Page 91 - Civil Engineering Project Management, Fourth Edition

Civil Engineering Project Management
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6.9 Offer by a tenderer to complete early
Atenderer may state in his offer that his prices are dependent on being permitted
to complete the works in a shorter time than the period for completion stated in
the contract documents. This offer must be looked at with care because it implies
that other separate contracts the employer may have let for supply of plant to
be incorporated in the works must be speeded up also. Similarly any nominated
sub-contractors must deliver earlier, and the engineer must be able to provide all
outstanding design details according to the shorter programme. It is, of course,
a benefit to an employer to have his works completed earlier: it can reduce his
capital borrowing charges and enable him to gain an income from the works out-
put earlier – though he must be able to accelerate his payments to the contractor.
The question that arises, however, is whether the contractor’s shorter time period
should be substituted for the period for completion stated in the contract.
It is true that speedy construction can maximize a contractor’s profit or
permit him to offer a lower price, but this need not be his only motive. A con-
tractor may say he can complete a project 3 months early if he suspects the
job is so liable to delay by other contractors, nominated sub-contractors, extras,
incompleteness of designs or unforeseen conditions, that he runs little risk of
having to abide by his promise and indeed may be able to claim extra pay-
ment for any delay caused to him.
Therefore adoption of the contractor’s time as the contract period for com-
pletion needs careful consideration and the position must be resolved clearly
before award of the contract. The contractor might have second thoughts
about his offer because he would become liable to liquidated damages if he
did not complete in the time he offered.

6.10 Procedure for accepting a tender

After the closing date for tenders, and if tenders have not been publicly
opened, contractors will be anxious to discover where they stand: either to
prepare themselves for holding discussions over their tender, or to divert their
energies elsewhere if they find themselves unlikely to be offered the contract.
If prices have not been arithmetically checked, it is inadvisable to give any
information lest it turn out misleading. However, when the ranking of tenders
has been checked, it should be possible to inform contractors enquiring if they
are unlikely to succeed. Once a decision has been made by the employer, all
tenderers should be informed by a standard letter, stating the prices received
but not identifying the tenderers who submitted them.
A valid contract must incorporate three basic elements:
• an offer (e.g. the tender) and its acceptance;
• consideration (i.e. the contractor undertakes to construct the works and
the employer undertakes to pay him for them);