Issues to be aware of when tendering for building contracts
- from the contractors perspective
Any contractor tendering for building contracts needs to consider a
number of issues beforehand. This article aims to discuss these issues
in a brief and concise manner. The areas mentioned are general
therefore I would recommend that the reader seeks local advice before
embarking on such a business venture.
There are two types of tendering process - Tenders are usually carried
out by way of a single or two stage process
The single-stage tender process consists of:
An invitation to tender.
A tender.
A valuation.
The award of the contract.
Using this process can be quicker than the two stage process; however
it does involve a great deal of initial work to make sure that the
tender documents are all complete.
The more flexible approach to take is the two-stage tender process.
Tenders are presented as a projected work package, by submitting:
Preliminary costs.
Profit and overheads costs.
Projected build period.
The preferred contractor then proceeds to the second stage, where the
contractor will work with the design team to come up with a final
design, as well as a program and final price just before signing the
contract.
Supply as much information as possible
It is in everyone's interest to supply as much information as
possible. This will enable the contractor, from the beginning, to
evaluate thoroughly the risks attached to the contract and to price
them correctly. In addition the employer will get a much more reliable
price.
The contractor should ensure that the tender documents include the
following:
1.Full details of the contract to be
entered into and the proposed contract amendments.
2.A set of full documentation that the
successful contractor will be entering into. Such as
appointments, warranties, performance bonds, parent company guarantees,
novation agreements etc.
3. Features of the insurance and levels
that the contractor is required to retain.
The employer should provide from the beginning any
information that might put the contractor at risk in order to be
presented with a reliable tender price.
In order to be at an advantage the contractor should review the tender
documents thoroughly. This involves a legal review usually by outside
lawyers and a technical review normally by in-house employees.
Contract Issues
Clarity of the basis on which the parties are working will ensure that
there will be no misunderstanding from the outset. Invariably disputes
lead to added expenditure.
About the Author:
Jackie is a Chartered Surveyor, Property Investor, Property
Coach/Mentor, Motivational Speaker, Entrepreneur. She is the Author of
soon to be released - Secrets of the Astute Property Investor.
Jackie
is the owner of several companies and is a seasoned property investor
who has built up a healthy property portfolio.
To Contact Jackie:
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