Quality of tender documents: case studies from the UK

Tendering is one of the stages in construction procurement that requires extensive information and documents exchange. However, tender documents are not always clear in practice. The aim of this study was to ascertain the clarity and adequacy of tender documents used in practice. Access was negotiated into two UK construction firms and the whole tender process for two projects was shadowed for 6-7 weeks in each firm using an ethnographic approach. A significant amount of tender queries, amendments and addenda were recorded. This showed that quality of tender documentation is still a problem in construction despite the existence of standards like Co-ordinated Project Information (1987) and British Standard 1192 (1984 and 1990) that are meant to help in producing clear and consistent project information. Poor quality tender documents are a source of inaccurate estimates, claims and disputes on contracts. Six recommendations are presented to help in improving the quality of tender documentation. Further research is needed into the recommendations to help improve the quality of tender documents, perhaps in conjunction with an industry-wide investigation into the level of incorporation of CPI principles in practice

Design and Implementation of Administration Participation Tender in PT Kencana Alam Putra

PT Kencana Alam Putra is a company engaged in contractors who follow the tender of several organizers. The administration process of tender participation encounters some obstacles from checking the tender's news to the completion of prerequisite documents, such as the recording and providing tender's information which still uses manual processes, overdue to get the approval from the president director and manager for tender, miss communication and misunderstandings among tender; that makes the preparation for tender take a long time. Based on the description of the issues, a web-based tender administration application was established, which can assist the managing director and manager to get the tender's news easier.This application can provide notifications to the president director, managers and workers, by providing history or old information that will record the changes from the tender activities. Based on the results of the trial, the web-based tender administrations application can make a list of tender completeness documents required in the process of participating in tender, short message notification for the director and manager in tender approval and short message notification for the workers in field

The right place at the right time: assisting spatio-temporal planning in construction

21st - 24th October 2003 This paper describes research carried out for requirements capture in the development of a computer-based decision support tool (VIRCON) for space-time scheduling and visualisation of construction tasks. The focus was on pre-tender work and involved interviews with construction planners. Both space-time scheduling and visualisation of tasks are largely informal/intuitive processes for planners. They form an important part of the planner\'s risk identification function. Planners tend to opt for a robust spatio-temporal schedule rather than an optimal one. They require decision support tools that are quick and easy to use rather than highly sophisticated. The research highlights the extent to which construction planning is a communicative and co-operative activity in addition to a complex problem-solving one. Questions arise about the cost to the client of non-involvement by the construction planner at the design stage, the costs of short pre-tender periods, inadequate design data and sub-optimal construction periods specified in tender documents

Calls for Tender and Market Surveys: Roles and Procedures

ST division has implemented certain procedures to handle the calls for tender and market surveys. In January 1998, the division leader set up the 'call-for-tender co-ordination office' to check and approve each technical document leaving the division. The mandate of the call-for-tender co-ordination office is to check the quality of the documents, in order for these documents to be as clear as possible in terms of both content and structure. The role of this office is to contribute positively and give service to the people writing the documents, and not to give negative criticism. The aim of this paper is to present the mandate of the office, how papers are processed, and to draw up a first result summary

How Does Law Affect Finance? An Empirical Examination of Tunneling in an Emerging Market

This paper documents that law affects finance in emerging markets through the methods used by controlling shareholders to “tunnel” wealth out of the firm. We find that Bulgarian securities law enabled financial tunneling via dilution and freeze-out tender offers. During the period 1999- 2001, about two-thirds of the 1,040 firms on the Bulgarian Stock Exchange were delisted. Freeze-out tender offers for minority shares averaged about 25% of the shares’ intrinsic value. Bulgarian securities law changes in 2002 made financial tunneling more costly for controlling shareholders. Subsequent increases in stock market valuations and liquidity suggest that controlling shareholders have shifted from financial tunneling to less value-destroying methods, such as transfer pricing, to extract wealth from firms.Tunneling, freeze-out, controlling shareholders, appraisal rights, preemptive rights

How Does Law Affect Finance? An Empirical Examination of Tunneling in an Emerging Market

This paper documents that law affects finance in emerging markets through the methods used by controlling shareholders to “tunnel” wealth out of the firm. We find that Bulgarian securities law enabled financial tunneling via dilution and freeze-out tender offers. During the period 1999- 2001, about two-thirds of the 1,040 firms on the Bulgarian Stock Exchange were delisted. Freeze-out tender offers for minority shares averaged about 25% of the shares’ intrinsic value. Bulgarian securities law changes in 2002 made financial tunneling more costly for controlling shareholders. Subsequent increases in stock market valuations and liquidity suggest that controlling shareholders have shifted from financial tunneling to less value-destroying methods, such as transfer pricing, to extract wealth from firms.http://deepblue.lib.umich.edu/bitstream/2027.42/40128/3/wp742.pd

Auction Design and the Success of National 3G Spectrum Auctions

This study empirically examines a sample of national wireless spectrum assignments for the period 2000-2007 to identify the sources of revenue variations. An econometric model that recognises the censored nature of the sample relates per capita winning bid (per Mhz) values to auction design variables (license award process), national and mobile market conditions, spectrum package attributes and post-award obligations identified from national regulatory authority tender documents. The analysis reveals that most auction design variables independently impact on realized 3G spectrum auction revenue in a manner consistent with auction theory.Wireless telephone markets, 3G spectrum auctions, spectrum bid price

Revisiting the strengths and limitations of regulatory contracts in infrastructure industries

This paper evaluates regulation by contract in public-private partnerships (PPPs) in infrastructure services. Although the benefits of competition for the market and of regulatory contracts are widely acknowledged, the literature indentifies several failures in their design. These ‘flaws’ are present in both developed and developing countries and arise in all types of contracts. This study analyses both short and long term contracts, focusing on purely contractual PPPs and institutionalized PPPs (mixed companies). The evidence suggests that for all kinds of contracts, the major problems tend to arise in the preparation of public tender documents: the ‘best’ bidder is not often the winner. The likely results include redistribution in favor of the private partner, weak incentives for high performance, and renegotiation of contracts. Moreover, risks are not allocated correctly nor is effective monitoring ensured. This review of contract procedures and design allows us to draw several implications for policy-makers and to present suggestions and recommendations for improving regulatory contracts.regulation by contract; bidding documents; contract design; risk; monitoring

Risk and price in the bidding process of contractors

Formal and analytical risk models prescribe how risk should be incorporated in construction bids. However, the actual process of how contractors and their clients negotiate and agree on price is complex, and not clearly articulated in the literature. Using participant observation, the entire tender process was shadowed in two leading UK construction firms. This was compared to propositions in analytical models and significant differences were found. 670 hours of work observed in both firms revealed three stages of the bidding process. Bidding activities were categorized and their extent estimated as deskwork (32%), calculations (19%), meetings (14%), documents (13%), off-days (11%), conversations (7%), correspondence (3%) and travel (1%). Risk allowances of 1-2% were priced in some bids and three tiers of risk apportionment in bids were identified. However, priced risks may sometimes be excluded from the final bidding price to enhance competitiveness. Thus, although risk apportionment affects a contractor’s pricing strategy, other complex, microeconomic factors also affect price. Instead of pricing in contingencies, risk was priced mostly through contractual rather than price mechanisms, to reflect commercial imperatives. The findings explain why some assumptions underpinning analytical models may not be sustainable in practice and why what actually happens in practice is important for those who seek to model the pricing of construction bids

Critical success factors for e-tendering implementation in construction collaborative environments : people and process issues

The construction industry is increasingly engulfed by globalisation where clients, business partners and customers are found in virtually every corner of the world. Communicating, reaching and supporting them are no longer optional but are imperative for continued business growth and success. A key component of enterprise communication reach is collaborative environments (for the construction industry) which allows customers, suppliers, partners and other project team members secure access to project information, products or services they need at any given moment. Implementation of the stated critical success factors of the project is essential to ensure optimal performance and benefits from the system to all parties involved. This paper presents critical success factors for the implementation of e-tendering in collaborative environments with particular considerations given to the people issues and process factors