Category: detached house, duplex house,shophouse, townhouse under construction investment project “PSM HOME –OLYMPIA CITY”.Comparing the bid package price and the bid price to decide whe
The role and purpose of construction bidding
The role of construction bidding
Construction bidding brings great benefits in different aspects:
Improve the qualification of the officer from state to local authorities
Improve the management role of the authorities
Achieve high-quality in construction works
Choose the most suitable contractor compared to the Owner’s requirements Prevent the monopoly of some contractors, increase the competitiveness and the role of the owner to the contractor
The responsibility and obligations of the Owner which is authorized by the State for implementation of an investment project will be clarified.
Ensure the equality to all the contractors Due to competitiveness, each contractor needs to develop, research, apply technology advances, suitable business models to win the bids, as a contribution to the development of the construction industry in general.
Purposes of construction bidding
Construction bidding is to provide the owners with the optimum price for the project and provide multiple entities the opportunity to compete for work.
The role of bid prices in construction bid
According to Government’s regulations: “The bid price is the price in bid document after deducting the discount (if any), including all costs necessary to fulfill the requirements of the bid document on schedule.
The bid price is based on the production norm of the enterprises corresponding to the scientific – technological and the business strategy of contractor From there, each contractor has a different bid price Contractors with reasonable technological measures and low prices will be selected.
The bid price is the contractor's ability, which is the basis for investors to rank the contractors, thereby selecting the best contractor.
The bid price is an important indicator that plays a decisive role in the contractor’s ability to win the bidding, directly affecting the production and business results of construction enterprises.
Project’s tasks
Determining the bidding package price: “Construction the structural components, exterior finishes Category: detached house, duplex house, shophouse, townhouse under construction investment project “PSM HOME – OLYMPIA CITY”. Determining the bid price for the package: “Construction the structural components, exterior finishes Category: detached house, duplex house, shophouse, townhouse under construction investment project “PSM HOME – OLYMPIA CITY”.
Comparing the bid package price and the bid price to decide whether to participate in bidding or not.
Present the bidding price in full unit price.
THEORETICAL BASIS OF BID PRICES
Definition of construction bid price
The bid price means the price stated by a tenderer in application for bid participation, quotation, including all costs for implementation of bidding package as required by dossier of bid invitation, dossier of requirement.
The bid price is determined based on the selected technical-technological solutions,norms, unit price, bidding strategies and management of contractors In case the contractor has a discount letter, the bid price is the bid package price after the discount.
Contents and structure of construction bid price
For Lump sum contract: GDT = GXD + GK
For fixed unit price contract: GDT = GXD + GK + GDPKL
For adjusted unit price contract: GDT = GXD + GK + GDP
Direct cost: 𝐶𝑇𝑇= CVL + CNV + CM
Indirect cost includes: General expenses (general management costs of the enterprises, production management and administration costs at the construction site, insurance costs); Expenses for temporary houses for staying and construction management; The cost of some works which cannot be determined from the design (cost of labor safety and environmental protection, cost of testing materials of the contractor, cost of moving the workforce within construction site, irregular dredging pump costs).
Other costs related to the implementation of the bidding package includs: the cost of moving construction machines and equipment to and from the construction site; costs of ensuring the safety of the traffic in construction sites; costs of returning technical infrastructure impacted when implementing; material storing costs, the electric and water system, compressed air; cost of installation and dismantling of some categories of construction machines.
Contingency cost includes two kinds of cost: for arising volumes of works (GDP1) and for inflation (GDP2):
Methods of determining bid price
1.3.1 Cost estimation of input resources method
This method is used in this project
Step 1: Input resources demand analysis
In other cases, it can be calculated according to the construction plan or construction schedule.
In other cases, it can be calculated according to the construction plan or construction schedule.
Step 2: Determine prices of input resources
General cost shall be determined in percentage (%) estimated or detailed estimate of each item.
Cost for construction of makeshift houses for accommodation and administration on site.
Costs for works can not determine the volume from the design
One-time cost of equipment
Step 6: Determine the value-added-tax and construction cost summary
Step 7: Determine the contingency cost
Step 8: Compare and select the bid price.
Compare the bid price with the bid package price to determine the discount rate: f (G GT G DT )
If f < 0: the bid price is higher than the bid package price, it is neccessary to adjust the bid price reduction.
If f > 0 but it is not suitable with bidding stratergy, find a way to adjust the bid price accordingly.
Based on norms, unit prices announced and promulgated by authorities, the contractor shall prepare the unit price sheet for each work Then based on the possibility of the price reduction to fix a certain discount rate, it can be reduced for all works or for each work, and then calculated the bid price.
Contractor uses their available unit cost system, select suitable unit price with bidding package to calculate For the construction works which do not have unit cost yet,the contractor develops the unit cost by themselves based on construction method, norms for input resources, prices of input materials, labor cost and equipment cost that the contractor could pay After having a unit cost system, calculate the bid price.
Construction bid price process
According to the Law On Bidding No.43/2013/QH13, article 43 states that: “The supplier of non-advisory services, goods, construction and installation, mixture content shall be considered for recommendation as the winning tenderer upon the following conditions”: a) Having valid bid dossier and dossier of proposals; b) Having capability and experiences satisfying requirements; c) Having technical proposals satisfying requirements; d) Having deficient discrepancies not exceeding 10% of bidding price; đ) Having the bidding price after the errors have been rectified and discrepancies have been adjusted, minus value of discount (if any) being lowest price for method of lowest price; e) The tenderer has the proposed bid-winning price not exceedingthe approved bidding package price If the approved estimated budget of bidding package is lower or higher than the approved bidding package price, this estimate shall replace the bidding package price as basis for consideration for recommendation as the winning tenderer. Therefore, the construction bid price process for bidding packages using state capital should follow the following steps:
Step 1: Determine (or check) the bid package price
The bid package price is determined by procuring entity within 28 days before time of bid closure and can be considered as the upper limit (ceiling price) of the bid price.
Step 2: Determine the minimum price (CFmin)
CFmin are the costs that the contractor is expected to spend at least including taxes to implement the bid package according to the bids in case the winning bid meet the break -even revenue (profit = 0)
Based on technical – technological solutions, construction solution and organization management solutions by contractor.
Based on the internal construction norms of contractor.
Based on current state policies.
If FCmin > GDT, the bid will be rejected or reduce CFmin
Step 3: Determine the bid price
DETERMINING THE BID PRICE FOR THE PACKAGE: “CONSTRUCTION OF THE STRUCTURE, FINISHING THE EXTERIOR CATEGORIES: DETACHED HOUSE, DUPLEX HOUSE, SHOPHOUSE,
Introduction of bid package and requirements of bids
Project’s name: Investment in construction of PSM Home - Olympia City Owner: PSM Commercial and Investment JSC
Name of bid package: Construction the structural components, exterior finishes. Categories: detached house, duplex house, shophouse, townhouse under construction investment project of PSM Home - Olympia City
Characteristics of structural and architechtural solutions:
Exterior wall: solid brick, wall thickness 200mm
Wall divider: hollow brick 100mm
Wall around WC: wall base built by 12 rows of solid brick, others by hollow bricks Technical box: built by solid brick to ensure coverage the technical box All walls built to the floor
Interior plastering using mortar grade #50
Interior plastering using mortar grade #75
Mortar thickness : 15mm devided into 2 layers
The height of plastering layer: over the plaster ceiling 100mm, no plastering All lower edge of beams, lintels, next to exterior wall (without doors), it is required to add larmier size R20XC10V
Cover false ceiling with DURAFLEX sheet 8mm
Cement paste grade #75 thickness of 30mm
Sika BC bitume coating or equivalent waterproofing material
Plaster ceiling with mortar grade 75 thickness 15mm
Mortar grade 75 slope towards the rain water hopper
Sika BC bitume coating or equivalent waterproofing material
Moister – resistant plaster ceiling thickness 12mm
Contractor selection form: open bidding
Type of contract: Fixed unit price
2.1.2.Summary of the requirements of bids related to the determining bid price
NO NAME OF WORK UNIT
QUANTITY PER HOUSE QUANTITY OF THE PROJE Detached house
Soil excavation by excavator volume 1,25 m3, soil grade II (90% volume excavated by excavator) 100m3 1,022 1,123 0,962 0,548 5,11 5,62 6,73
Soil excavation for strip footing manually, width