A contract or tender document in construction industry is an agreement between two parties which they intend to be legally binding with respect to the obligations of each party to the other and their liabilities. The contract thus binds the contractor to construct the works as defined, and the employer to pay for them in the manner and timing set out.
As civil engineering works are often complex, involving the contractor in many hundreds of different operations using many different materials and manufactured items, including employment of a wide variety of specialists, the documents defining the contract are complex and comprehensive.
The task of preparing them for tendering therefore warrants close attention to detail and uniformity of approach, so as to achieve a coherent set of documents which forms an unambiguous and manageable contract. A typical set of documents prepared for tendering will include the following.
Instructions to tenderers
These tell the contractor where and when he must deliver his tender and what matters he must fill in to provide information on guarantees, bond, proposed methods for construction, etc. The instructions may also inform him of items which will be supplied by the employer, and sources of materials he should use (e.g. source of filling for earthworks construction, etc.).
General and particular conditions of contract
The general conditions of contract may comprise any of the ‘standard’ forms of contract. The particular conditions adopted may contain amendments or additions that the employer wishes to make to the standard conditions.
Usually the standard conditions (which are available in printed form) are not reproduced in the tender documents but they will be named by specific reference and a schedule will show what changes have been made to them.
This describes in words the works required, the quality of materials and workmanship to be used, and methods of testing to be adopted to ensure compliance.
The specification usually starts with a description of the works to be constructed, followed by all relevant data concerning the site, access, past records of weather, etc. and availability of various services such as water supply, electric power, etc.
Bill of quantities or schedule of prices
These form an itemized list covering the works to be constructed, against each item of which the tenderer has to quote a price. A bill of quantities shows the number or quantity of each item and its unit of measure, the rate per unit of quantity quoted by the tenderer, and the consequent total price for that item.
This permits re-measure according to the actual quantity done under each item. Some bills contain many hundreds of items, classified by trade or according to a standard method of measurement; other bills contain a less number of items.
A schedule of prices may comprise a series of lump sums or it may call for rates only, but can list provisional quantities which are estimated, that is, uncertain. They would be used, for instance, for a contract for sinking boreholes, items being provided for boring in stages of depth, the total depth to which any hole has to be sunk not being known in advance.
Tender and appendices
The tender sets out the formal wording which comprises the tenderer’s offer to undertake the contract, the tenderer having to enter the sum price he offers.
The appendices to tender will contain other matters defining the contract terms and which the tenderer confirms he accepts in making his offer, such as time for completion of the works, damages for failure to complete on time, minimum amount of insurances, completion of bond, etc.
There may be other matters concerning the basis of his offer he is required to supply, such as currency exchange rates (for international contracts) or sources of materials.
The contract drawings
These should provide as complete a picture as possible of all the works to be built. The more complete the contract drawings are, the more accurately the contractor can price the work, and the less likelihood there is that variations and extra payments will be necessary.
However, it is not necessary at tender stage to provide every detailed drawing that will ultimately be required (such as all concrete reinforcement drawings) so long as the contract drawings provided to tenderers show quite clearly what is required.
On small jobs all the foregoing documents may be combined in one volume; but on most jobs at least two and sometimes three or more volumes will be necessary. A tenderer is usually sent a second copy of the instructions to tenderers, bill of quantities, tender and appendices, so that he can keep one copy of what he has bid.