What Is A Percentage Rate Contract?

Percentage Rate Tenders

In this type of Tenders a detailed estimate of the quantity of work to be carried

out along with the estimate rates is given in the price bid form. The Bidders are
required to quote the amount in percentage above or below or at Par.
In this form of contractor, the department draws up item rate tender i.e bill of
quantity and total amount.
The contractors are required to offer to carry out the work in accordance to the
rates shown in the specific price schedule or above or some percentage below
the rates indicated in the schedule of work attached with the tender.
The percentage above or below or at par is applicable on the completion of the
work.
 Percentage Rate Contract
Merits

The ranking of the contractors easily becomes known just as the tenders are opened.
As there is no provision to quote contractors own rate for an individual item, benefit due to increased quantity in
scope of work, by claiming increased percentage rate can not be availed by the contractor.
The chance of unbalanced tender gets eliminated.

Demerits
A contractor is required to write down only the percentage above or at par or below, it is easy to write such a
rate in few minutes before the time of submission of the tender.

By negotiating among the contractors, two or more may quotethe same rate in order to get a part of the work at a
high rate.There may be difficulty to divide the work at equal amountamong the contractors.
 Case Study Overview

PROJECT - Construction of two-lane Flyover at Thakkarbapanagar Cross Road

Junction across NH-8 at Ahmedabad.

ESTIMATED COST - Rs.17.45 Crores approx.

CLIENT AUTHORITY - AHMEDABAD MUNICIPAL CORPORATION

TENDER INVITATION BY Municipal Commissioner (AMC)

LOCATION - Ahmedabad
 Tender Details

Estimated Cost of Bid

Bid Security Period of
Name of Work Amount put to Document
(Rs.) Completion
tender (Rs.) (Rs.)

Rs. 17,44,533/-
Construction of
in form as 18 Months
Flyover at
stipulated in including
Thakkarbapanagar
Rs. 17,44,53,260/- tender. To be 25000.00 monsoon
Cross Road Junction
enclosed period
Across NH-8 at
alongwith the
Ahmedabad
technical bid.
 Bidding Instructions

Bids were to be accompanied by security of Rs. 17,44,533/- for the work

payable at Ahmedabad and drawn in favour of The Municipal Commissioner,
Ahmedabad Municipal Corporation.

Bid security was required to be as per format mentioned in the tender document
and needed to be valid for 45 days beyond the validity of the bid.

Bids had to be delivered to office of AMC on or before 16:00 hours on 29-08-

2008 by courier, registered post, speed post or hand delivery and the technical
bid was to be opened on the same day at 17:00 hours, in the presence of the
bidders
SUMMARIZED TENDER
INFORMATION
 Construction of Flyover at Thakkarbapanagar Cross Road Junction Across NH-8 at Ahmedabad
Name Of Work

Estimate Amount Put To Rs. 17,44,53,260/-

Tender
Contractor registered with Government of Gujarat in class AA category and special category I for bridges OR Contractor registered in similar class with other
Eligibility Criteria State Government, Semi Government Bodies or with Central P.W.D.

Rs. 17,44,533/- (Demand Draft or Bank

Bid Security (EMD)
Guarantee
Mode Of Submission Of
By courier, registered post or by speed post or by hand delivery
Bid

Opening Of Technical Bids Date: 29-08-2008 Time: 17:00 Hours

Will be declared at the time of opening of Technical Bid.

Opening Of Financial Bids

Tender Validity Period 180 days from the date of submission of the tender.

Defect Liability Period 365 days from date of completion

Maximum limit of liquidated damages for delay in completion of work will be 10% of the initial contract price rounded of to the neared thousand.
Liquidated Damages

Retention Money 1:
Retention Money. @2% of the value of work done will be deducted from each RA bill. It will be released along with release of payment of Final Bill.
Retention Money 2:
@5% of the value of work done will also be deducted from each RA bill which shall be released as mentioned in tender
Bank guarantee from a nationalised bank. Amount equal to 5% amount of contract price.
Performance Security
 Bidding Documents
The bidding documents to be submitted as part of the Bid :
 Preparation Of Bids
Language of the Bid
All documents relating to the bid were to be in the English language.
Documents comprising the Bid
The bid to be submitted by the Bidder as bid document was to be in two separate parts.
Part I -Technical Bid and comprising of :
(i) Bid Security in the form specified in Clause 14.0
(ii) Technical Information of the Bidder for Qualification
(iii) Undertaking that the bid shall remain valid for the period specified
(iv) Acceptance / non-acceptance of Dispute Review Expert
(v) Affidavit as per format provided in tender
(vi) Cost of Bid Document
Part II - Financial Bid comprising of :
(i) Form of Bid as specified in Annexure - II
(ii) Percentage quoted rate above or below schedule B as specified in Volume - III
(iii) Undertaking in form given in Annexure - III
Each part will be separately sealed and as per instructions in the tender.
2 copies were to be submitted , marked as original and copies
 Modification and Withdrawal of Bids

Bidders could have modified or withdrawn their bids by giving notice in writing
before the deadline

Each Bidder's modification or withdrawal notice shall be prepared, sealed,

marked, and delivered in accordance with tender specifications, with the outer
and inner envelopes additionally marked "MODIFICATION" or "WITHDRAWAL"
as appropriate.
 Bid Prices
The contract was for the works as per Bill of Quantities described in the tender.
The bidder had to quote his percentage rate above or below both in figures and words
of the Works described in the schedule along with total bid price (both in figures and
words).
All duties, taxes, and other levies payable by the contractor under the contract, or for
any other cause were to be included in the rates, prices and total Bid Price submitted by
the Bidder
The rates and prices quoted by the bidder had to be fixed for the duration of the
Contract and were not to be subject to adjustment on any account
Currencies of Bid and Payment
The unit rates and the prices had to be quoted by the bidder entirely in Indian Rupees.
All payments would be made in Indian Rupees.
 Bid Opening and Evaluation

Bid Opening
The Client was to open all the Bids received (except those received late),
including modifications made in the presence of the Bidders or their
representative who chose to attend.
The envelope containing Technical Bid was to be opened.
The amount, form and validity of the bid security furnished with each bid was to
be announced. If the bid security furnished did not conform to the amount and
validity period as specified in the Invitation for Bid the remaining technical bid
and the sealed financial bid was to be returned to the bidder terming it as non-
responsive.
 Bid Opening and Evaluation

Declaring Time for opening Financial Bid

Subject to confirmation of the bid security by the issuing Bank, the bids
accompanied with valid bid security were to be taken up for evaluation with
respect to information furnished in Technical Bid of the bid
After receipt of confirmation of the bid security, the bidder was to be asked in
writing (usually within 10 days of opening of the Technical Bid) to clarify or
modify his technical bid, if necessary, with respect to any rectifiable defects.
The bidders would respond in not more than 7 days of issue of the clarification
letter, which will also indicate the date, time and venue of opening of the
Financial Bid (usually on the 21st day of opening of the Technical Bid)
 Bid Opening and Evaluation

Opening of Financial Bid

Immediately (usually within 3 or 4 days), on receipt of these clarifications
the Evaluation committee would finalise the list of responsive bidders
whose financial bids are eligible for consideration.
At the time of opening of Financial Bid, the names of the bidders who
were found responsive in accordance were to be announced. The bids of
only these bidders would be opened. The remaining bids would be
returned to the bidders unopened.
The responsive Bidders names, the Bid prices, the total amount of each
bid, any discounts, Bid Modifications and Withdrawals, would be
announced by the Employer at the opening.
 Clarification Of Financial Bids

To assist in the examination, evaluation, and comparison of Bids, the Client could,
at his discretion, ask any Bidder for clarification of his Bid, including breakdowns
of unit rates.
But no change in the price or substance of the Bid shall be sought, offered, or
permitted except as required to confirm the correction of arithmetic errors
discovered by the Client.
 Evaluation Of Financial Bid

During the detailed evaluation of the Financial Bid, the responsiveness of the
bids will be further determined with respect to the remaining bid conditions, i.e.,
priced schedule ,technical specifications, and drawings.
A substantially responsive Financial Bid is one of which conforms to all the
terms, conditions, and specifications of the Bidding documents, without material
deviation or reservation.
If a Financial Bid is not substantially responsive, it will be rejected by the Client,
and may not subsequently be made responsive by any form of correction or
withdrawal.
 Correction of Errors

Financial Bids determined to be substantially responsive will be checked by the client

for any arithmetic errors.
Errors will be corrected by the Employer as follows:
a) Where there is a discrepancy between the rates in figures and in words, the rate in
words will govern; and
b) Where there is a discrepancy between the unit rate and the line item total resulting
from multiplying the unit rate by the quantity, the unit rate as quoted will govern.
The amount stated in the Financial Bid will be corrected by the Client in accordance
with the above procedure and the bid amount adjusted with the concurrence of the
Bidder in the following manner:
a) If the Bid price increases as a result of these corrections, the amount as stated in the
bid will be the bid price and the increase will be treated as rebate;
b) If the bid price decreases as a result of the corrections, the decreased amount will be
treated as the bid price
 Award Criteria

The Client will award the Contract to the Bidder whose Bid has been determined
(i) To be substantially responsive to the Bidding documents and who has offered the
lowest evaluated Bid Price; and
(ii) To be within the available bid capacity (In case of multiple similar works) adjusted to
account for his bid price which is evaluated the lowest in any of the packages opened
earlier than the one under consideration.
In no case, the contract shall be awarded to any bidder whose available bid capacity (In
case of multiple similar works) is less than the evaluated bid price, even if the said bid is
the lowest evaluated bid.
The contract will in such cases be awarded to the next lowest bidder at his evaluated
bid price.
The same process will be continued in case the second lowest bidder fails to meet with
the bid capacity criteria described.
IMPORTANT FORMATS
FOR SUBMISSION
ANNEXURE -1 : FORMAT FOR AFFIDAVIT SUBMISSION
ANNEXURE 2- FINANCIAL BID
ANNEXURE 3 : UNDERTAKING FOR PERCENTAGE RATE
ANNEXURE 4 : LETTER OF ACCEPTANCE AS RESPONSIVE BID BY CLIENT
 BIBLIOGRAPHY
Tender document - www.egovamc.com
http://drsmau.in/pdf/contracts.pdf
https://tenders.iitm.ac.in/sites/default/files/CPWD%20Form%208%2
0-%20Annexure_//10