Conditions of Tendering

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Alternative names

1. Conditions of Tendering
2. Conditions of Tender
3. Instructions to Tenderers
4. Notes to Tenderers

Purpose

• To describe rules and procedures to be followed during tendering

Usual contents

1. Tender Documents issued
2. Obligations to check sufficiency of pages
3. Obligations to raise queries before tender return
4. Tender submissions required
5. Mode of submission of tenders, sealed envelope, labels, marked confidential
6. Return of Tender Drawings
7. Treatment of unauthorized alteration or erasure to the text of the Tender Documents
8. Treatment of qualifications
9. Treatment of alternative tenders
10. Unpriced items deemed included
11. Currency to be used
12. Statutory qualifications to contract
13. Treatment of errors
14. Not bound to accept the lowest or any tender

Special contents

Percentage adjustments

1. The calculation of any percentage adjustments to the rates and prices shall be based on the all-in rates without subtracting any prime cost rates which may be included therein. The prime cost rates included in the all-in rates subject to percentage adjustments shall remain unchanged.
2. All Prime Cost Sums and Provisional Sums shall be excluded from any corresponding percentage adjustment calculations as a result of any overall adjustment to the Tender Sum.
3. Reason: ​All prime cost rates, Prime Cost Sums and Provisional Sums shall not be adjusted for any percentage adjustments to the Tender Sums initiated by the Tenderers, e.g. when offering discounts.

​Rationalization of Unreasonable Rates and Prices

1. The Tenderer may be required to rationalize unreasonable rates and prices by replacing them with more reasonable rates and prices for all purposes of the Contract. The amounts of the affected items shall be re-calculated. The Tender Sum shall remain unchanged. The difference between the corrected total and the original Tender Sum shall be treated as an arithmetical error as Clause <> hereof, unless it is specifically agreed that this shall be treated as a lump sum adjustment without affecting the unit rates.
2. Reason:
   • In case of the presence of unreasonably high or low rates in a contract, the following will happen:

	Employer	Contractor
Unreasonably high rates
Variation addition	Unreasonable cost increase	Very good profit (favourable)
Variation omission	Higher cost reduction (favourable)	Unreasonable income reduction
Unreasonably low rates
Variation addition	Lower cost increase (favourable)	Unreasonable loss
Variation omission	Unreasonable cost reduction	Lower cost reduction (favourable)

• The usual practice is to identify unreasonable rates and prices and agree more reasonable rates and prices to be used for pricing variation additions and omissions, and the Tender Sum should remain unchanged. 
• The rationale is that, in spite of any over or under pricing in the Tender Sum, when more reasonable rates are used for valuing changes whether it be an addition or an omission, the above unreasonable situations would not arise.
• However, this practice has the following issues:
  • Some people may argue that the original rates and prices should be used for omissions, while the more reasonable rates and prices should be used for the additions only. Tenderers would argue for this when the original rates and prices were unreasonably low. Employers would argue for this when the original rates and prices were unreasonably high.
  • When the unreasonably priced item is a provisional quantity item, care should be exercised to describe whether the more reasonable rate is to be used for the increase to or decrease from the provisional quantities (i.e. price the original provisional quantity at the original rate first) or is to be used for the complete remeasurement.
  • For interim payment valuation, the original rates and amounts are still used, giving an impression of either over or under payment.
• By replacing the unreasonable rates and prices with more reasonable rates and prices for all purposes of the Contract, the rationale of the usual practice is maintained, but people no longer need to refer to the unreasonable rates and prices any more, and the issues mentioned above would not persist.

​​​​Short-listing

1. The Employer reserves the right to short-list tenders for further tender clarifications, interviews and negotiation without the obligation to invite all tenderers to do so.
2. Reason: This avoid the challenge by tenderers not on the short-list as to why they are not similarly invited.

Clause headings of Housing Authority's Notes to Tenderers, February 2013 Edition

1. Opening of Tenders
2. Tender Evaluation Criteria
3. Acceptance of Tender
4. Sureties or Security
5. Review Body on Bid Challenges
6. Other Matters

Clause headings of Housing Authority's Special Conditions of Tender, February 2013 Edition

1. Type of Tender
2. Tender documents issued
3. Documents available to tenderers
4. Tenderers alterations, qualifications and modifications
5. Schedules to the Form of Tender
6. Submissions required with tender
7. Other submissions required with tender
8. Inspection of documents etc.
9. Inspection of Site
10. Joint Venture Guarantees
11. Special terms of payments for precast concrete façade construction
12. Unreasonable low bids
13. Erratic Pricing
14. Sub-contractor Registration Scheme
15. Dispute Resolution Advisor (DRAd) System
16. Housing Construction Management Enterprise System (HOMES)
17. Wall Tiling Works
18. Trip Ticket System
19. Construction Waste Disposal Charging Scheme
20. Statutory Minimum Wage
21. Disclosure of Information (Bid Challenges)
22. Conflict of Interest (Housing Authority member)
23. Warranty Against Collusion
24. Evaluation of Tender
25. Incorporation of Technical Proposals into the Contract
26. Other matters

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