Contractors are the decision makers when it comes to the bidding for construction tenders. Numerous factors go into consideration when deciding to bid or not to bid. Hardly can such a decision be made in a limited time and therefore decision making is dependent on instincts, experience and hypothesizing. A lot of research has been done on the decision-making process yet. Several factors affecting the bid or no bid decision-making process have been uncovered. Before any other activity, the decision to bid or not to bid is the first decision a large number of contractors have to make. This report is meant to disclose to the reader the significant factors in consideration when bidding for different construction projects plus material that can be used by any construction company to make a plan to offer competitively with others involved.
Given the law of natural selection, it is a game of win tenders to survive in the building industry. Before any decisions can be made on any strategies to use to win the bidding process, the contractor's decision on whether to bid or not to bid is most important at this particular stage of the tendering process. Some factors weigh heavily in the decision-making process; these include; human capital, estimated time and the amount likely to be spent by the corporation. On an invitation to make a bid on a construction project, a company's decision is dependent on its experience in the field. Upon deciding to bid, bidding files are prepared. During this process, the company is going to learn either way in case it wins or loses the tender. Upon winning the bid, the contractor is in a position to learn from the tendering process. In case of a loss, the contractor determines the client's response.
Decisions to be made on the tendering process are not entirely dependent on emerging victorious at the end of the bidding process, but the company's ability to follow through the agreed contract and ensure completion of the project as stipulated. Bid making is not easy as an opportunity is lost once a contractor chooses not to bid which eventually may prove rueful. Making a miscalculated decision puts the company's reputation in jeopardy as well as losses concerning capital.
First, the contractor's bidding decision is always dependent on the demand for work or opportunity. If a company happens to have a current running project, it may choose not to bid given the state of their 'hands being full' or occupied by some other work. When there a little workload and a variety of resources available for use, this means the company can go ahead to bid for work (Ensler, 1997, pg. 78). For any business venture to happen, evaluation of the company's monetary value is essential. Bidding for big projects that might lead the company into bankruptcy is not prudent on the part of the tender decision makers.
Another area of the company under consideration is the strength of the company. Big and well-experienced firms are much more capable of achieving higher performance when dealing with massive construction projects (Ensler, 1997, pg. 86). Consideration must be made to ensure the company is capable of handling all the client demands, stay within the budget of the project, experienced with projects of equal measure, easy access to subcontractors, availability of material vendors and the amount of work to be subcontracted. An experienced contractor will show better skills in management, design and even better knowledge of the site conditions. Subcontracting is dependent on the contractor managerial skills; the more substantial the amount of work subcontracted the higher his or her administrative skills. The contractor must play to his strengths before bidding for any tender work and focus more on his areas of expertise that is whether the required resources and experienced needed are the exact tools in his bag. A contractor's most important duty is to tell using his experience and intuition the probability of achieving the quality of work needed by the client within the time estimation (Farrow, 1984, pg 353).
As a business man, a contractor's primary goal is to check for possibilities of ensuring the profitability of the project in the present client conditions for the project. The vastness and duration of a project are some factors that relate directly to the contractor's potentiality to get the job done. His capacity is based on his financial capabilities, the number of laborers and equipment available as well as his managerial expertise (Boyce, 2002, pg 234). Time allocation for project completion purely requires high managerial skills as late work is consequential as the contractor may be liable to a fine, conflict between interested parties and lastly, his reputation may, as a result, be tainted. Payment of the cash for expenditure should coincide precisely with the contractor's layout plans. Any delay may cause losses leading to collapse of the project as the construction company may be driven into indebtedness (Woodhams, 2001, pg 123).
The contractor is tasked with checking carefully the risks a project is likely to encounter. Threats involved in a project are subject to the contract conditions. Before any decision making the contractor should be able to factor in the project time available, the method used to procure, contract specifications, penalties and dispute resolution methods. A contractor is also more concern with accessibility to the right amount of cash to guarantee the functionality of the project. Decisions must be made whether payments will be lump-sum or not. To avoid any payment conflicts during project construction, it is quite essential for the contractor to do a background check on the client's financial might as well as how fast payment can be made for work to commence. He is also liable to check the resources he requires such as qualified workforce, tools, and equipment. It is in his best interest to carefully go through the laws and regulations of the project location on a code of conduct regarding taxes, worker payment rates and obtaining permits.
Bid making decision should be based on the competition the company is likely to face. This can be looked at from two perspectives, which is, based on the present market conditions and a holistic look at the project at hand. The contractor at this stage is concern with the number of competitors and the achievements of the competitors. Specific factors are influential in the tender winning bid such as a contractor's familiarity with the job, the competition involved or even clients themselves.
This is a stage of the tendering process whose purpose is to identify; the time frame for the construction activities, methods to be used in construction, what resources are required in the construction work and how to acquire them. Through the programme, the contractor aims to achieve quality work at low cost within a conducive time frame (Brook, 2004, pg 68). The time estimator is then able to use the programme to estimate whether the scheduled time frame can be achieved. Other structures termed as preliminaries are evaluated on how long it will take to maintain them on the construction site. The estimator with the help of the programme tries to forecast how the money will be distributed in the stipulated time. If the time scheduled in the tender documentation differs from that stated in the programme, the estimator, therefore, tries to fit in the additional costs in the tender bid (Hackett and Statham, n.d.). It requires an estimator with some strategic options. If by chance, the schedule in the tender documentation is a shorter one, the estimator is expected to balance resources to ensure a shorter time span can be achieved in the programme, for example increasing the number of working hours for the construction staff which means increased wages. This says the contractor is going to incur some additional costs to cover the balance on a schedule which the estimator tries to figure out how much this is. The contractor is obligated to finish the construction depending on the client's programme to enhance and maintain his reputation.
In the pre-tender programme, the contractor should state the policies to use to get some time extension on the project. For the client to adjust the time scale, the exact costs to ensure completion of construction work in good must be stated otherwise the contractor's bid may lose its competitiveness (Skirtmore et al. 1987, pg. 27). This may cause the client to look elsewhere for contractors who can deliver the work in good time. At times the contractor is forced to negotiate with the client on signing a completion date amendment on signing the binding contract. Contractors at times also have a choice to make on different degrees of emphasis to place on tenders depending on its benefits to the company (Smith, 1995, pg 203). This affects the number of resources a contractor will dedicate towards a particular project in preparation for the bidding process. A contractor must put into consideration some factors before deciding on how much resources to allocate. He takes a look at the size and type of this construction work. It is also to his advantage how much knowledge he has of the upcoming project. In general, the amount of detail information required in the pre-tender process is quite little compared to that of the post-contract stage after successful bidding by the contractor (Smith, 1995, pg 203). Any pre-tender programme must put to consideration the following; specifications on completion time, accessibility, and workability of the site, type of construction to be applied as well as work progression (Massey, 1992, pg 437). Besides the programme, analysis of the resources and statement on methods on first equipment to be worked with are required. Planning must be done for the site offices, access roads, and other temporary structures by making a drawing to deduce pricing for these items. It is crucial for the estimator to provide straightforward and concise estimated work to the construction management. This is because of the limited time to analyze the document and try out its implementation.
Various planning techniques are used during the pre-tender stage in summary of very fundamental issues that emerge during estimation and tendering (Cook, 1990, pg. 152). For example, bar charts are used more like a programme because of their pure nature. Network analysis is another form of schedule which is complicated and time wasting. It requires expert knowledge of computer programmes like CPM or PERT. The line of balance, a technique used in construction with several repetitions due to the complex nature of bar graphs and network analysis in such scenarios.
Ref No :
Ref No : T364 Date: 15.04.18
J F M A M J J A S O N D J F M A M J
Mobilisation Survey and material testing Engineers accommodation Site clearance Dredging Reclamation wet fill Reclamation dry fill Leveling Slope protection Unloading Jett Testing and deck slab concrete Finishes Breakwater Concreting Demobilization
CALCULATIONS FOR THE MATERIALS AND EQUIPMENT
Site clearance and leveling
N/B All calculations are in Euros
Assume that the leveling will take 5days working 8 hours a day
Leveling 90000m2 of ground-
Labor -2505= 500, Crew -2805= 800, Grader the rate is 30days -5/301500=250, Bulldozer -18005/30= 300 Total= 1850
Survey and topography
Assume a crew of 4 people and eight laborers. The survey exercise will take 18months approximately 540 days.
Crew-4100540= 216000, Labor-850540= 216000 Total = 432000
Accommodation for engineers and laborers
We will provide ten housing blocks for the professional workers. The units will be two bedroom houses. T...
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