Examination of Conditions of Contract

This document provides a detailed examination of the conditions of contract, including a risk assessment. It also discusses special conditions of contract and their implications. The document further explores the existing construction and estimated workload. It helps in deciding whether to tender and provides an analysis of the tender documents. Additionally, it guides in preparing a draft program of work and developing a tender strategy. The document also covers the submission of the response to the invitation to tender and considers alternative proposals.

Examination of the conditions of contract
There are various items of Conditions of Contract determined by the architect,
which will form part of the main contract.
Although the majority of conditions reflect the intention of the main contract, there are
some conditions that need to be considered as part of a risk assessment – these
being:
Restriction: Are there restrictions of the building including limited hours for the
construction.
Completion : Does the work have to be completed once as a whole?
Risk: To what extend do you know the client? Any strained relationship?
There are special conditions of contract:  yes  no
These are:
Lump Sum:
This condition applies where there part the work under contract that is to be paid using lump
sum means.
Media releases: There will be no release of any information regarding the processes to the
media.

Examination of existing construction and
estimated workload
The company’s existing workload at this stage consists of the following projects at
the stage of construction shown.
Project Project description Stage of project Estimated
completion
Nile Bridge
construction
Building New Bridge Ground Breaking 2022
Beta Road Tarmacking road Final stages Sept 2019

Deciding on whether to tender
The following questions are to be answered:
1. Is sufficient time allowed for the proper preparation of an estimate and
subsequent tender?
The tender documentation allows four weeks to complete the tender
submission.
This is enough time:  yes
2. What are the standard conditions of contract?
Refer to Annexure Law of South Australia to apply to this contract
3. Have the standard conditions of contract been altered in any way which may
vary the risk?
 No
Refer to Checklist analysis.
4. Are all the drawings and all the pages of the specification and the BOQ and
other documents included?
 yes
5. Are the operating conditions defined clearly, or will further information be needed
on such matters as:
a) commencement and completion dates  yes
stages and timing of work  yes
c) access to site  yes
d) restrictions on hours during which work may be executed  yes
dangerous or unpleasant conditions?  yes
6. What is the value and extent of the project and what is the company’s own
contribution likely to be?
The project is estimated to cost $ 356000.The company is expected to deliver on the entire project using
relevant resources including labor and materials
7. Is the design well developed?  yes
Have the documents been prepared hastily?  yes
8. Have bills of quantities been produced in accordance with the Australian
Standard Method of Measurement of Building Works?  yes
9. What method has been used?
Analytical method

10. If bills of quantities have not been prepared as a tender document, has
consideration been given to the time required to complete the estimate?
 yes
11. What is the workload in the office in relation to the time required to prepare
quantities?  medium
12. If quantities have to be taken off, are the drawings and specifications adequate?
 yes
13. Is there sufficient detail given to take off the quantities?  yes
Completion of an enquiry record form:
PROJECT TITLE/DESCRIPTION:
Documents received
Date 0 6 / 06/2019
Close of tenders am/pm
Date / /
Approximate value
$350000
ENQUIRY DETAILS:
Location:
Client: Type: Consulting engineers:
Architect:
BRIEF DESCRIPTION OF WORK INVOLVED:
VALUE OF PC & PROVISIONAL SUMS INCLUDED:
Nominated subcontractors Nominated suppliers Provisional sums Contingencies

CONTRACT:
Form of contract:
Onerous conditions/alterations to standard form:
PARTICULARS OF CONTRACT INFORMATION:
Defects liability period: Professional fees: Possession date: Completion date:
Liquidated damages: Provisional delay period:
working days
Early completion
bonus:
Progress claim
frequency:
Time allowed for
payments:
Specified security type: % Retention fund limit: % Unconditional
guarantee:
Final certificate issue
period:
Overdue payments
interest rate %
PC sums for which contractor may tender:
Estimator’s comments: Written offer/
Tender forms } delete if N/A
No. of tenders (if known)
Decision: Accept/Decline
Signed:
Carry out a detailed examination of the tender documents

Prepare a draft program of work to prepare the
tender document
PRE-TENDER PROGRAM
CONTRACT:BOX 987 SYDNEY CLIENT: OWILI MIX DATE: 12/06/2019
CONTRACTOR:AWILI CHARLES ARCHITECT:VODAFON JARED
PREPARED BY:TAKATAKA
TENDER
STAGE
Person
responsible
WEEK 1 WEEK 2 WEEK 3 WEEK 4
M Tu W Th F M Tu W Th F M Tu W Th F M Tu W Th F
Receive
documents &
study
Manageme
nt team
Site visit &
report
Archirect
Construction
program
Contractor
Method
statement
Contractor
Select sub-
contractors
s/c
Client
Choice
Select
suppliers
Tenderer
Requests for
s/c quotes
From
tenderers
Requests for
supplier
quotes
From
Contractors
Receive
quotes
Contractors
Compile
estimate
Quantity
Surveyor
Preliminaries
Tender
report
Tendering
committee
Adjudication
of tender
Legal officer
of company
Tender
submission
Tendering
team leader

Develop a tender strategy:
Strategy main
points
Strategy considerations Strategy implementation
Conduct a
meeting
Prepare an agenda Discuss:
•Nature of the contract
•Requirement
•Level of preparedness
•Possible approach
•Strength and weaknesses
• eg decision to tender
Analysis of
competitors
Who are we competing
against?
What are our prospects of
winning?
How prepared are our competitors
What else can be made to improve our
chances of winning the contract?
Key performance
indicators
Level of service in regards
to project management
Do they require any
special services?
What are their greatest
needs or problems?
Involvement/relationship
with client
Use of
communication/technology
Conflict
Special requirement
What kind of the services if any?
Just normal/crisis
Establishment of very cordial
relationship with the client
Focusing on face to face communication
to improve on the trust
Using the best mechanisms possible
while solving the possible conflict which
may arise.
Our performance What service can we
offer?
What makes our
service/people special?
How will our company
benefit from this?
How can we demonstrate
this?
Construction Services
TIMELY as well as quality work
Improved image of the
company/Business growth

Strategy main
points
Strategy considerations Strategy implementation
Project
requirements
Have we identified the
project’s perceived needs
and expectations?
From the simple needs to the perceived
complex requirements.
Analysis of the
tender documents
Technical issues
Commercial issues
Contractual issues
Checking on the issues including
architectural drawing
Mode of the payments
Any conflicting clauses application
Analysis of the
potential contract
Review the contract for
risk
Just to ascertain the accepted terms and
condition of the contract.
Project team Determine the people
whom the organization
wishes to use
Determine a professional
structure
Determine how decisions
will be made
Determine the decision
makers
Majority of the people to be use in the
provision of the labor services
Hierarchical, from management level
down to the subordinate
Consultative approach
Employees and management

Technical analysis of the tender documentation
Item Description Response
Tender response
schedules
Have tender response schedules been
provided?
 yes
Numbering format
used in the tender
document
Has a set format for responding been
specified?
 yes
Response to
tender
Is it in a simple format?  yes
Specified
requirements
Has a checklist been prepared?  yes
Tender information Has all the information requested been
provided?
 yes
Meet selection
criteria
Does the tender clearly demonstrate the
ability to fulfill all mandatory criteria?
 yes
Price and cost
schedules
Has the costing for all items been completed
and followed GST requirements?
 yes
Conditions of
contract
Has an explanation been provided where the
tender has exceeded or only partially
complied with the conditions of contract?
 yes  no
Referees Are any referees required?  yes
Quality assurance Are any supporting documents required – and
are they attached?
 yes
Alternative tender Can an alternative proposal be considered?  yes
Amendments Have there been any tender amendments
issued and have these been addressed?
 no
Value for money Is the tender competitive?  yes

Commercial analysis of the tender documentation
Item Description Response
Tender
sustainability
Is the tender affordable?  yes
What is the opportunity to tender cost?  yes; Low
Core business
alignment
Why does the company want to win the
opportunity?
 yes :Business
growth
How well does it fit in with the company’s
core business?
 yes Perfectly
Tender capture What is actually known about the client?  yes
Previous
interaction
How well is the company regarded and what
level is the rapport?
 yes  no
Clarity of
opportunity
How well understood are the client’s
requirements?
 yes  no
How clear are the client’s objectives?  yes  no
Market conditions How many competitors are likely to tender on
the opportunity?
Three
 yes
What is the company’s market status?
Good
 yes
Expertise/track
record
Can the company deliver? Does it have the
expertise to deliver?
 yes
Does the company have the right experience
for the project?
 yes

Contractual analysis of the tender documentation
Item Description Response
Selected building
contract
Is the selected building contract type known?  yes
Contract type:
Construction
building.
Is the introduction provided?  yes
Are the schedules completed?  yes
Special conditions Are there special conditions required for the
contract?
 yes
If yes, list:
Lump sum
payments in
parts of the
contract
Specifications Have the specifications been amended, if
necessary, to reflect addenda issued during
the tender period?
 yes
Drawings Have the drawings been amended, if
necessary, to reflect addenda issued during
the tender period?
 yes
Schedule 3 Have any other documents in Schedule 3
been amended, if necessary, to reflect
addenda issued during the tender period?
 yes
Order of
precedence
Does the contract clearly state the
recommended order of precedence?
 yes

Analysis of the potential contract for risk
Risk Likely consequence Action
Variations in price
and foreign
exchange
cost overruns Setting aside supplementary budget
Failure of either
party to fulfill the
conditions of the
contract
contract disputes
failure to satisfy needs
delays in delivery
downtime
legal action
Revise terms and conditions of the
contract
Inadequately
administrating the
contract
cost increases
failure of contract
full benefits not achieved
delivery of unsatisfactory
product
contract disputes
Employing sufficient number of the
administrators
Unauthorised
increase in scope
of works
unanticipated cost increases
contract disputes
Revision of the terms and conditions
of the contract
Loss or damage to
goods in transit
delays in delivery
downtime
liability disputes
Revision of the terms and conditions
of the contract
Fraud misuse of resources
legal action
Sue the responsible
individuals/Conviction in court of law
Key personal not
available
progress on project
disrupted
less expertise
Revise terms and conditions of the
contract

Submission of response to the invitation to tender
Date:31/05/2019
To: Architect: EFF OUMA
Company: White Tower
From: White Tower Box Number 534635 Sydney
Dear Sir,
Project: NILE BRIDGE CONSTRUCTION
Client: OWILI MIX
Re: Response to the invitation to tender
Upon receiving the invitation to tender and the tendering and pre-contract information,
Newton Baga Building Company has decided to ALLOW YOUR COMPANY
to carry out the prescribed works as detailed in the tendering and pre-contract
information and the provided specifications and drawings.
(Delete if not applicable)
The tender will be submitted on the Document Tender Form, in a sealed envelope
marked with the name of the project, to the architect’s office by the close of
tendering, being 6/6/2020 .
Any queries or additional tendering information are to be referred to:
Owili Mix
Yours faithfully,
Owili Mix , Managing Director

Alternative proposal as a tender
strategy
The principal may, at its sole discretion, consider and accept an alternative proposal
provided that the alternative tender accompanies:
• a conforming or complying tender
• a non-conforming or non-complying tender.
If a tenderer desires to make proposals which it considers would result in cost
reduction or other advantages to the principal but which would not constitute a
conforming or complying tender, it may submit one or more alternative tenders
embodying these proposals.
Any such tender must be marked alternative tender and
must be accompanied by:
• a statement of non-conformance
• a statement of conformance.
If a tenderer submits a tender which is classified by the principal as an alternative
tender, the principal may:
• decline to consider the tender any further
• accept the tender
• request that the tenderer provide further information in relation to the alternative
tender.
The further information which might be requested by the principal may without
limitation:
• include a certificate
• include a warranty.

This should be provided by a body or person nominated by the
Tendering committee to the effect that:
• technical aspects
• performance benefits
are –
{ which will be delivered to the principal.
• no less appropriate or beneficial
• less appropriate or beneficial { than those derived through a conforming tender.
If the principal requests further information and the tenderer does not provide it the
principal may;
• agree
• decline { to consider the tender any further.
Does the principal seek an alternative proposal for this project?:
 yes
 no
This is detailed under
Tendering requirement and procedure documents
Item no3 and states:
That whenever the principal seek any alternative proposal for the project, reference must be made
to the terms and conditions laid down previously.

Validate the tender estimate
The tender estimate is validated to ensure direct and indirect job costs are accounted
for.
Direct job costs (DJC)
To determine the direct cost of the activity, resources such as plant, labour and
materials are allocated for the scheduled quantity of work in accordance with their
capacity to meet project, availability, production rate and unit cost requirements. The
sum of activity direct costs gives the direct job costs (DJC) of the project.
Cost category Components Sub-components
Direct job costs Labour  gross wages and salaries
 award allowances (for example,
construction worker allowance,
construction camp allowance, overtime
loading, annual leave loading, site-specific
allowances and severance allowance)
 superannuation
 training
 workcover
 payroll tax
 personal protective equipment
 labour administration support costs
Plant  plant hire rate for contractor’s plant and
plant supplied externally on a ‘dry-hire’
basis (that is, exclusive of fuels, oils,
expendables, ground-engaging tools and
operator)
 fuels, oils, consumables and ground-
engaging tools of plant items
 transport of plant items
Materials  permanent material incorporated in the
final works
 temporary materials not incorporated in
the final works (for example, traffic
barriers, sheet piling, formwork, silt fences
and setting-out pegs)
Subcontract  components of the work (permanent or
temporary) subcontracted by the head
contractor and including subcontractors’
indirect job costs and off-site costs
 subcontract plant hired on a ‘wet-hire’
basis (for example, plant including fuels
and oils, expendables, ground-engaging
tools and operator)

Indirect job costs
Indirect job costs include the allowances that contractors require to manage a
project, and cover their risk, corporate overheads and margins.
Estimates prepared by this company must show specific line items for each of the
indirect cost categories. Options include:
• separate schedule item for indirect costs
• indirect costs distributed through the schedule activities, either as a uniform
percentage mark-up on direct job costs or allocated to specific activities.
Contractors preparing detailed estimates for tenders normally adopt the basic cost
method. It is the most accurate estimating method – but relies on a high level of
scope definition for best results.
Cost category Components Sub-components
On-site indirect
job cost
Overheads
(recurring)
Project management  project architect
 project manager
 project engineers
Works management  supervisors
 administration officer
 systems officer
 quality control officer
 quantity surveyor
 OHS representative
Site facilities  office rentals (for example,
accommodation, facsimile,
photocopier, computer hardware and
software)
 service utility charges (for example,
telephone, power, water and
sewerage)
 site facilities
 cleaning charges (for example, office
cleaning, septic pumping and refuse
disposal)
Plant & equipment  site staff vehicles
 job truck (general purpose)
 pumps and generators
 floating plant and loose tools
Consumables  stationery
 miscellaneous materials
Insurance & permits  state and local government permit
fees, insurances required by the
contractor, bank guarantees and
financial charges
Travel  travel costs not included in wages and
salaries

Cost category Components Sub-components
On-site site
establishment
Overheads
indirect job
costs ( fixed )
Site establishment 0 transport and erection of site facilities
Mobilisation 0 mobilisation, site offices and amenities
for contractor, client's team and, in
some cases, subcontractors