Unit 9- Commercial aspects of engineering organizations Shaakeeb Azhad Khan Unit 9 – Commercial Aspects of Engineering Organizations Task 1: Give definition of the term ‘tender’ and list two types of tender. You must cite your sources. Answer: The word tender is a kind of a contract that is mostly followed by the public companies when the government wants to construct bridges, roads, etc. They hire a company and ask them to give their quotation, which means the minimum amount, which is required to complete the project, The one who quotes the least price gets the contract, which is called a tender. Tendering is a process of making an offer or proposal or showing interest in response to an invitation for a tender. Organizations and government will seek other businesses and companies to respond to a particular need and will select an offer or tender those meets their needs and provide the best value for money. Tenders can be classified based on the requirement category. There are various types of tenders Open Tender: Open tender is an arrangement where an advertisement in local newspapers or trade journals invites contractors to apply for tender documents. Open Tender is a transparent process which ensures that only the contractor with the best price and meeting all the technical requirements will win the tender. The fundamental requirements of open tendering are that they should: Be open to all qualified and interested bidders, Be advertised locally (and internationally, when required), Have objective qualifications criteria, Have neutral and clear technical specifications, Have clear and objective evaluation criteria, and Be awarded to the least-cost provider, without contract negotiations. Open Tendering process can have disadvantages Lengthy timeframe for completion of the procurement action, Requires strict adherence to procedures, Assumes existing internal capacity for the completion of clear and precise specifications, Restricts suppliers’ participation in determining the technical specifications, Limits the possibility of building long-term relationship with suppliers, Focuses only on a least-cost solution, Suppresses innovation, and Excessive formalism may limit supplier participation in the tendering process. Mr Abdi Hubsey 1
Unit 9- Commercial aspects of engineering organizations Shaakeeb Azhad Khan Limited Tender: Limited tendering involves issuing tenders to few selected tenderers only. In Limited Tenders, only pre-qualified or known bidders are allowed to participate. Limited Tenders are not advertised in newspapers; as a result other bidder generally does not come to know that such tender is floated. The Lowest Bidder generally wins the contract.
- Spring '16
- Business, Mr Abdi Hubsey, commercial aspects, Shaakeeb Azhad Khan