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Which is the Tender Figure?

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Re: Which is the Tender Figure?

Post  RJM on Thu Jul 22, 2010 5:26 pm

Tumaini, you are most welcome.

Tumaini wrote.

Corrected price and any other additions or deductions resulting from negotitations constitute BID PRICE.

Under current legislation, not all cases corrected and any +/- resulting from negotiation constitute Tender Figure as not all cases we are allowed to negotiate prices [R95(2) (c)/97/2005 unless otherwise is as a result of R95(1)(b)/97/2005.

What is your take on this?

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Tender Price

Post  Tumaini on Thu Jul 22, 2010 3:33 pm

The cup is half full not half empty though the quantity is the same!
PMU [or evaluation committees or negotiation team and for that matter tender board] is not composed of angles and so is the populace. We must have a belief in systems we constitute - that is the moral of governance. Yet, whenever we choose to for whatever circumsatnces, let us improve the systems in place [laws, procedures, circulars etc etc] to address weakneses we know or suspect. Corrected price and any other additions or deductions resulting from negotitations constitute BID PRICE.

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Re: Which is the Tender Figure?

Post  RSM on Wed Jun 02, 2010 9:21 pm

RJM

May be you did not pick up what I explained earlier. Let me be more elaborate:

1. You first check for arithmetic errors.

2. If there are any errors, you communicate to the bidder pointing out the errors but asking for a confirmation, that despite the error, they are willing to stand by the tender figure appearing in the form of tender. Of course if they choose not to stand by the figure in the form of tender they forfeit their bid security.

3. Once acceptance to stand by the figure in the form of tender is granted, during signing of the contract all the rates in the BOQ are adjusted by the percentage deviation. For example if the correction shows a 10% negative deviation from the figure in the form of tender, then every rate in the BOQ will be reduced by 10%. In case of postive variation addition will be done to the rates appearing in the BOQ.

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Re: Which is the Tender Figure?

Post  RJM on Wed Jun 02, 2010 8:17 pm

A neutral position is therefore to stand by the Figure appearing in the Form of tender regardless of whether there is positive or negative correction.

RSM, suppose there is arithmetic errors in the tender and Employer stand by the figure appearing in the Form of Tender, which final figure will the Employer pay at the end of contract execution? The one in the Form of Tender or result from the certificates or invoices?

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Re: Which is the Tender Figure?

Post  RSM on Wed Jun 02, 2010 6:59 pm

RSM,

I think the issue of positive or negative is immaterial because even under the current system the corrections can increase or decrease the tender figure - On one hand, when there is an increase the tender figure as a result of corrections Client will not be happy especially if the tender ends up in being awarded to this particular bidder. On the other hand, the Client seems to be on an advantegous side if there is reduction in tender figure as a result of corrections. A neutral position is therefore to stand by the Figure appearing in the Form of tender regardless of whether there is positive or negative correction.

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Re: Which is the Tender Figure?

Post  GadielCM on Wed Jun 02, 2010 2:44 pm

In the Forum,
We have to talk and reinforce the Integrity school in tender proceeding so as to avoid all unethical practices between bidders against Evaluation team and against PMU.

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Re: Which is the Tender Figure?

Post  RJM on Tue Jun 01, 2010 6:52 pm

In the old school, corrections would normally be done and the bidder will be given only one chance to stand by his tender figure which appears in the form of tender. If he refuses, he forfeits his bid security. If he agrees, all his rates in the BOQ are then adjusted by the percentage of the difference and they become binding during contract implementation.

RSM and Chilongani, I think the old school rule will be advantageous to the Client if the errors is +Ve errors which would have been corrected by reducing [-Ve adjustment] from the tender figure [-Ve adjust by the percentage of the difference]. What would have been consequences if the errors is -Ve errors whereby the adjustment by the percentage of the difference would have done by adding from the tender figure? OR Assumption was that always the arithmetic errors will +Ve erros.

How about New School???

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Re: Which is the Tender Figure?

Post  RSM on Tue Jun 01, 2010 5:36 pm

Chilongani

Three issues come from your recent posting:

1. You are sounding as if PMU is made of Angels - the change in pages is a collaborative effort between PMU staff and Evaluation Team Members. Everything actually depends on the integrity of the people - and this is why it is emphasized that the Head of PE to appoint Evaluation Committee members and ensure that they possess not only technical expertise but also the necessary integrity.

2. You say you can sign all pages with price schedules - you seem to be underestimating some tenders - particucularly those of works - where you can have hundred of pages of the Bills of Quantities. The usual practice is to sign those pages where they show element totals. It would imposible to sign each page of the BOQ. The pages which are changed are those that have not been signed.

3. Indeed the old school puts a responsibility to the bidder to ensure correctness of his/her bid. I have participated in the bidding process myself. The figure we transfer to the form of tender is not a result of multiplication and addition in the BOQ alone. It is a figure that I am comfortable that I can execute the project and most contractors have that sense of how much it is likely to cost before they even start to price the items.

I will give an example- Suppose the best estimate of the project is Tshs 5.6 billion- and I make errors in the multiplication and additions and get the total to be Tshs. 4.6 billion, which is 1 billion less, will I go and transfer that figure to the Form of Tender?

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Re: Which is the Tender Figure?

Post  Michael Chilongani on Tue Jun 01, 2010 2:05 pm

RSM
The scenario of unethical Evaluation team members making dubious business is quite possible. However, it is the responsibility of PMU to enhance some controls by way checks and balances. This can be achieved by giving the evaluation team only copies. The origin bids should be kept in safe custody by PMU. During Bid opening ceremony, members of the committee MUST sign in all pages with price schedules. This is a tedious job but experience has shown that the exercise is quite vital.

PMU during review must counter check all the corrections using the Origin Bid document. In case there is any discrepancy in copies as compared to the origin, then the origin prevails. The problem is when the ET and PMU join forces by colluding.

The old school rule seems to instil some sense of responsibility to bidders. Bidders are very tricky and some times errors may be a result of some deliberate manipulations with the aim of wining the tender or a buying into the job strategy after which numerous variation are loaded.

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Re: Which is the Tender Figure?

Post  RSM on Mon May 31, 2010 7:53 pm

RJM

Normally dubious means are used to change pages during the evaluation stage whereby some unethical members of evaluation team can allow a bidder to substitute pages of his submission.

In the old school, corrections would normally be done and the bidder will be given only one chance to stand by his tender figure which appears in the form of tender. If he refuses, he forfeits his bid security. If he agrees, all his rates in the BOQ are then adjusted by the percentage of the difference and they become binding during contract implementation.

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Re: Which is the Tender Figure?

Post  RJM on Mon May 31, 2010 6:55 pm

RSM
Regarding the "using dubious mean" to change pages of the submitted BOQ so that eventual corrections put him in an advantageous position. At what stage could this be possible?

In addition to what GadielCM put forward, the corrected figure is normal taking as tender figure because this is what PE is going to pay once the contract is executed based on quantities and unit rate quoted the bidder. If we examine the Standard Bidding Documents particularly Clause relating to Correction of Errors, there is penalty attached in case bidder does not accept the corrected amount including forfeiture of bid security or execute bid securing declaration. Accordingly, R90(11)(a) require PEs to promptly notify the bidder in case of any arithmetic errors. In this case bidder is obliged to accept or decline. The consequence of decline is what provided in the referred correction of errors. Accepting means that bidder is reviving his offer [in the form of tender] to the corrected figure which ultimately will be paid by the PE otherwise corrected figure can be construed as counter-offer.

RSM, I have the experience whereby PE relied on the tender figure in form of tender which was 122,000,000 but they end up paying 188,900,000 after final account. This was disputed by PE that they are supposed to pay what was in the form of tender and in the letter of acceptance. What is the lesson here???

On the other hand, there is tendency of the PE not notifying bidders with arithmetic errors until during negotiation stage and bidder refuse to accept, can this be cause construed as counter-offer? Under this circumstance, can PE forfeit bid security or execute bid securing declaration?? What is the right time to notify the bidders????

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Re: Which is the Tender Figure?

Post  RSM on Mon May 31, 2010 5:55 pm

RJM

I concur, that is the current procedure where we take the corrected tender Figure. But using this practice there is a possibility for one "using dubious means" to change his pages of the submitted BOQ so that eventual corrections puts him in an advantegous position.

I

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Which is the Tender Figure?

Post  GadielCM on Mon May 31, 2010 4:31 pm

RSM,
When you talk about tender, real, your talking about the offer of the bidder.So at the bid opening the figure appear in the form of bid is the tender figure which read out during tender opening.

But the tender figure after evaluation is the one which already corrected by evaluation committee and is the one which to be in the contract with the bidder after all neccessary approval and where possible after negotiation.

Thus, that why the acceptance letter in the bidding document, say, ''..........as corrected and modified in accordance with the Instructions to Bidders is hearby accepted by us.'' And this acceptance letter is the part of contract, so the contract amount is finally tender figure.

I submit


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Which is the Tender Figure?

Post  RSM on Fri May 28, 2010 12:56 pm

Forum members;

I am putting up this new topic deliberately as it may enable us to reflect the current provisions in the bidding documents with regard to the correction of arithmetic errors.

Let me put my question. Which figure should be taken to be the tender figure- the one appearing in the Form of Tender or the one obtained after correction of arithmetic errors?


Last edited by RSM on Mon May 31, 2010 5:34 pm; edited 1 time in total

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