breaches the contract.

Unlike other sorts of damages, like compensatory damages and exemplary damages , liquidated damages typically only inherit play when there’s a contract involved. the quantity of liquidated usually prescribed before time and written into the contract. The parties to a contract may additionally agree before time on what sorts of actions would require a payment of liquidated damages.

For instance, a buyer and seller of widgets might agree that the vendor can pay liquidated damages if he cannot deliver the widgets on time, but not if he cannot deliver the right number of widgets.

In some contracts, the parties will agree before time that liquidated damages should be paid in certain situations, but they’re going to not specify a dollar amount. In these cases, the quantity is claimed to be “at large,” and a judge or jury will usually determine the quantity if the dispute goes to court. A liquidated damages clause must meet two conditions for the court to uphold it:

The amount of liquidated damages must be roughly adequate to the quantity that the party who is owed the damages will lose thanks to the breach of contract, and therefore the damages must be uncertain enough that the liquidated damages clause saves both parties substantial time and money in deciding the particular damages amount.

If damages are extremely uncertain or impossible to work out, they’ll be mentioned as “unliquidated damages.” Damages that depend upon a particular event occurring or not occurring can also be called “unliquidated damages.” as an example , suppose the defendant promised to lease a storefront to the plaintiff on or before April 1. The plaintiff planned to open a bakery within the store. However, the defendant didn’t actually lease the storefront to the plaintiff until May 15. the quantity of cash the plaintiff may need made within the month-and-a-half between April 1 and should 15 is speculative; the court can only guess what proportion would are made. If the leasing contract has; a liquidated damages clause specifying what proportion the defendant should pay, the court will likely enforce it unless the quantity is unreasonable or meant to be a punishment.

A liquidated damages clause can’t be wont to punish either party for breaching the contract. If the parties want to line aside an amount as punishment for a breach, they will use a “penal clause” or a “penalty clause,” which lists the quantity of a penalty which will be imposed if certain events occur. as an example , a contractor who doesn’t finish a project on time may need to pay a penalty amount. Not all kinds of contracts, however, may include a penalty clause. The Uniform Code prohibits penalty clauses in most sales contracts, for instance.

✓ Unliquidated damage : Unliquidated damages ask damages during a breach of contract case that weren’t predetermined by the party. The concept of unliquidated damages appears within the law in both torts and jurisprudence . It can ask any damages award a court awards during a breach of contract case, it also can ask damages during a tort case that are left to the discretion of the judge or jury, like damages for pain and suffering.

Although the term is employed in both contracts and tort cases, it’s most ordinarily utilized in jurisprudence . Under the law within the US and in most locations, parties can create their own private law by creating a contract. Within the contract, each party exchanges something useful with the opposite , albeit that something useful is simply a promise to try to to something at a Idler date. The court will enforce lhe conlracl made by the parties and can penalize an individual who breaches said contract.

When a breach occurs, damages are appropriate. Damages are lhye amount of cash necessary to place the plaintiff within the same position he would are in except for the breach. Generally, the plaintiff is awarded the dollar value that he can prove he actually lost as a results of the breach. for instance , if the plaintiff contracted to shop for one widget at $10 US Dollars (USD) then , as a results of a contract breach, he had to pay $12 USD to shop for that widget from somebody else , then he could sue the one that breached the contract for $2 USD — his actual loss as a results of the breach.

Sometimes, it are often difficult for a court to work out what damage award is acceptable . this is often very true since speculative losses aren’t considered. for instance , if an individual was planning an enormous sale at his haberdashery and therefore the suppliers didn’t deliver in time, the plaintiff cannot recover the complete amount of cash he believes he would have made at the sale, since there’s no proof such an amount would have actually been made.

Because calculating damages are often difficult, the concept of unliquidated damages and liquidated damages has inherit play. Unliquidated damages may be a broader term, wont to describe situations during which it’s unclear exactly what proportion the plaintiff lost and can recover. Often, in cases where damages are likely to be very speculative, a liquidated damages clause is included. This removes the matter of unliquidated damages because the parties to the contract previously agreed on what proportion must be paid within the event of a breach.

Filling The Tender By Contractor

A contract or tender document in industry is an agreement between two parties which they shall be legally binding with reference to the obligations of every party to the opposite and their liabilities. The contract thus binds the contractor to construct the works as defined, and therefore the employer to buy them within the manner and timing began .

As engineering works are often complex, involving the contractor in many many different operations using many various materials and made items, including employment of a good sort of specialists, the documents defining the contract are complex and comprehensive. The task of preparing them for tendering therefore warrants close attention to detail and uniformity of approach, so on achieve a coherent set of documents which forms an unambiguous and manageable contract. A typical set of documents prepared for tendering will include the subsequent.

✓ Instructions to tender : These tell the contractor where and when he must deliver his tender and what matters he must fill in to supply information on guarantees, bond, proposed methods for construction, etc. The instructions can also inform him of things which can be supplied by the employer, and sources of materials he should use (e.g. source of filling for earthworks construction,


✓ General and particular conditions of contract : the overall conditions of contract may comprise any of the ‘standard’ sorts of contract. the actual conditions adopted may contain amendments or additions that the employer wishes to form to the quality conditions. Usually the quality conditions (which are available in printed form) aren’t reproduced within the tender documents but they’re going to be named by specific reference and a schedule will show what changes are made to them.

Procedure Of Opening Tender

Each slep of the tendering process is explained below :

• Obtaining Request for Tender documentation.

• Preparing Responses.

• Addressing the choice Requirements.

• Changing to Requests.

• Submitting Offers.

• Changing your Offer.

• Evaluation and Award.

• Tender Feedback.

• Complaints and Feedback

The opening of tenders should happen immediately after the deadline for submission and therefore the following must be addressed:

• An accessible room of suitable size, laid out in the tender documents, must be reserved for the opening of tenders.

• The PM or his delegate should chair the tender opening.

• Copies of all receipts issued must be delivered to the tender opening.

• All tenderer’s representatives present at the opening must sign a register of attendance (STD: Standard Tender Evaluation Format, Annex 4 – Register of Attendance at Tender Opening).

• All tenders received should be placed on a table and therefore the number of tender envelopes must be according to the quantity of receipts issued. If there’s a discrepancy NO tenders must be opened until the discrepancy is resolved and every one tenders received are within the room.

• The envelopes received should be grouped into the subsequent categories:

• Tenders received before the submission deadline.

• Modifications received before the deadline.

 • withdrawals received before the deadline.

 • Tenders, modifications and withdrawals received after the deadline.

• A checklist of the things to be inspected and recorded for every tender because it is opened is printed in STD: Standard Tender Evaluation Format, Annex 2 – Checklist for Opening of Tenders.

 • Tenders, modifications and withdrawals received after the deadline must not be opened. The outer envelope of those late tenders and modifications should be opened and therefore the names of the tenderers submitting late tenders or modifications read out and recorded. The inner envelopes of all late submissions must be returned unopened to the respective tenderers.

• Withdrawal notices received before the deadline should be opened next and skim out and recorded. Tenders subject to a withdrawal notice must not be opened and must be returned unopened to the respective tenderers.

 • All tenders and modifications received before the deadline must be opened next; for every tender opened the things on the checklist (Annex 2) should be checked and skim out aloud. The tenderer’s names, tender withdrawal or modification, tender price, discounts, alternative, the presence or absence of requisite tender security and such other details because the Purchaser, at its discretion, may consider appropriate, should be announced and recorded at the opening. it’s important for all , discounts and alternatives to be read out. Tender prices and discounts which aren’t read oul at tender openings can’t be considered within the subsequent evaluation.

• No tender shall be rejected or an opinion/judgement voiced on its responsiveness, at the tender opening, apart from late tenders; the Purchaser must prepare minutes of the tender opening. The minutes should be within the format outline in STD: Standard Tender Evalualion Format, Annex 3 – Minutes of Tender Opening; —the minutes of tender opening should be completed as soon as possible after the tender opening and a replica must be sent to all or any tenderers which submitted tenders. If the contract is to the Bank’s prior review, a replica of the minutes must be sent to the Bank as soon as they’re completed.

—directly after the opening of tenders, all tenders that were opened must be stored safely and confidentially and be made available only to those directly involved within the evaluation process.

Unbalanced Tender

The following proucedure is followed:

(i) When there’s a difference between the rates in figures and in words, the rates which correspond to the amounts figured out by the contractor, is taken as correct.

(ii) When the quantity of an item isn’t figured out by the contractor or it doesn’t correspond willi lhe rates written either in figures or in words, then the speed quoted by the contractor in words taken as correct.

(iii) When the speed quoted by the Contractor in figures and in words tallies but the quantity isn’t figured out correctly, the rates quoted by the contractor is taken as correct and not the quantity . within the case of percentage Rate Tender, the contractors are required to quote their rates both in amount also as within the percentage below/above the rates entered within the Schedule. In within the event of arithmetical error committed in understanding the quantity by the contractor, the tendered percentage and not the quantity should be taken under consideration .


Ring Formation

• Ring/Cartel formation among the bidders results in elimination of competition and award of contract at exorbitant rates.

• sometimes it’s through with active collusion with officers concerned.

• The ring formation becomes more important just in case of limited tenders thus an effort chould be made to spot sister concerns.

• just in case of suspected ring formation with high rates, tender cancellation is advisable.