CPCCBC4013 Prepare and evaluate tender documentation

This unit of competency specifies the skills and knowledge required to evaluate project and contract requirements and prepare and formalise tender documentation in the building and construction industry. It includes interpreting, compiling and documenting essential project information and demands into a final tender document.

It applies to builders, estimators and managers in the building and construction industry who have a responsibility for evaluating and preparing tenders for residential and commercial projects.

This unit of competency is suitable for those using specialised knowledge to complete routine and non-routine tasks and using their own judgement to deal with predictable and sometimes unpredictable problems.

Learning Activities

All learning activities in this booklet must be completed in class to demonstrate that you have completed the learning section of the material and have an understanding of the subject matter. Your trainer will provide you with feedback on your performance.

If you require further assistance with your learning tasks, please make a time with your trainer/assessor to discuss the topic in further detail.

evaluate tender documentation Introduction

The building and construction industry is a competitive environment. There are many industry players in building and construction; however, a client only looks for one organisation to contract their services. The client does through what is known as the tendering process. The client invites different organisations to bid for work on a construction project, and they pick the organisation that best fits their needs and budget.

As the tenderer, you are tasked with evaluating the project’s requirements and preparing tender documentation that will help your organisation win the bid for residential or commercial construction projects. This includes documentation that supports your tender. The tender you submit to a client should tell them that your organisation is the best fit for the project and will give them the best value for their money while ensuring that your organisation gains profit.

In this unit, you will:

Research project requirements
Prepare tender documentation
Attach supporting documentation
Obtain tender approval or endorsement

Research Project Requirements

Before you can make a bid for a project, you must first establish what the construction project requires in the first place. This includes what the client needs from your organisation and the statutory requirements that the project must meet.

The tender that you submit to the client must communicate to them that your organisation is aware of what the project needs. You must give them the impression that your organisation can meet those requirements and satisfactorily complete the project. To do that, you must gather information from the documents included with the client’s invitation to tender and be familiar with the different statutory requirements in building and construction.

In this topic, you will learn how to do the following:

Gather relevant information for tender preparation from current and approved project plans, specifications, and project documentation.
Select appropriate contracts and tender documents
Identify and record risks during evaluation of contracts and tender documents

Gather Relevant Information for Tender Preparation from Current and Approved Project Plans, Specifications and Project Documentation

A project’s approved plans, specifications, and documentation will give you all the relevant information you need to prepare tender documents. These give you all the requirements that must be included in the tender, from client to statutory requirements. When you receive an invitation to tender, it usually comes with other documents that contain relevant information about the project you are tendering for. This also includes the project’s drawings and specifications. Aside from those, tender documents you receive may include the following:

An invitation to tender

This is the formal invitation from the client to make offers for the supply of goods and services. The invitation includes information about the goods and services described in detail. This allows the tenderer to prepare a tender that fits the client’s requirements and in a format that makes the tender easy to compare to other tenders.

The form of tender

This is a formal acknowledgement that the terms and conditions of the tender documents and other requirements are understood and accepted by the tenderer. The form of tender may include the following information:

Latest return time and date
- The price that they are to do the construction works for
- The validity period of the offered price
- Time allocated for the construction works
- Acceptance of terms and condition
- The law that will govern the contract
Preliminaries

These documents describe the project with which contractors can assess costs. The purpose of this document is to ‘describe the works as a whole and specify general conditions and requirements for their execution.’ These may include the following information:

A general summary
- Pre-construction information
- Any planning conditions that may affect the work to be carried out by the contractor
- Any outstanding statutory approvals that may fall to the contractor to satisfy
- A description of construction progress reports the contractor is required to submit on a periodical basis
- Quality management procedures
- Schedules of testing, samples, and mock-ups required from the contractor
- Method of subcontracting
- Insurance, warranties, and product guarantee requirements
- Operating and maintenance manual requirements
- Building information modelling (BIM) requirements
- Site waste management plan
- Contractor’s site preliminaries, such as staff costs, site offices, plant, site and waste clearance, water, electricity, furniture, ICT, and consumables, and so on

Tender pricing document/Unpriced bill of quantities (BoQ)

This tender document provides the details of how overall tender prices will be broken down. Essentially, it breaks down the construction works required by the project into exact tasks but with no measured price for each task. This document is prepared for the following reasons:

It enables easier comparisons between tenders and cost plans
- It enables the cost consultant to make a better assessment of value for money
- It enables easier identification of differences in pricing between tenderers to ensure the correct interpretation of designs
- It identifies where savings may be negotiated with tenderers while still in competition
- It forms the financial basis of the tender report
Employer’s information requirements for Building Information Modelling (BIM)

This defines the information required by the client from contractors and suppliers to develop the construction project and operate the completed built asset. Information requirements include those involved in the key decisions needed to be made during the project to ensure that it meets business needs. This document should clearly lay out the information required from each tenderer and describe how it should be delivered in terms of documents, model files, and structured information. When and how the information should be exchanged in the project lifecycle should also be defined in this document.

Tender return slip

This is a label included with the tender that is to be returned to the tenderer. It consists of the title of the contract, the return address, a tender checklist, and a set of instructions for the tenderer. This document will usually state that it cannot be opened until a specific date and time.

By reading through these documents, you should be able to gather the client requirements of the project. You must be familiar with the different types of building construction drawings and specifications and regulations, codes, and standards relevant to your construction project to establish the rest of the project requirements.

Building and Construction Drawings and Specifications

Construction drawings and specifications are documents used in construction that tell a builder exactly how a building is to be made, including dimensions, detailing, the arrangement of components, what building materials to use, and so on. Construction drawings are graphical representations of the building to be constructed, while specifications provide the details of the products, materials, and work necessary to complete the construction project.

There are many types of construction drawings that give the builder different graphical information about the building to be constructed. Examples of construction drawings include:

There are also different types of specifications in building and construction. These are the following:

Building and Construction Regulations, Codes, and Standards

In addition to the information on the construction drawings and specifications, you must also keep in mind that the project will need to comply with a number of building and construction regulations, codes, and standards. Some regulations only apply to specific states/territories, so it is essential to check what building and construction regulation applies to a construction project with your jurisdiction’s building administration.

National Construction Code (NCC)

The National Construction Code is the statutory reference for the minimum technical requirements for the design, construction, and performance of all new buildings and plumbing and drainage systems in Australia. It is made up of three volumes:

Each volume of the NCC contains the following:

Volume One contains the requirements for buildings that are multi-residential, commercial, industrial or public, and;
Volume Two contains the requirements for buildings and structures that are residential or non-habitable, and;
Volume Three contains the requirements for plumbing and drainage for all classes of buildings.

A building’s compliance with the NCC is dependent on whether it satisfies the General and relevant Performance Requirements specified in the NCC. General Requirements provide rules and instructions on applying the NCC to a construction project. Performance Requirements constitutes the minimum level that buildings and building elements must meet.

Because of the NCC’s performance-based nature, a choice of compliance pathways is opened for a construction project to comply with the NCC. A project may adopt either the Performance Solution or the Deemed-to-Satisfy (DTS) Solution. When a building complies with the NCC by using Verification Methods provided in the NCC, this is called a Performance Solution. On the other hand, a DTS Solution follows the DTS Provisions or set recipes of what, when, and how to do something as prescribed in the NCC.

Building and Construction Industry Standards

Standards are specifications and procedures that have been set out by particular organisations so that processes, systems, and services are consistent and reliable. Standards are often used in legislation to provide a baseline of what is considered safe. In building and construction, standards are referenced by the NCC and some codes of practice to ensure the consistency or safety of the building being constructed and the construction workers. You must remember that while legislation may enforce standards, the standards themselves are not legally binding. Standards only begin to hold legal weight when they are enforced by legislation.

Examples of standards in the building and construction industry relevant to tender documentation include the following:

Building and Construction Legislation and Regulations

Legislation and regulation are what enforces the codes and standards. As codes and standards, legislation, and regulation are specific to states/territories, however, Commonwealth legislation applies to all states/territories in Australia. Some state/territory law cover areas not covered by Commonwealth law, or the laws they enforce are in line with Commonwealth law. In cases where laws are inconsistent between Commonwealth and state/territory, Commonwealth law prevails.

The following are Commonwealth legislation relevant to determining project requirements in the building and construction industry:

Legislation	Description
The Competition and Client Act 2010 (CCA)	Promotes fairness in trade and competition, the Australian Competition and Client Commission (ACCC) enforced the CCA, which covers most areas of the trade market. This includes relations among suppliers, wholesalers, retailers, and clients levelled equally within the trading industry.
The Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act)	The EPBC Act enables the Australian Government to join with the states and territories in providing a truly national scheme of environment and heritage protection and biodiversity conservation.
Building and Construction Industry (Improving Productivity) Act 2016	Provides a framework for improved workplace relations in building work. Ensures that building work is carried out fairly, efficiently, and productively.
Independent Contractors Act 2006	Protect the freedom of independent contractors, recognise independent contracting, and prevent interference with the terms of genuine independent contracting arrangements.

CPCCBC4013 Prepare and evaluate tender documentation

Legislation	Description
Work Health and Safety Act 2011	Provide for a balanced and nationally consistent framework to secure the health and safety of workers and workplaces.
Fair Work Act 2009	Provide a balanced framework for cooperative and productive workplace relations that promotes national economic prosperity and social inclusion for all Australians.

CPCCBC4013 Prepare and evaluate tender documentation

Fair Work Act 2009

Industrial laws are governing laws explicitly designed as a guiding parameter and regulator of industries. The foundation for these provisions is embodied by the Fair Work Act 2009. This legislation tackles the promotion of equal economic opportunity for Australians and serves as the basis for employment standards and welfare.

Detailed information is provided in this link: Fair Work Act 2009.

Found in the table below are legislation not excluded by the Fair Work Act 2009 of each state/territory:

State/Territory	Industrial laws not excluded by the Fair Work Act 2009
Australian Capital Territory	Discrimination Act 1991
New South Wales	Anti‑Discrimination Act 1977
Northern Territory	Anti‑Discrimination Act 1992
Queensland	Anti‑Discrimination Act 1991
South Australia	Equal Opportunity Act 1984
Tasmania	Anti‑Discrimination Act 1998
Victoria	Equal Opportunity Act 2010
Western Australia	Equal Opportunity Act 1984

CPCCBC4013 Prepare and evaluate tender documentation

Work Health and Safety Act (WHS Act) in Building and Construction

One of the priorities of a developer or contractor is that everyone’s health and safety in the workplace are considered. The building and construction work environment can be hazardous and is paired with occupational risks. Therefore, it is everyone’s responsibility to abide by WHS practices as a legal requirement and crucial for the entirety and completion of the project.

The WHS Act defines strict health and safety requirements for the protection of all workers at work and other people who might be affected by the work. It is the legal obligation or duty of everyone to adhere to these requirements.

The table below provides links to complete information for WHS regulations in each State/Territory.

State/Territory	WHS regulations
Australian Capital Territory	Work Health and Safety Act 2011
New South Wales	Work Health and Safety Regulations 2017
Northern Territory	Work Health and Safety (National Uniform Legislation) Act 2011
Queensland	Work Health and Safety Act 2011
South Australia	Work Health and Safety Regulations 2012
Tasmania	Work Health and Safety Regulations 2012
Victoria	Occupational Health and Safety Regulations 2017
Western Australia	Occupational Safety and Health Regulations 1996

CPCCBC4013 Prepare and evaluate tender documentation

Environmental Management Statutory Requirements

Regulatory bodies also manage the effect of a construction project on the environment in each state/territory. The local government may not approve a construction project whose commencement is expected to be detrimental to the environment. To avoid this, you must check with your jurisdiction’s regulatory body in charge of environmental management if the construction project you are working on needs such approval to commence.

The regulatory bodies overseeing environmental management in each state/territory are the following. You may click the link provided to access the environmental acts relevant to each state/territory.

State/Territory	Environmental Regulatory Body
Australian Capital Territory	ACT Environment Protection Authority
New South Wales	NSW Environment Protection Authority
Northern Territory	NT Environment Protection Authority
Queensland	Department of Environment and Science
South Australia	SA Environment Protection Authority
Tasmania	Tas Environment Protection Authority
Victoria	Vic Environment Protection Authority
Western Australia	Department of Water and Environmental Regulation

CPCCBC4013 Prepare and evaluate tender documentation

Select Appropriate Contracts and Tender Documents

After familiarising yourself with the construction project, it is time to select the appropriate contracts and tender documents for the construction project. Contracts are, in the most basic sense, law-enforced promises. Contracts abide by legal systems. A legal system describes the existing laws of the land, how these laws are made, and how these laws are enforced in society. Australia’s form of the legal system is Common Law. Its major sources of law come from cases and legislation. It regulates construction contracts to ensure that all parties involved perform their obligations and that their rights are protected.

On the other hand, tender documents are the documents you send back to potential clients who have sent your organisation an invitation to tender. These documents include the price your organisation will complete the project for and proposals for how your organisation will be meeting the requirements laid out in the project plans and specifications.

The documents you include with your tender will typically depend on the tenderer instructions included with the invitation to tender. These instructions are usually on the tender return slip. Documents and information that the client may require from the tenderer include the following:

Details of tenderer
Tender schedules
Work history of the tenderer
Priced bill of quantities
Contract draft/price
Alternative proposals to achieve greater value for money

However, the appropriateness of a contract to a project will depend on the type of building the construction project is for and the project’s contract price.

Types of Contracts

As mentioned, contracts enforced in building and construction are based on their costs or the type of project planned. You need to know the types of building and construction contracts to apply them appropriately in your projects. The following are the types of contracts usually used in building and construction:

Residential Contracts

These are contracts used when residential building work needs to be carried out, when a residential building (or parts of it) is being sold and residential building work needs to be carried out, or when there is an arrangement for someone to carry out residential building work.

Commercial Contracts

These are contracts used when the building involved in the project will be used for non-residential purposes such as retails stores, hotels, offices, and other spaces that may be needed for providing businesses.

Subcontractor Contracts

These are contracts made when the main contractor enlists the help of subcontractors for specialist and specific work in the construction project on behalf of the main contractor.

Lump Sum Contracts

Also called fixed sum contracts, these are contracts used when the contractor and the principal arranged a fixed price for the work that needs to be done. The contractor will be hired before the project commences and will finish the project with the set price. This type of contract applies to both commercial and residential contracts.

This type of contract is often used for simple projects with already well-defined responsibilities for all parties. There is little room for change, and the arrangement is predictable, so all the plans must be complete, and the costs have been finalised. The principle behind this is that the company or business wants to get their money’s worth, while the contractor seeks to achieve a higher level of profit from the set payment. There may be a conflict of interest, but the contract provides for clear and defined terms.

Cost Plus Contracts

These are a more flexible alternative to lump sum contracts. Under a cost plus contract, the hirer agrees to reimburse the contractor’s company for the building expenses such as the labour performed, the material purchased, and the other costs, plus additional payment that is usually stated as a percentage of the contract’s full price. The client, in turn, has the right to complete transparency of the contractor’s expenses for the project.

This type of contract incurs less risk for the contractor as it allows for more flexible provisions. Also, it ensures that the contractor will make a profit out of it. In some cases, the contract will have clauses referring to a maximum price as cost-plus contracts operate under a reimbursement principle. This contract applies to both commercial and residential contracts.

Identify and Record Risks During Evaluation of Contracts and Tender Documents

Like any business ventures, risks are present in construction CPCCBC4013 Prepare and evaluate tender documentation projects. Some of these risks can be identified in the tendering process. It is in your organisation’s best interest to have these risks documented as early as possible so that measures may be developed to mitigate the likeliness of these risks, or their impact should they happen.

These risks and their impacts on the construction project include:

Project Risk	Description	Impact on Project
Breach of contract	This is a violation of any of the agreed-upon terms and conditions of a binding contract, such as failure to carry out works and defective output.	When a breach of contract occurs, the construction project may be suspended until both contracted parties come to a decision or an agreement.
Project delay	This is defined as the time overrun beyond the completion date specified in the contract or beyond the date that the parties agreed upon to deliver a project.	Project delays extend the overall duration of project activities and entail an increase in project costs.
Payment disputes	These refer to disagreements between contracted parties regarding payment claims (e.g. amount of money propose to be paid, full or partial payment, etc.).	Payment disputes could lead to delays in the project since contracted parties may need to arrive at a mutual decision before project operations can proceed
Delay in progress payment	These are occurrences wherein agreed upon incremental payments are paid later than agreed upon or not paid upon the achievement of specific percentages of project completion.	Delays in progress payment cause delay in project progress, affecting the schedule of work and leading to cost overrun and extension of time.

CPCCBC4013 Prepare and evaluate tender documentation

There are also risks of particular circumstances associated with the tendering process that may happen during the lifecycle of a construction project. These circumstances, along with their impact on the construction project, are presented in the table below.

Circumstance	Impact on Project
Delivery delays that extend project completion dates	When construction items are not delivered on time, the schedule for performing construction tasks will have to be stretched, and the overall cost of the project will increase.
Labour shortages	Since the labour force influence the overall productivity in construction projects, a shortage of labour means low construction quality since contractors are forced to hire underqualified workers. This may further result in costly project delays.
Weather	Since a significant proportion of construction activities are highly-weather sensitive, weather conditions (e.g., high wind, rain, storms, snow) can cause significant project delays. This includes postponing construction tasks during certain weather conditions to protect equipment.
Failure to adequately anticipate labour costs	Failure to adequately anticipate labour costs will lead to additional costs to give proper compensation to construction personnel hired for the project. Ultimately, this could lead to an overall increase in the project cost.
Failure to adequately anticipate material costs	Failure to adequately anticipate material costs will lead to additional costs to purchase the necessary construction materials. Ultimately, this could lead to an overall increase in the project cost.
Inappropriate funding levels	Inappropriate funding levels (e.g. allocating too much for materials but too low for labour, etc.) can lead to financial adjustments as the project progresses. Processing the financial adjustments may be an additional task not anticipated previously, which can further lead to project delays.
Funding shortfalls	Funding shortfalls will lead to the allocation of additional costs to compensate for the funding shortage. This increases the overall cost of the project. Additionally, processing requests for acquiring additional budget may take a considerable amount of time, potentially pushing the project’s completion date.
Industrial disputes through misunderstandings or overt action	Industrial disputes through misunderstandings (e.g. lack of understanding of the contract conditions) or overt action (e.g. deliberate expression of unsubstantiated claims by a party), when not addressed immediately, can lead to a breach of contract. This may result in the suspension of the construction project, and ultimately the delay of the project.
Risk of default or non-performance of key players	When key players in the construction project default or not perform according to their responsibilities, the contractor will be forced to terminate those key players’ employment and hire new ones. Since there is a need to hire qualified construction personnel, the contractors will have to allocate adequate time for the hiring process. This can push the project schedule further.

CPCCBC4013 Prepare and evaluate tender documentation

As you proceed with evaluating contracts and tender documents, you should keep an eye out for any of the risks or circumstances provided in the tables and record them once identified. Following proper risk documentation allows your organisation to be on top of any issues the project may encounter before they even occur. When documenting risks, make sure to follow organisational procedures.

Consider the following points when recording project risks associated with the tendering process:

Learning Activity 1: Research Project Requirements

Activity 1.1

List the three pieces of information that should be in the specifications of tender documentation.

CPCCBC4013 Prepare and evaluate tender documentation

Activity 1.2

Describe the risks involved in the tendering process.

CPCCBC4013 Prepare and evaluate tender documentation

Activity 1.3

Matching Type Shown below are the eight steps to aid risk management. Match each step with the order each step should be done in. Steps in Risk Management Contract Conditions Customer Evaluation Facilities Scope Mandatory Provisions Plan Results Pricing Terms Project Position Risk Provisions


Steps in Risk Management
Facilities Scope
Customer Evaluation
Project Position
Pricing Terms
Risk Provisions
Contract Conditions
Mandatory Provisions
Plan Results

CPCCBC4013 Prepare and evaluate tender documentation

Prepare Tender Documentation

Once the requirements of the construction CPCCBC4013 Prepare and evaluate tender documentation project are established, and you know what the project needs, you may begin the preparation of tender documentation. This means you are ready to make the bid for the construction project.

You must familiarise yourself with the structure of the costing, contracting, and tendering systems in your organisation. These are the stakeholders involved in these processes. These are the people in your organisation that you may be interacting with while preparing tender documentation. This will vary between organisations. Access and review your organisation’s structures to ensure that you know who to communicate with during the tender documentation process. The chart on the next page presents a sample organisational structure for costing, tendering and contracting systems.

In this CPCCBC4013 Prepare and evaluate tender documentation topic, you will learn how to do the following:

Collate all information for tender preparation and check for accuracy
Prepare tender documentation to correspond with selected contracts and organisational processes and procedures

Collate All Information for Tender Preparation and Check for Accuracy

A tender is a bid to work on a project for profit. Your organisation is counting on you to get them a client that will allow them to pay the bills. Therefore, the tender you produce must be based on accurate information. If you prepare a tender on inaccurate information, such as wrong quantities of materials or scope of work, you may end up losing profit even if you win the tender.

Once the information is gathered and you have ensured their accuracy, you can collect and combine the relevant information to prepare tender documentation. Review and access the project plans, specifications, and tender documentations sent by your client. Information you need to collate for the tender you are preparing include:

Information from project plans such as the publication and approval dates of the project plans, measurements, detail drawings, location, material specifications, and general notes for the scope of works
Information from project specifications such as the publication date and approval dates of the project specifications, product specifications, installation procedures, expected performance of deliverables, necessary testing procedures, and standards of workmanship
Information from tender documentations such as the publication and approval dates of the tender documentations, tender closing date and time, tender evaluation criteria, scope of works, tender response validity.

As you collate the information, be sure to check for their accuracy by reviewing the documents where the information is based on. For example, to make sure that the information you collated regarding the project’s location is accurate, you will need to review the project’s site plan. Make sure to follow the operation of your organisation’s tendering system as you compile the relevant information. This refers to the procedure followed by your organisation during the tendering process to ensure that organisational policies are followed. For example, relevant information may be stored in cloud services such as Google Drive and Microsoft SharePoint. You will need a computer and internet connection to access them in this case.

Prepare Tender Documentation to Correspond with Selected Contracts and Organisational Processes and Procedures

After relevant information about the project has been collated, you may start preparing the tender documentation. You may have been provided with an unpriced bill of quantities (BoQ) when you were invited to tender by a client. The BoQ provides the specific measured quantities of items (e.g., building materials, plants, and equipment) required for construction works identified by the project’s drawings and specifications.

You must make sure that you are following organisational processes and procedure while preparing tender documentation. This may include using a tender documentation template or word processing programs like Microsoft Word and Google Docs. Organisational processes refer to the flow of an activity to achieve a particular goal, while procedures refer to the detailed steps of performing a particular activity. Like the established costing system operations of your organisation, processes and procedures were established to ensure that your organisation’s actions are consistent, reliable, and follows organisational policies. This ensures that organisational requirements are met and adequate goals are achieved.

Another essential resource in a construction project not included in the BoQ but still must be considered in the tendering process is the human resource. Human resource in building and construction consists of employees and subcontractors. You will need to identify what type of labour you will be utilising for the project since these will entail different costs.

The two types of labour associated with these resources are:

Examples of skilled labour in building and construction include painters, welders, master carpenters, licensed electricians, and crane operators. Examples of unskilled labour include demolition clean-up, site helpers etc.

Employees and subcontractors are also differentiated from each other in several ways. They differ in the usage of labour, as outlined below.

They also have different scopes of construction work. Employees are limited to activities that directly benefit their employer’s company. They only perform tasks required of them by their employer. Subcontractors, however, perform work across multiple projects from different employers. Subcontractors can perform activities for more than one employer since they can offer their services to multiple employers.

Tender documents you may need to prepare to submit to a client include the following:

Tender schedules

The client may have sent your organisation a tender schedule along with the invitation to tender. This schedule contains questions from the client relevant to the evaluation criteria they will be using when picking the organisation to contract with, such as:

Details of tenderer

This includes details about your organisation, such as the policies that it adheres to and other information that may be pertinent to the project. The details to include are usually specified by the client in the tenderer instructions included with the tender return slip.

Work history of the tenderer

This may include past construction projects worked on by your organisation. This gives the client a reference for the work that your organisation is capable of delivering should your tender be approved.

Priced bill of quantities

As the tenderer, you must provide the price for carrying out construction works by calculating and assigning construction costs for each item in the BoQ. In doing so, you must follow the costing system operations laid out by your organisation. These are procedures established by your organisation to ensure that its policies throughout the costing process. This may involve the use of costing software such as BuildXact and Constructor. Organisations use costing software to ensure that prices included in a tender are consistent and will give them profit while offering reasonable prices.

Contract draft

You will also be submitting a draft of the contract that your organisation will sign with the client should your tender be approved. This includes the terms and conditions you will ask the client to agree to in exchange for the supply of service. The contract you draft should match the type of contract you deemed appropriate for the project in The Types of Contracts section. Make sure that you are following the operations of your organisation’s contracting system. Like in the costing system, these are procedures established by your organisation to ensure that its policies throughout the contracting process.

Alternative proposals to achieve greater value for money

Whether requested by your client or not, you may also offer alternative proposals on how the construction project can be completed cost-effectively. This should be based on the project requirements you gathered in Topic 1 and in collaboration with other people involved in your organisation’s tendering system. This is another way to showcase your organisation’s expertise in completing construction projects and will likely increase the chance of your tender being approved.

Learning Activity 2: Prepare Tender Documentation

Activity 2.1

Explain why you should ensure that the amount taken off a tender is correct.

CPCCBC4013 Prepare and evaluate tender documentation

Activity 2.2

True or False Review the statements below about the tendering process. Indicate whether each statement is True or False. Tick the box that corresponds to your answer.

☐ TRUE ☐ FALSE
☐ TRUE ☐ FALSE
☐ TRUE ☐ FALSE
☐ TRUE ☐ FALSE
☐ TRUE ☐ FALSE
☐ TRUE ☐ FALSE
☐ TRUE ☐ FALSE
☐ TRUE ☐ FALSE
☐ TRUE ☐ FALSE
☐ TRUE ☐ FALSE

CPCCBC4013 Prepare and evaluate tender documentation

Attach Supporting Documentation

There are various supporting documents that are attached to tender documents. They are not parts of a tender but are only supplementary to tender. It is crucial to be familiar with them because you would need them together with your tender document. Without them, a tender document will not pass on its own or would not be credible as a standalone document.

Since the building is yet to be constructed, the artist’s impressions, which consist of drawings or graphical representations, can be used by both clients and tenderers to acquire an idea of how the proposed building will look like, including the overall design and associated landscape of the planned building.

Building information modelling (BIM), which is an integrated 3D model of various construction discipline (e.g. architectural, structural, electrical, etc.), allows tenderers to better demonstrate their building project proposal to project members and clients and helps reduce the risk of missing important building elements and other risks associated with the project.

Product information documentation contains specific information from the tenderers regarding the products that have been selected and will be used in the construction project.

Promotional materials serve as marketing tools employed by the tenderer to obtain a positive image from the client and increase the chances of having the project awarded to the tenderer.

Reports and findings beneficial to the organisation are documents presented by tenderers for the client organisation to be informed about crucial areas specific to the construction project and the ways to address these areas for the benefit of the organisation.

Preliminary Services

Statement of Site Organisation and Process
Mobilisation and schedules for construction
Equipment of a Contractor
Contractor’s Employees

Qualifications of the Tenderers

Qualifications of Tenderers Without Prequalification
Qualifications of Tenderers Following Prequalification

Certain Information

List of Subcontractors Proposed
The names and addresses of the insurer and its key terms of reference for the insurance covered by the policy.
Name and address of the bank that will supply the securities for performance and advance payment.

Select and Accurately Complete Relevant Documentation Required to Submit with the Tender

Once you have collated all information and have prepared the tender documentation, you should now move on to selecting and accurately completing the relevant support documentation required to submit together with the tender document itself. These documents should complement the tender contract and its provisions.

Preliminary Services

In the preliminary services, these documents must be filled out and attached as part of the initial needs of tender documentation. These include:

Statement of Site Organisation and Process

The tenderer shall provide here a general overview of the arrangements and the declaration of the processes and procedures to be followed by the tenderer for the execution of the construction work. In conjunction with the tender papers, the tenderer’s arrangements and the method statement should show their adequacy execution of the works.

Mobilisation and Schedules for Construction

The tenderer shall include details and/or a timetable indicating the order in which the tenderer intends to execute the works, including, but not limited to the expected timing of each stage of the execution of the contract, which includes:

Mobilisation of the Factory and Machinery Provider
Performance of each main construction operation, including planned construction rates and projected timing for its start and completion
Information on the origins of the main materials, approximate distances of transport for the materials
Other details, as deemed necessary by the tenderer

Plant and Equipment of the Contractor

Sufficient details must be provided by the tenderer to clearly prove that it is capable of meeting the specifications for the vital equipment and other machinery necessary for the project. To organise this, you can set up an equipment specification form where the contractor can enter relevant specifications of the equipment that is needed to carry out construction work.

Workers and Employees of the Contractor

Tenderers should provide the names of suitably qualified personnel to meet the specified requirements of the construction activities. You can provide a worker data sheet where relevant workers and other employees for the project can incorporate their personal information and work expertise and experience.

Qualifications of the Tenderers

These documents must be filled out and attached to establish criteria in the qualifications of tenderers. These include:

Qualifications of Tenderers Without Prequalification
Qualifications of Tenderers Following Prequalification

Qualifications of Tenderers Without Prequalification

To establish its qualifications to perform the contract in accordance with the evaluation and qualification criteria, the tenderer shall provide the information requested in the corresponding information sheets without prequalification.

Qualifications of Tenderers Following Prequalification

The tenderer shall, during the subsequent prequalification exercise, update the information provided to show that it continues to meet the requirements used at the time of prequalification. For this reason, the tenderer shall, upon prequalification, use the appropriate forms.

Other Information

These documents must be filled out and attached to address and fulfil the other information needed together with the tender documentation. These include:

List of Subcontractors Proposed
The name and address of the insurer and its key terms of reference for the insurance covered by the policy.
Name and address of the bank that will supply the securities for performance and advance payment.

List of Subcontractors Proposed

Where the tenderer proposes to use a specified subcontractor for the execution of any part of the job, the tenderer shall include, for each subcontractor proposed, the following information:

Name, address of head office; place of incorporation/registration; year of incorporation/registration and details of contact
A brief overview of the portion of the work to be subcontracted and its approximate value
Definition of the appointed subcontractor’s capacity and resources to conduct the proposed part of the job, including:
Experience and past success in the performance of related works
Capabilities in terms of workers, equipment, and construction
The financial situation
- The need for the use of the proposed subcontractor for the execution of works to be adequately justified

Name, Address, and Terms of Reference of Insurer

The name and address of the insurer and its key terms of reference for the insurance required under the contract shall be given by the tenderer.

Name and Address of Bank

The name and address of the issuing bank, which will supply performance and advance payment securities, will be issued by the tenderer. The tenderer must also provide rating agencies with information on the existing credit rating of the issuing bank.

Attach Vital Information, Drawings, Specifications or Other Supporting Evidence to the Tender Document

Aside from the relevant documents mentioned in the previous section, you should also prepare and attach vital information, drawings, specifications, or other supporting evidence to the tender document.

Product Information

Product information contains specific details regarding the products that have been selected and will be used in the construction project. Products may include:

Building materials
Building components
Building products
Construction tools, plant, and equipment

The vital information allows tenderers to confirm the proposed materials the project requires in order to construct the building. It also assists tenderers in checking if there are allowable tolerances and alternatives to the materials.

Examples of product information are:

Construction Drawings

There are two main construction drawings you should include in the tender document:

Artist’s Impression

The Artist’s Impression is a preliminary drawing or graphical rendering of the planned design and form of a building to be constructed without getting too technical. This can be manually drawn or digitally rendered through software.

The advantage of providing an artist’s impression together with the tender documents is that it gives the tenderer an idea of how the proposed building would look like. The rendering will also help the tenderer get a gist of the construction work and materials necessary to complete the building. You can check the sample artist’s impression of a proposed commercial building below.

Based on the sample, the tenderer can verify that there will be extensive construction work needed as the proposed commercial building will be at least four storeys. The tenderer can also confirm that there will be landscaping and pool construction work involved. Also, the materials can be easily identified, with glass to be used widely.

Building Information Modelling

Building Information Modelling (BIM) is a 3D model-based process that utilises tools and technologies that enable the creation and management of digital representations of physical and functional characteristics of structures/buildings/places.

Compared to the artist’s impression, BIM focuses on the structural properties of the proposed building. It allows tenderers to view the building with its technical descriptions. This helps tenderers approximate the kind of materials and equipment necessary to do the construction work. Additionally, it lets tenderers check other aspects of the building, such as plumbing and electrical models.

Other construction drawings that can be attached to the tender documents include:

Site Plan – The site plan is used to obtain a general view of the property, including the proposed building, location, and essential site features, and acquire an overview of the entire scope of work involved for the project.
Floor Plans – Floor plans are used to know the layout of the building and the arrangement of interior elements such as walls, columns, doors and windows, and the different building spaces.
Detail Views – Detail views are large scale drawings which can be used to investigate a particular building component more clearly and examine complex configuration which cannot be seen on a smaller scale.
Elevations – Elevations are used to obtain information such as the height of the building and the look of the building façade, based on the vertical projection of the building exterior.
Sections – Sections are used to analyse the relationships of elements found in the building interior (e.g., allows one to identify variations in a floor level’s elevations) and how they go together based on a specific vertical cross-section.

These drawings can be separate from the main two drawings or are incorporated into the two. In addition, these drawings provide additional relevant information on the building to be constructed. The more detailed the drawings, the more information you can present to tenderers which will help them assess and consider if they are compatible with the project.

Specifications

Specifications are documents that contain a textual and technical description of the drawings found in the construction plans. They provide further explanation of the drawings and presents additional information which cannot be expressed clearly through them. Specifications include, but are not limited to, the following:

The structural strength of concrete, steel, and other structural elements
Technical details of a material or product (e.g., brand, colour, dimensions, etc.)
Step-by-step instructions for doing a specific job
Allowable tolerances for the installation of parts
Safety procedures
Necessary licences or qualifications of relevant construction personnel

There are different types of specifications. These include:

Prescriptive specifications – Prescriptive specifications cover the details of the types of materials used and the installation of these materials. Furthermore, it is divided into three parts:
- General – national quality standards, design requirements
- Products – details of the different products and the corresponding performance level of each product
- Execution – preparation and installation of materials
Performance specifications – Performance specifications cover the operational requirements of a project, including the details of what the final product has to be capable of doing and the necessary testing procedures involved.
Propriety specifications – Propriety specifications cover the product and installation details of a certain building component wherein only a single type of product can be used. They are used mostly for projects which involve existing equipment and already completed installations.

Other Supporting Pieces of Evidence

Here are other documents that provide supporting evidence to the tender documents:

Industry Profile and Promotional Materials – The industry profile and relevant promotional materials help portray a positive image to tenderers. Industry profile may include projects and accomplishments achieved, as well as compliance to Australian and International Standards if any.
Construction Reports and Findings – Relevant tests and inspections during pre-construction, such as land/site preparation, are required to assess the construction site and processes for the project. Their reports and findings should be presented so that they are informed of details on crucial areas of the construction project and ways to address these.

Prepare and Attach Client Acceptance Forms and Any Amendments and Conditions to the Tender or Contract

Apart from the documents discussed in the previous sections, you should also take time to prepare the client acceptance forms for the benefit of transparency in agreement when you have chosen who to contract with. Also, you should consider preparing the amendments and other conditions that were revised over the course of the tendering process. This makes the contract current and updated based on the changes that happened during the tendering process.

Client Acceptance Forms

Another document you should prepare is the client acceptance form. A client acceptance form is a letter or memorandum communicating the acceptance of the bid (tender) to the supplier and contains the tentative acceptance of the offer, i.e. letter of purpose or contract for rates. It is crucial that you prepare a client acceptance form to create a formal method of agreement and acceptance of the tender offer.

Three fundamental elements must be integrated into a client acceptance form:

Take note that since tenders go through multiple changes and amendments before they are accepted, you should include in the client acceptance form the final version of the contract, which reflects all the relevant changes to the tender that is agreed upon by all parties. When the agreement has been achieved, and a complete consensus has been reached, there will be real acceptance of a tender.

Amendments to Tender or Contract

A new release should be released each time the information changes tender or contract. An amendment to a tender is an addition to, exclusion from, correction, or modification to an existing proposal that is out for bid. Tender or contract amendments are released days, weeks, often months after the original offer is issued, also known as contract addendums or revised tenders or contracts. Whether or not an amendment to a bid is given depends on the agreement at hand. There will be several changes to some bids, while others will not have any amendments at all.

Over time, knowledge about a contracting process can also change.

Three kinds of changes exist:

Modifications. For instance, when a contract’s value or length is modified. For a publisher, the word amendment also has a particular legal meaning. Only as part of an amendment will such modifications to a tender, grant, or contract be permitted.
Existing information changes. To fix mistakes in earlier updates, for example, or to make slight changes to names, explanations, or dates.
New data. For example, when it first publishes details regarding the award of a contract.

And what is included in an amendment to a contract? An amendment can, but is not limited to, include the following:

Modification of the due date for the request
A change in the project requirements
A Q&A answer to queries from vendors
A shift in the wording of the proposal for an offer
Inclusion of a pre-proposal session
A change in bidder specifications for the project

It is up to the interested vendor to do so when it comes to monitoring contract amendments. Government agencies do not always make the data accessible to all. Often, only interested vendors who have shown interest in the organisation that published the project are made available. It is a good idea to reach out to the organisation that released the project and show verbal interest to ensure that you will be informed of any amendments. Also, if you are sent an initial offer and the agency has a contact form to fill out on their site, it is in your best interest to fill out the form. Through doing so, you will be placed on a list of suppliers and will be informed of any project changes.

Conditions to Tender or Contract

In certain tenders and contracts, the obligation of performance is based on the occurrence of a designated condition or promise. A condition is an occurrence that affects a duty to carry out construction work and achieve outcome and performance that is specified in a tender or contract.

Types of Conditions

Condition Precedent – This means that the conditions should be met before the consideration (e.g. payment) is provided to the other party.
Condition Concurrent – This is when both parties meet the conditions of the tender at the same instance.
Condition Subsequent – This means that when a condition in the contract is met, it terminates the obligations of a party to the contract.

In preparing the conditions of the tender, you must make sure that these conditions are fair, in accordance with the Australian Client Law. This law safeguards contract parties from unfair contract terms. According to the Australian Competition & Client Commission (ACCC), to be considered ‘unfair’, a term in a contract must:

Cause a significant imbalance in the parties’ rights and obligations,
Not be reasonably necessary to protect the legitimate interests of the party advantaged by the term, and
Cause financial or other detriments (such as delay) to a small business if it were relied on.

A term or condition in a contract is deemed unfair solely by a court. The court considers transparency in deciding this matter, as well as the rights and obligations of each party under the contract and other relevant matters. As a site supervisor, you must make sure that all relevant contracts (e.g. for clients, contractors, suppliers) are transparent for all parties concerned. To do that, you can conduct an analysis of the contracts by checking the following qualities:

Language – content is expressed in simple language.
Clarity – terms are easily readable and legible.
Presentation – clauses and ideas are understood.
Availability – the term is readily available to all affected parties.

Learning Activity 3: Attach Supporting Documentation

Activity 3.1

Matching Type Identify the type of supporting documentation being described in each statement below. Types of Supporting Documentation Drawings or Graphical Representations Building Information Modelling (BIM) Product Information Documentation Promotional Materials Reports and Findings

Supporting Documentation
i. Building Information Modelling (BIM)
ii. Reports and Findings
iii. Product Information Documentation
iv. Promotional Materials
v. Drawings or Graphical Representations

CPCCBC4013 Prepare and evaluate tender documentation

Activity 3.2

Matching Type Listed below are the different types of specifications of tender documents. Technical specificationPrescriptive specificationPerformance specificationProprietary specification Match each to their description below, by writing the letter that corresponds to your answer in the space provided.

Description
Building Information Modelling (BIM)
Reports and Findings
Product Information Documentation
Promotional Materials
Drawings or Graphical Representations

CPCCBC4013 Prepare and evaluate tender documentation

Activity 3.3

Define what the Satisfactory Output condition to tender or contract is.

CPCCBC4013 Prepare and evaluate tender documentation

Obtain Tender Approval or Endorsement

The client/purchaser should be able to either award the contract or gain permission to make the award after the tender review process has been completed.

If the internal authority or authorisation for the award of a contract has been received, the effective bidder must be informed of the acceptance of the contract with a minimum delay.

Tender Time of Acceptance

While an award can be made at any time after the closing of the tender, after the stated tender acceptance period, the bidder is not obliged to accept the award. If it seems unlikely that an award would be possible prior to the expiry of the tender acceptance period, bidders will either be told that the acceptance period has been extended, or they may be invited to extend the terms of their offers beyond the acceptance period. The method for extending the time of acceptance depends on the form of tender/contract used.

A Purchase Order, Letter of Acceptance and Contract are the forms of award notification used in contracts.

Purchase Order

The Purchase Order is used with all product tender awards to inform active bidders. In addition to approval of the tender, the Purchase Order helps to include precise details relative to shipping and invoicing.

Letter of Acceptance

Letters of Acceptance can be used with all service and consulting contracts to inform active bidders of contract awards. A formal acceptance of an offer is a letter of acceptance; it represents a legal arrangement or contract between the party and the contract.

The object of the Letter of Acceptance is to allow the contractor, before the formal contract is issued, to begin the work. It helps the contractor to pre-order inventory, allocate money, or receive bonding or insurance evidence.

Contract

The effective bidder for execution will be sent a formal contract containing the terms specified in the tender.

Important Notification Points

To ensure the following details are correct, the award notification should be carefully reviewed that:

The award is granted to the approved bidder
The name and address of the bidder are the same as those in which the offer was made
The definition of the goods/service/project and the delivery position is similar to that quoted in the tender or proposal
The contract price shown conforms with the bidder’s offer, including any amendments (which should be noted)

It is right to describe the offer being accepted, i.e. options or alternatives must be defined if they are accepted, etc.

Contract award notification is usually sent via facsimile. It is important that the transmission confirmation is obtained and kept on paper. The initial award document should also be submitted by mail in certain cases.

Conduct Final Evaluation of Completed Tender Documentation

Once tenders have been submitted, to determine the preferred tenderer, a careful selection process must be performed. This is regarded as the final tender evaluation (or sometimes, tender adjudication).

Usually, each of the following parameters may be considered by final evaluations:

Past performances
Relevant experience
Skills and systems in management
Comprehension of the specifications
Professional abilities
Resource availability
Price
The methodology suggested (this might include mobilisation plans, design proposals, and non-compliant proposals if these have been allowed)
Compliance with the conditions laid down in the tender invitation

Choosing no more than five parameters in final evaluations is common. It is crucial that the requirements chosen are carefully considered, that they are applicable to the project’s goals and that they can be properly evaluated from the details given in the tenders. If alongside the tender application, interviews are to be conducted and analysed, then this must be built into the award requirements.

To show how relevant they are to the client, the requirements are then weighted. A weighting of at least 60 per cent is common to give the price, with the remaining percentage allocated to the other requirements, giving a total of 100 per cent. It is good practice to make the conditions and weightings known in the invitation to tender tenderers.

Against each criterion, each tender is then given a ranking, typically with 0 being the lowest score and 10 the best possible score. Tenders may be judged by a variety of assessors, or different criteria may be rated by different assessors.

Scores can be allocated through a variety of methods to tender rates, but one common method is:

This earns you a score of 10.

The average score for a tender can be determined in the simplest evaluations by multiplying the score by its weighting for each parameter and then adding together or combining the results for each evaluator. Where there are very different scores between evaluators, a meeting to identify the reasons should be held.

In the long run, assessments that recognise the tender that better suits the needs of the client and provides the best value for money may be more effective. As compared to the lowest-price approach, this is often referred to as the ‘most economically beneficial tender’ (MEAT) approach.

Additional benchmarks may require more difficult final evaluations. There may be some requirements that are a straightforward pass/fail problem. Failure, for instance, to comply with a basic feature of the tender invitation is one of them. There may also be criteria for which a very low rating (for example, a methodology score of less than three out of 10) is inappropriate, regardless of the scores for other criteria.

They will enter negotiations with them once the client has established the preferred tenderer. Such discussions shall provide an opportunity to negotiate on or explain any issue relating to the price and quality of the works proposed, the terms of the contract and the programme, and may result in further modification of the tender documents and the submission of a revised tender. This is the last opportunity that the client and consultant team will have to negotiate with tenderers while they remain subject to competitive pressures. Prior to the selection of the successful bid, the client may enter tender negotiations with two preferred tenderers.

The contract manager typically coordinates negotiations with the tenderers, but negotiations may be handled by the cost planner, contract manager, lead designer or architect, or by a client delegate, such as a project manager, at various times.

It is important that a complete audit trail of the whole tender process is maintained.

As this would form part of the contract documents, any agreements concluded should be carefully written and signed by all parties.

For each project, the needs, objectives, and value concept of the client will be specific, and so, final evaluation criteria will vary from project to project. Assessment requirements are referred to as ‘selection criteria’ during the prequalification process, whereas they are referred to as ‘award criteria’ during the tender procedure.

Historically, the lowest-price compliant bid may have simply been defined through the final evaluation of tenders. For very simple supply contracts, this may still be acceptable, but for building contracts, it may not result in the selection of the best value tender. Under such schemes, tenderers prefer to present low rates and then find ways to charge more after the deal has been won.

Complete Appropriate Client Contract for the Project

A well-drafted client contract agreement should provide the involved parties with information before anything else. In a client contract, the second most significant thing is the scope of the project. Unfortunately, when making the first drafts, it is also one of the most neglected elements of client contract drafting. Having a short section of your customer agreement that outlines the working arrangement between you and the customer is typically a smart idea.

As a contract writer, you must protect yourself from disagreements with clients. One of the easiest ways to prevent disagreements and ensure that you and your clients are on the same page is to write a great client contract.

Although the words ‘statement of work’ and ‘service agreement’ have undoubtedly been used, there are distinctions between the two and both are essential to your construction project.

The Statement of Work and Service Agreement may be two separate documents, but they can also be compiled into a single document for easier consolidation. If you have been in a business relationship with the client before, you can opt to simplify the service agreement (as you have collaborated with them before) and focus on the State of Work of the construction project.

For your project’s Statement of Work, this should include:

A clear description of your expected outcome and process that you will implement for the client
A list of circumstances or criteria that is outside the scope of the contract
The duties and responsibilities of the client
Scheduled dates for the commencement of the project and the various construction works
Methods of documentation for expenses and budget change requests
The terms of payment, including the invoicing procedures of your project

Provide Tender Documentation to the Appropriate Staff Member for Approval or Endorsement

Supervision & Inspection

In contracts where it is considered necessary, monitoring and review of the execution and progress of the contract are carried out before submitting it to your staff for approval and endorsement. In the case of contracts signed based on rough estimates, the procuring party can request invoices and records of attendance.

The tender documentation also mentions the time and place of the opening of the bids. For this reason, larger government agencies have special rooms. Bidders can be present at the launch of the tenders. The procuring agency will have workers present as witnesses if no bidders are present.

Contracting

Before approval or endorsement, if there is a change in the amount negotiated in the contract, a new contract may be concluded by means of a limited tender contract during the execution of the contract.

It is not, in general, possible to renegotiate contracts unless conditions make it appropriate to adjust if they remain within the basic terms of the initial tender. If no agreement can be reached, the tender will be awarded to another bidder, or the tendering process will be repeated if there are no other bidders present.

Contracts must be concluded for standard tenders within five days and for government tenders within ten days.

Contracting procedures

Contracting procedures may differ according to the procurement agency and the type of product or service purchased. A draft contract is also included in the bundle of tender documents given to prospective tenders. The final contract shall be drafted after the award of the tender and shall include the terms of the contract and the preparation and specification documents submitted for the tender.

After all tender documents have been prepared, they must be sealed and submitted to the tender notice and/or tender documentation at the location specified. It must be submitted to the appropriate staff for approval and endorsement. Documents can be sent by the tenderers themselves, by members or by mail in person.

The procuring body shall, after awarding the contract, notify the tenderers in writing of the outcome. The results of tendering are also published in a notice and made available after some time on the website of the entities. The winning bidder’s name and the winning bid are made public in the notice (with some exceptions).

Learning Activity 4: Obtain Tender Approval or Endorsement

Activity 4.1

Fill in the blanks The following are statements about the contents of a Statement of Work. Review each and complete the statement by filling in the missing words/phrases.

CPCCBC4013 Prepare and evaluate tender documentation

Activity 4.2

Identify the steps contracting procedure for providing tender documentation.

CPCCBC4013 Prepare and evaluate tender documentation

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CPCCBC4013 Prepare and evaluate tender documentation

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