 It is an invitation from the owner to the contractor to

execute some work at specified cost in specified time. It

is published in the form of tender notice in news papers,
notice boards etc. according to the cost of works.
OR
 It is an offer in writing to execute some specified works
or to supply some specified works or to supply some
specified articles subject to certain terms and conditions
like rates, time limit etc. between the contractor and the
department or owner party.
• Public tender–It is invitation of tenders by
open advertisement through the Indian Trade
Journal or through the principal newspapers
in India or Abroad.
• Limited tender—This is direct invitation only
to a selected no. of contractors to quote rates
for supply of articles. Limited tendering for
works shall be adopted if only a limited
number of tenderers are known to possess
requisite skills, technology and resources, by
reason of their high complex or specialized
nature, or for works of a secret nature.
 Classification of tenders
• Single tender—Invitation is given to only one firm to
render a service by quoting their rates. If the quoted
rates are high, it will be negotiated to the agreement of
the contract.
• Rate contract—usually adopted for supply of materials,
machine, tools & plant, etc. (items to the store). It
specifies the supply at a fixed rate during the period of
contract. The quantities are not mentioned in type of
contract and the contractor is bound to accept any order
which would be placed before him.
• Negotiation: Identification by the employer of a suitable
contractor to negotiate with. The contractor can be
selected either from the employer's own list of
preferences or on the advice of the professional team.
The contractor being apprised of the workscope. The
selected contractor is issued with details such as the
scope of work involved, relevant drawings, design and /or
information to enable him to appreciate the extents of
obligations and the employer's actual needs. Negotiate
the rate with the contractor
Tender for work or supply are invited by issuing tender notice in
prescribed form. Following particulars are given in the tender
notice
1. Name of the authorities(deptt.) inviting tender Exa: Govt. of Tamil Nadu
Water Resources Organisation Public Works Department (PWD),
1. Project name and its location
2. Notice Number
3. Estimated cost
4. Last date and time of receipt of tender
5. Period of availability of tender document or validity of tender
6. Cost of tender document
7. Time of completion and type of contract
8. Earnest Money Deposit to be paid & security deposit
9. Date, time and place of opening the tender
10. Designation of the officer opening the tender
When work is to be completed very quickly or no contractor
prefers to accept the work (THE TENDER IS FLOATED),
then a notice with short duration is again published by the
client. Such a tender notice is called “SHORT TENDER
NOTICE”.
The terms and conditions remain the same as that for
ordinary tender notice.
 It is part of tender document. Tender form is printed standard form
of contract giving standard conditions of contract, general rules and
directions for guidance of contract.
 There is also a memorandum for giving
1)General description of work
2)Estimated cost
3)Earnest money
4)Security deposit
5)Time limit in months /years
6)Column for signature of contract before submission of tender,
signature of witness to contractor’s signature and signature of the
officer by whom accepted.
 The price of the tender form is given on the form. This printed form
and other documents are to be purchased on cash payment from the
office inviting tender during office hrs on all working days.
Various condition & terms of contract which are to be
formulated while inviting tender for a civil engineering work
are:
 The Notice Inviting Tenders (N.I.T) is a standard approved
form of a department
 Tender form with standard conditions of contract (printed
form)
 Schedule of quantities of work to be done and materials, tools
and plants to be supplied by the department if any
 Special terms and conditions
 Complete specification of work to be executed
 Tender Documents
 One set of approved drawings where necessary
 All the documents are signed by the contractor page by page,
forwarding letter head of a contractor with bank draft (or other
form of earnest money) are put in closed cover.
 Then the cover is closed and dropped in the tender box within
the time limit for tender.
 The name of the work and the name of the contractor are
mentioned on the cover.
1. The notice inviting tender in specified form like PWD 6
2. Layout plan, location of work
3. Division in which location is situated
4. Schedule of quantities of work
5. Nearest road/railway link
6. Set of drawings including working drawings
7. Availability of materials in the vicinity
8. Detailed specifications or reference to standard specifications
for each item of work
 Information to be given in a tender
document
10. Complete architectural and structural drawings
11. Schedule of tools & plant and other facilities to be made
available by the owner, indicating the conditions, hire
charges and place of delivery
12. Rate of supply of power and the point of supply
13. Location of water supply point
14. Time for completion and the progress to be made at intervals
of time
15. Conditions regarding employment of technical personnel
16. Weather conditions in the area
17. Amount of EMD and the form in which it is to be paid
 Information to be given in a tender
document:-
18. Insistence on Income tax and sales tax clearance certificate
19. Amount of Security deposit to be paid/ deducted from
running bills of contractors should be notified in the tender
call notice
20. Mode of payment for work done
21. Penalty conditions for slow progress and delay in the
completion of work
22. Designation of arbitration (technique for the resolution of
disputes outside the courts)authority in case of disputes
 The amount of deposit asked along with the filled in tender or a rate quotation is called
an Earnest Money Deposit. E.M.D. shows that the contractor is earnest and sincere about
this business with the owner. Further it means, that when called upon to complete the
business, he should not shrink or avoid.
 1% - 2% of the estimated cost of work is the Earnest Money Deposit (EMD).
 This amount shall be placed with the office of the architect, without any interest payable
on it
 The deposit amount shall not be held for more than a month from the date of a receipt
of the tender.
 The deposit shall be refunded in full to the unsuccessful contractors; no sooner the
decision is made on the tenders received.
 In case of successful contractor to whom the work is awarded, this earnest money
deposit becomes apart of security deposit and continues to be with the architect's office
till the virtual completion of the work
 On virtual completion of the work, the contractor shall apply to the architect's office for
the refund of the amount.
 This amount is refunded in full by the architect's office directly to the contractor and
intimation in writing is given to the owner.
 In case of the contractor who is unable to commence the work when called upon to do
so, this amount of E.M.D. is forfeited and is credited to the owner as a part of
compensation for the hardship the owner has suffered.
 Restriction on unnecessary competition: contractor with low
sound financial position may also submit tender with low price
which may late lead to great difficulties in completion of
work. Thus provision of EMD will restrict competition among
sound financial contractors who are capable of completing
work.
 Punishment: Contractors with no intension of work may
quote low rates. They may be punished by forfeiting EMD.
 Compensation: In case if lowest contractor refuses to do
work it may be allotted to second lowest contractor and EMD
will be forfeited from first lowest contractor
 Security deposit is the amount of money which is deposited
by the contractor to the owner before awarding a work, whose
tender has been accepted in order to render himself liable to
the department to pay compensation amounting to the part or
whole of his security deposit if the work is not carried
according to specifications.
 This amounts is generally 5% to 10% of estimated cost of the
project and is inclusive of the EMD already deposited by the
contractor along with the tender.
 This will be refunded after the completion of the project.
 No interest is paid on SD.
 SECURITY DEPOSIT

The contractor has to fulfill all the terms and conditions laid
down in the contract and maintain quality and speed
satisfactorily. If he fails to do so, a part or whole of the SD is
forfeited by the department.
If there is any fault in the construction and the contractor
refuses to demolish and reconstruct then the department will
carry out that work using the SD.
 Following are the main reasons for security deposit:

 Deposit for loans: It serves as security against the materials or

the plants and machinery supplied by the department to the
contractor as a loan.
 Punishment: on incomplete work in time, use of inferior
quality of material, leaving work incomplete SD if forfeited as
punishment.
 SD is refunded after successful completion of work with in
specified time. It is refunded after the first maintenance is done
which is six months.
 When any claim or payment arises out of or
under the contract against the contractor.
 Engineer in-charge is entitled to withhold & also
have lien to retain sum or sums in whole or in
part from security deposit till finalisation or
adjustment of any such claim
 If security deposit is insufficient to cover the
claim,the engineer in charge is entitled to
withhold and have lien to retain from any sum or
sums found payable to the contractor under the
same contract or any other contract pending
finalisation or adjustment of any such claim.
Security Deposit
This is compulsory to be deposited
before entering into a contract
The amount depends on the tendered
amount
This is refundable after the maintenance
period is over
The amount cannot be collected from
any other contract even under the same
Engineer-in-Charge.
This is meant for non fulfilment of the
conditions of contract against a tender
This is a compulsory clause of the
condition of contract
Retention Money
This is not compulsory and rarely arises
out of a contract.
It has no relation with the tendered
amount but depends upon the amount of
claim against a contractor.
This has no relation with the maintenance
period and can only be released after the
finalisation or adjustment of the claim.
The amount can be withheld from any
other contract under the same Engineer-
in-Charge.
This is meant for fulfilment of any claim
against this tender or other tender under
the Engineer-in-Charge.
This is not a compulsory clause and is
provided in some tenders as an additional
clause.
Registration of contractors:-
 The contractor must get himself registered in the departments (
or Government - govt. Contractor) for which he is interested to
take up works.
 Government contractors are entitled to do govt. jobs if
awarded.
Contractors are classified according to the registration and
registration fees and depending on this they can undertake
works up to certain amount.
 To get a contractor to be registered under certain class, he has
to apply to the competent authority.
1. Current income tax certificate
2. Work certificates for all the works performed
during the last three years and those in progress
3. Solvency certificate (proof that the person's assets are
more than his liabilities) for an appropriate amount
4. Attested copy of deed of partnership and power
of attorney on stamp paper if needed
5. Undertaking for employment of the Class I & II
staff
6. Application in duplicate with all documents
7. Attested photos of all the partners if any
 All the tenders should be sealed and submitted to the
respective officer, before the time and date as
mentioned in the tender note.
 At the described date, time and place all the received
tenders will be opened in the presence of intending
tenderers or their authorised agents.
 The rates quoted by the various tenders shall be read
out by the officer.
Following points should be observed while opening the tenders:

1.The tender should be opened in public at ….on …..in the office of the
…..and rates will read out in presence of the owner or committee
members and tenderers or their respective representative as are
present.
2. If the owner is not present, the architect along with one assistant
should open the tender. The architect shall scrutinize the same,
prepare the comparative statements and forward them to his client,
with his recommendation as to whom the work should be awarded and
why.
3. A record must be kept for the list of tenderers and the money
deposited by them. The earnest money should preferably be accepted
in the form of bank draft.

4. The lowest tender should be accepted after close investigating the

reputation and standing of that contractor.

6. It is essential to ensure that they have been thoroughly checked

and are without any mistakes.
 List of all tenders received along with the details of
EM received should be prepared.
 It should be checked that every tender should be
duly signed by the contractor.
 The address of contractor should be clear and
complete.
 Verification of contractor conditions should be
done.
 Rates should be mentioned in both figures and
words, both should be same, if there is any
difference lowest should be accepted.
 Scrutiny of tender cont.…
 Calculations done by contractor and the total
cost of the work should be carefully checked.
 After tender have been opened, a comparative
statement is prepared in presence of the
tender opening authority and got signed by
them.
 Then compare the rates of various tenders in
respect of each item rate against the estimated
rate.
 Based on the comparative statement, usually the
lowest tender is accepted, while accepting the tender,
the tender accepting authority shall satisfy the
following regarding the tenderers.
1) the financial status of each tenderer.
2) capacity to do the work
3) past record as contractor such as experience,
procurement of labourer etc.
Acceptance of tender
 For valid reason, a tender other than the lowest can be
accepted . The fact is to be recorded with full reasons. A
report on this to be submitted to the next higher authority. A
suitable reason is also mentioned in the comparative
statement. The tender accepting authority himself has to sign
the comparative statement and record his remarks.
 Two tenders have quoted the same lowest rates
 When all the tenderers have quoted abnormally high rates
 Sometimes only one tenderer may respond to the tender call
A. General conditions:
1. Regarding drawings
2. Reg IS specifications
3. Reg Bill of quantities and schedule of prices
4. Reg notice and arbitration(form of alternative dispute resolution)
B. Labour and personnel conditions
1. Regarding accidents to workmen at sight.
2. Reg presence of contractor representative at the sight supervision
of work
3. Reg removal of employees from the contract
4. Reg rate of wages of the labour
5. Reg labour amenities
C. Execution of work conditions
1. Reg defects in work and its removal
2. Reg quality of materials and workmanship
3. Reg additions, alterations, omissions during progress of
work
4. Reg damages to the work, to the dept, to the contractor
5. Reg precautions during blasting, showing , undepinning etc.
6. Reg doing of work on holidays and night etc
D. Measurement and payment conditions
1. Reg measurement of completion of work
2. Reg mode of payment
3. Reg extension of time limit of the contract
4. Reg non-completion of work in time
5. Reg bankruptcy ( is a legal status of a person or other entity that cannot
repay the debts it owes to creditors)of the contractor.

6. Reg right of owner to suspend work

7. Reg getting the work done by another contractor in case of
failure of the contractor etc.
F. General Obligations of contractor, conditions
1. Reg Act, Bye-Laws and regulations
2. Reg fencing, watching and lighting the sight
3. Reg insurance of workers, works etc
4. Reg access to work
For small jobs, the owner/engineer gives an
offer to the contractor for quoting rates for
works and supplies required.
No EMD is required with a quotation.
It is an amount of compensation payable by a
contractor to the owner due to delayed
construction. This amount of compensation is not
related with real damage. This does not relieve the
contractor from his obligations and liabilities under
the contract. In case if a part of the project or
premise is used by the owner before its
completion, the amount to be paid is reduced in
proportion to the value of the part that has been
utilised, after issuing the certificate of occupancy.
It is an amount of compensation payable when a
contract is broken. The party who suffers such a
breach is entitled to receive this amount from the
party who has broken the contract.