What is Tender? Classification of Tenders.
What is Tender?
A tender is an offer in writing for executing certain specified work or supplying specified materials subject to certain terms and conditions like rates, time limit, specification etc.
Depending upon the type of contract, the tender may be lump-sum tender, item- rate tender, cost – plus tender, labour tender, demolition tender etc. The tenders may be invited either by private owners or by public notice or by negotiations. The tender may either be open tender or selective tender. The open tender is for all reputed contractors, firms, PSU’s and thus the tenders for the project are received on competitive basis. In case of selective tender, the architect after consultation with his client, invites a limited number of contractors for filling up the tender of the project.
Classification of Tenders:
The tenders can be grouped in the following three categories :
- Open or Public Tender
- Selected or Limited Tender
- Negotiated Tender
Open or Public Tender :
In this type of tender ,any contractor can enter into competition and all formalities of giving opportunity to compete are to be fulfilled. It is compulsory for public works and because of competition, it may result in low cost. But there are chances of dispute as mistakes found out at a later stage are difficult to be adjusted.
Selected or Limited Tender:
For this type of tender, the architect after consultation with his client, invites a limited number of contractors for filling up the tender of the project. It results into competition on a small scale. But it proves to be useful for specialized and skilled works. It also leads to early successful completion of the project.
This is the advanced from of selective tender and the contract is given by negotiations with one or at the most two contractors. As such, there is no competition in this type of tender and hence it may to be costly. But when the work is to be completed in target time without sacrificing for the quality, the negotiated tender may prove to be the only alternative.