Project on Bid Process

8/10/2019 Project on Bid Process

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CHAPTER NO:-1

1.Introduction:-

1.1 General:-

The project often get delayed and show time and cost overruns as a consequence. The

importance of bidding document, good biding process and the selection of contractor are

some of the important prerequisites for the successful completion of a project. The aim of the

study was to identify factors in bid process management that may lead to project success.

Subsequently, these factors were ranked by expert for their importance and ability to

influence the project results. To brainstorming sessions were organized for identifying

factors, One with a government organization which executes a large number of public

projects mainly through cost based selection and second with a private developer

organization which hires contractor through quality based selection process. Twelve factor

were shortlisted through this process and they were given importance ranking were

experienced professionals. The mean value and the descriptive statistics were worked out to

rank the factors. Top five factors in the bidding process, identified by using this process are

specification , special condition are contract, overall and similar experience, award criteria

and estimates.

Government officials in the developing countries face public ire for delay in project

execution and resultant cost increase. Delay and cost overruns occur in private projects also,

though the consequences of delay are different. Top five factors featured in the list are

insufficient equipment, inaccurate time estimate, payment to the contractors, change orders,

and inaccurate cost estimate. Many factors influence failure and success of a project and

contractor selection is one of the prominent reasons amongst that.The importance of selecting

right contractor and having proper bid documents is recognized by the industry and also by

the researchers. Standard bidding documents have been developed by the owners all over the

world or they have adopted standard documents developed by world Bank, Asian

Development Banks, FIDIC and others. However, in the developing countries, bidding

documents and procedures are yet to be standardized. Even where the process has been

standardized, the weightage of different selection criteria is a matter of debate.


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Contractors must consider many factors when they develop their bidding strategies.

Bought on found in his survey (with useable responses from 126 general construction

contractors from around the Words) that the factors in developing a bidding strategy

(in descending order of importance to the contractors) are:

1. Clearness and detail of specifications

2. Past experience with similar work

3. Confidence in subcontractor bids

4. Location of project

5. Number of competitors

6. Duration of project

7. Workload

8. Market condition (busy or slow)

9. Size of bid

10. Opportunity for follow-on work

11. Relationship with architect/owner

12. Competitors bid history

13. Confidence in external events (interest rates, inflation, etc.)

8.1 Necessity of Bid process Management

The main objectives of the Bid process management are:

Choose suitable partner on best possible terms

Choose partner with skills, experience and resources

Secure desired service improvement & efficiency

In todays world, the bid process management has emerged as one of the main activities

of project management and adequate importance is attached while scheduling of the project

itself. Due to rapid increase in the project complexities, a delivery partner can be sought right

at the beginning or at any stages of project. Based on the involvement a project partner may

be classified as under:

Owners Consultants

Programme / Process / Project Management


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Activity Consultants

Piece-meal Constructions

EPC/Turnkey

BOT/BOOT/BOO etc

Scope Of the project

The aim of the study was to identify factors in the bid process management that may lead to

project success. Subsequently, These actors were ranked by experts for their importance and

ability to influence the project results.

In this project the main top factors in construction bidding process, identified by using

this process are specifications, special conditions of contract, overall and similar experience,

award criteria and estimates. This above factors which affect the effective bidding process

and communication will work out from the various questionnaire surveys of different

projects. For this purpose questionnaire are designed accordingly and respective answers

should be collect from the Government and private project.

After the overall study of the projects to give the effective suggestion choosing the partnerson the best suitable turns and partners with skills, experience and resources.

Objective

1) To study concept of bidding of construction project.

2) To contractor selection vary between Public and Private projects.

3) To Analysis the data Educational profile and Work experience on the basis of their

organizations.

4) To study the bid process management on various present construction sites.

5) To discuss and give the effective suggestion on projects often get delayed and increase the

cost.

Methodology


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1) The preliminary data which required for the project will be collect from the various

studies which are already carried out upon this construction bidding. Referring to

previous research, this study identified by public and private project of project

finalization. Efficient bidding is the most important term in project finalization process.

2) To brainstorming sessions were organized for identifying factors, One with a

government organization which executes a large number of public projects mainly

through cost based selection and second with a private developer organization which

hires contractor through quality based selection process.

3) From the above overall study there are twelve factors were shortlisted through this

process and they were given importance ranking by experienced professionals, for

project finalization.

Table 1:Important Factors In Bid Process Management

SI. No. Factors

1 Bidding process

1.1 Splitting the contract packages/ Work Packages

1.2 Sequence of awarding contracts

1.3 Award Criteria

2 Bidding Documents

2.1 Bills of Quantities &Estimated cost

2.2 Tender Drawings

2.3 Specifications

2.4 Special Conditions of contract

2.5 Standard Bidding &contract Document

3 Contractor Qualification Criteria

3.1 Overall &Similar Experience

3.2 Financial Capacity

3.3 Bid Capacity

3.4 Proposed development of tools, equipment& plant

for given project

4) The whole bid process management study applies on live construction private or

government projects. And what are the actual bidding on live work and theoretical


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studies. On the live project on bidding process questionnaire survey should be carried

out.

5)

In the last step of the project, the analysis carry out on the above theoretical study and

the questionnaire survey, the suggestion if any given to the management team. As the

management can better understand and improve the bidding process management by

selection of contractor, education profile, work experience, count and ranking were

calculated by data analysis.

1.1. ORGANIZATION OF PROJECT

The thesis format follows the logical steps of literature review, establishing the

questionnaires, developing the methodology, gathering and analyzing data and

drawing conclusions. The project stage-I involves following chapters:

1)

The second chapter deals with the literature survey related to the construction

bidding in private and public project in construction industry. This review determined

the context of the research study and positioned this work relative to previous

research. This chapter will help to selection of contractor on the basic of pre-

qualification and many previous skills and knowledge.

2)

The third chapter deals with to study bid process management for finalization of

construction project.This chapter will provide total information about the role of

coordination in construction industry in India and effect of goal achievement on

performance of project.

3) The fourth chapter deals with the success of project finalization for construction

project. In this chapter the questionnaire was designed on the basis of bid process

management. The questionnaires are designed on the basis of eight coordination

methods.

The data collection will be obtained from the designed questionnaire. For this data

collection of two major construction projects were selected. The observed result is

tabulated and thereafter the result analysis is carried out. The last step of the project is

to give suggestion for successful bid process management for project finalization.


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CHAPTER 2

2. LITERATURE SURVEY

2.1. INTRODUCTION

Generally, successful completion of construction projects requires many important

processes and one of them is the bidding process. During the bidding process,

selecting the most appropriate contractors to execute the project seems to be quite

difficult. Contractor selection plays a vital role in the overall success of any construction

project. Clients generally need the best criteria in selecting contractors in order to get

best results in term of cost, time, and quality for their projects. Historically, clients

usually award the contract to the lowest bidder during tendering. Despite the guidelines

that exist in the literature in selecting main contractors; in real practice, Other country

construction clients individually have their preferred criteria different from those

obtained in the literature. The main threat here is that clients do make costly mistakes in

their decisions to award the contracts to unqualified contractors and this would

eventually have damaging consequences on the project and clients investment. It

therefore became necessary to examine the different criteria adopted by clients in

selection contractors in order to find out the most criteria that clients should focus on

when awarding construction contracts to main contractors. To this regard, this paper is

aimed at identifying and ranking the actual criteria used by clients in real practice for the

selection of main contractors in India.

Bidding Process

Traditional Procurement system involve pre-qualification ,short-listing ,bid evaluation

processes including those involving designbuild types of

contracts(palaneeswaran,20000).Overall bidding process is linear and compartmentalized and

follows design ,bid and construction process (Hallowell,2009).In the traditional system ,

client or owner hires the designer who prepares the designs and estimates. The client floats

tenders based on this estimates and drawings . Interested contractors bid for the project and

they are typically selected by the least cost criteria amongst all technically qualified

contractors .This least cost criterion is widely debated but used selection method at least in

the developing countries such as India.


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organizations where they are concerned with the top quality. In government organizations,

when there are mini projects with the same departments and that too on a regular basis, the

maintain the list of prequalified bidders. The shortlisted bidders are generally asked to submit

financial bid for the given project. This reduces the time of technical evaluation.

Conceptunal Model For Contractor Selection

A conceptual model has been structured for contractor selection including bid price

and non-price criteria in relation to Article 40 of PPL 4734 and also taking into account the

needs of public clients. In structuring the model, most of non-price evaluation criteria that

may not

be translated into numerical impact data are eliminated in order to avoid the subjective

evaluation of contractors and others are grouped according to similarities and relations

between them. In the model non-price criteria are grouped at 9 main headings as Contractors

Organization, Past Performance, Past Experience, Plant and Equipment, Personnel, Project

Management, Quality Management, Health and Safety Management, Environmental

Management. Each main criteria has its own sub-criteria as shown in Table 1. Price criteria

refers to the lowest cost in evaluation process. The model enables the user to designate the

weighting of non-price and price criteria depending on the needs and wants of the clients

and/or projects.

Non-price evaluation criteria for contractor selection given below

Contractors Organization

Past Performance

Past Experience

Plant and Equipment

Personnel

Project Management

Quality Management

Health and Safety Management

Environmental

Management


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FACTORS AFFECTING THE BID/NO BID DECISION

The study aim and objectives necessitated the identification of the various factors that

have been found to influence the bid / no bid decision. The review of the literature resulted in

identifying 94 potential factors affecting a contractors bid/ no bid decision. These 94 factorswere drawn together from the sources shown in Table

1. The factors identified were then divided to ten groups. The groups were developed on an

intuitive issues, including project characteristics, business benefits, the client characteristics,

the contract, project finance, company characteristics/ situation, firms' previous experience,

bidding situation, economic situation, and competition.

Factors affecting the bid & identified from the literature review

1 Project characteristics:

1. Size of contract in SR

2. Duration of the project

3. Type of project

4. Job start time

5. Methods of construction (manually, mechanically)

6. Location of the project

7. Type of equipment required

8. Type of labour required

9. Site clearance of obstruction

10. Degree of build ability

11. Site accessibility.

12. The projects' stakeholders

13. Design quality

14. Design team

15. Local climate

16. Public exposure

17. Degree of technological difficulties

18. Safety hazards

19. Completeness of drawings and specification

19. Degree of difficulties


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20. Type of procurement methods

21. Degree of possible alternative design to

reduce cost

22. Expecting date of commencing

23. Pubic objection

2 Business benefits:

1. The benefits expected in terms of the

company reputation

2. Need for continuity in employment of key

personal and work force

3. Establishing long relationship with the client

3 The client characteristics:

1. Local custom

2. Relationship with the owner

3. The client reputation among other contractors,

with whom they had worked

4. The client requirements

5. Owner (Private, Public)

6. Prompt payment habit of the client

7. The client financial capacity

8. Size of client

4 The contract:

1. Type of contract

2. Clearness of the work and specifications

3. The ability of modifying the contract

4. The ability of portion subcontracted to others

5. Fines for delay

6. Type and number of supervisory and labor required

7. Consultants interpretation of the specification

8. Use of nominated sub-contractor

9. The contract special requirements

10. Contract conditions


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5 Project finance

1. Original price estimated by the client

2. Work capital required to start the job

3. The possibility of delay or shortage on payment

4. Project cash flow

5. The project mark-up size

6. Percentage of insurance premium

7. Anticipated value of liquidated damage

8. Tax liability

9. Financial goals of the company

10. Degree of difficulties in obtaining bank loan

11. Market share

6 Company characteristics/situation

1. Availability of required cash

2. Ability of doing the job

3. Availability of required equipment

4. Availability of qualified human resources

5. Uncertainty in cost estimate

6. Need for work

7. General (office) overhead

8. Current work load

9. Reliability level of subcontractors

10. The project is matching the company strategy and future vision

11. Strength in industry

12. Specific features that provide competitive advantage

13. Availability of qualified sub-contractors

14. Familiarity with site condition

15. Strength of business partner/ subsidiaries

16. Company ability of design involvement and innovation

7 Firms' previous experience

1. Past experience with similar project

2. Past profit in similar job


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CHAPTER NO 3

To Contractor Selection Vary Between Public And Private

Projects.Introduction

Project on Bid Process

Documents

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