Civil Engineering Project Management (4th Edition)

78 Civil Engineering Project Management
Please now produce your Performance Bond and evidence of insurances as
required under the contract.
Yours faithfully,
Clerk to the Authority
If an authority empowers its chief executive to accept a tender on its behalf,
or a company allows its director to accept a tender, the letter can be a direct
acceptance. However, if the authority or company is employing a consulting
engineer to correspond with tenderers, then the consulting engineer usually
has no authority to accept a tender, so he can only advise a tenderer that the
authority or company have decided to accept his tender in terms similar to
the above, or perhaps in the form ‘On behalf of the …’ or ‘I am instructed
by the … Council to inform you that your tender is accepted, etc.’
Where acceptance of a tender is not possible for some time, for example,
because it requires agreement from government or from some international funding
agency, etc., a ‘Letter of Intent’ can be issued by the employer. This states the
employer’s intention to sign a contract and may therefore request the contractor
to start on some aspect of the work. The Letter of Intent must state what work can
be started, and how and what payment will be made for such work should the
contract not be signed. There will also be a clause which provides for the Letter of
Intent to become void upon signing of the contract. The contractor has to respond
accepting the terms of the Letter of Intent. Usually the matter is discussed prior,
so that the terms of the Letter of Intent are agreed before it is written. However, a
Letter of Intent can prove full of legal pitfalls should anything go wrong, so it is
best avoided. It can be useful, however, for authorizing a plant supply contractor
to start producing designs and drawings of equipment he is to supply, that is,
work which saves time but involves no large financial commitment.
A tender needs to be accepted within a reasonable time of its submission,
otherwise a contractor may have grounds for withdrawing it. Sometimes the
employer stipulates for how long tenders are to remain open for acceptance,
or a tenderer may state this in his offer. A contractor is put in a difficult position
when there is an unexpected delay in accepting his offer because,
although he does not wish to lose a job, the delay can cause his costs to rise
if prices are inflating or work he hoped to undertake in two summers and a
winter is delayed to take place during two winters and a summer.
Publications giving guidance on tendering
Tendering for civil engineering contracts. ICE, 2000.
Tendering procedure: procedure for obtaining and evaluating tenders for civil
engineering contracts. FIDIC, 1982.
Standard pre-qualification form for contractors. FIDIC.