Group assignment international bidding topic theory question group 4 (t14 15)

Question 14: Presentation of steps in bidding procedure of bidding...2 Presentation of steps in bidding procedure of bidding...3 B.. Question 15: What does the bidding plan the plan on t

NATIONAL ECONOMICS UNIVERSITY NATIONAL ECONOMICS UNIVERSITY SCHOOL OF ADVANCED

EDUCATION PROGRAMS

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GROUP ASSIGNMENT INTERNATIONAL BIDDING

Topic: Theory Question Group 4 (T14-15)

Class: International Business Management 63D - AEP

Hanoi, 2023

Vũ Ánh Nhi - 11214598 Lê Quang Huy - 11212599 Phùng Quang Minh - 11213930 Vũ Thái Hưng - 11212485

Lê Anh – 11213087

Table of Contents

A Question 14: Presentation of steps in bidding (procedure of bidding) 2

Presentation of steps in bidding (procedure of bidding) 3

B Question 15: What does the bidding plan (the plan on tenderer selection) usually include? 7

Why do Investor (both public and private) need to develop a bidding plan? 7

I What does the bidding plan (the plan on tenderer selection) usually include? 7

II Why do Investor (both public and private) need to develop a bidding plan? 9

Reference 11

A Question 14: Presentation of steps in bidding (procedure of bidding)

Biddingistheprocessofparticipatinginthetenderprocessasabidder.Interested companiessubmittingatenderproposaltothetendereriscalledbidding.Biddingopenson thebidopeningdateandclosesonthebidclosingdate.Oncethebiddingisclosed,the tendererevaluateseachtenderproposalandselectsthebestoneforawardingthetender contract

Thereisdifferencebetweenatenderandbid.Tenderissimplytheinvitationtosupply goodsorparticipateinaprojectwhilebidisaresponsetotheinvitation.Publishinga tenderisthefirststepinthetenderingprocesswhilebiddingisasubsequentstep.Inthe worldoftenderingtherefore,atenderandbidquotationaredifferentandusedaccordingly Tobidthesellerneedstoreadbothtenderdocumentsandbiddocumentstounderstandthe

requirementofthetenderandparticipateinthetenderprocess

What is the difference between a bid and tender?

Inshort,theyarethesamething.Traditionallya‘Tender’isaformaloffer(bid)tosupply goods,works,orservices,butitisnowalsocommonlyusedtodescribethecontracts peoplearebiddingfor–whichcanbeconfusing

Morespecifically,let'suseagovernmentcontractasanexample.Whenagovernmenthas aprojecttheyneedcompleted,theyissuearequestforproposals.Thisrequestwilloutline alloftherequirementsneededtocompletetheproject,includingbudget.Companiesthen submitabidwhichcoverstheircostsandtimeneededtocompletetheproject.The governmentwillthenselectacompanybasedonthebestbid.Atenderissimplysending thenecessarydocumentstorespondtothisrequestforproposals

What Types of Bid Processes Exist?

Open Tendering

Inanopentenderingbidprocess,alsocalledcompetitivebidding,anorganizationopens upthefloorforbidsfromanyparty,whichcancomefromanotherorganization,business, orevenanindividualinsomecases.Thistypeofbiddingishighlycompetitiveandoften occurswhenanorganizationwantstoreviewawiderangeofcandidatesforaproject acrossadiversetalentpoolatvariouspricepoints.

Selective Tendering

Inaselectivetenderingbidprocess,theorganizationacceptingbidspreselectsonlyafew toporganizationsorapplicantstoapply.Thisprocessmakesthebiddingpoolsmallerand typicallyonlyinvolvesvendorsthathaveapreexistingrelationshipwiththeorganization (thoughthisisnotalwaysthecase)

Negotiated Tendering

Inanegotiatedtenderingbidprocess,asinglevendorispreselectedtocompletethe project.Theselectedvendoristypicallyabusinesswithanotabletrackrecordinthe industryorhasapreexistingrelationshipwiththeprojectowner.Inthisprocess,the vendorandtheorganizationacceptingbidsgobackandforthtonegotiatethetermsofthe projectandworkcontract

Presentation of steps in bidding (procedure of bidding)

The Bidding Process

Step 1: Request for Proposals

Afteranorganizationhasdecidedtoopenupthefloorforbidsonaparticularproject,it willissueaninvitationforbid(IFB),arequestforquote(RFQ),orarequestforproposal (RFP).Whilethesetermsareunique,theyallservethesamepurpose:toexpresspublic interestinreceivingbidsforaproject.Fromthere,atendermanagerpreparesamore

detailedpackagethatfillsinanyremaininginformationabouttheproject,issuing organization,andwhattypesofskillsandservicesthey’relookingfor.

Thepackagewillincludedetailsaboutdeadlines,expectations,specifications,supporting documents,anddetailsaboutwhatrequirementsandsupplementaryinformationpotential biddersshouldincludeintheirbids.Dependingonthetypeofbidprocesstheorganization prefersfortheproject,theinvitationtobidwillbeextendedopenlyortoalimitednumber ofpreferredapplicants

Step 2: Bid Preparation and Submission

Oncetherequestforproposalhasbeenissued,it’suptointerestedpartiestoassembletheir bidandsubmitittotheorganizationacceptingbids.Duringthistimeperiod,parties assembleasanorganizationtofullyreviewtherequesteddocumentandtheproject’s terms

Beforedraftingaproposalofanykindinresponse,theteammustfirstmakesurethatthey understandtheclient’sneedsandhavethebandwidthandcapabilitytodeliveronthose termssuccessfully.Iftheteamdeterminesthattheprojectisagoodfitforthedeliverables andservicestheycanprovide,thentheycanbeginassemblingaprojectproposal

Oncetheproposalhasbeendrafted,theteamshouldtakeonefinallookatthedocumentas acollectivebeforesendingitbacktotheclientfortheirofficialreview

Step 3: Bid Evaluation and Selection

Duringthebidevaluationandscreeningprocess,theorganizationacceptingbidsreviews thevariousbidsandprojectproposalsubmissionsfromoutsidecontractors.Whilethis processcantakeweeksorevenmonths,it’simportanttorevieweachproposalthoroughly andcarefully.Aftertheorganizationreviewseachproposal,theywillselectthevendoror vendorsthattheywanttogranttheprojectto.

Step 4: Contract Negotiation

Onceavendorhasbeenselected,theywillnegotiatebackandforthwiththehiring organizationtoestablishagreed-upontermsandconditionsforprojectsatisfaction.During thesenegotiations,bothpartiesmaydiscusstheprojecttimeline,compensation,accessto resources,andmore.

Step 5: Project Delivery

Thefinalstepofthebiddingandtenderingprocessisprojectdelivery.Thisphasemarks theofficialbeginningofprojectworkandencompassestheentiretyoftheprojectlifecycle Attheconclusionofthisphase,theclientreceivesallofthekeydeliverablesandproject outcomesthatwerediscussedintheinitialplanningphase

For example we have 5 steps in construction bidding

Theconstructionbiddingprocessisbrokendownintofivekeysteps:bidsolicitation,bid submission,bidselection,contractformation,andprojectdelivery.

1 Bid solicitation

Duringthebidsolicitationphase,thepropertyownerortheirrepresentativewilltypically issueanInvitation for Bid (IFB),aRequestforQuote(RFQ),oraRequestforProposal (RFP)

Forpublicprojectbids,agenciesaregenerallyrequiredtoissueanopeninvitationto qualifyingcontractorswhoareregisteredtoworkongovernmentconstructionjobs

Onprivateprojects,bidsmaybeopenorsenttoasmallergroupofcontractorsinanon-competitivebiddingprocess.Insomecases,bidsmaybesolicitedthroughabid

management platform.

ARequestforInformation–sometimescalledaRequestforClarification–canplayarolein thebiddingprocess.BiddingexpertJanineTrinidadexplainshowandwhy

Regardlessoftheprojecttype,thebidpackagecontainsprojectdetailstoenable

contractorstoproduceanaccuratebid,including:

 Constructionspecifications

 Projectrequirements

 Contracttype

 Projectdeliverymethod

 Bonding&insurancerequirements

Thesolicitationwilltypicallyalsoaskforadditionalinformationaboutthecontractorswho apply,includingprofessionalqualificationsandexamplesofsimilarpastprojects.Project ownersusethisinformationtoprequalifythecontractors,ensuringthattheywillbeableto completethejobaspromised

Contractorswhomeettherequirementsandareinterestedinthejobwillbeabletosubmit abid

2 Bid submission

Inthebidsubmissionphase,interestedcontractorssubmitdocumentationabouttheproject timelineandcosts,aswellasinformationabouttheirbusiness.Duringthisphase,general contractorswilloftensolicittheirownbids,proposals,orRFIsfromsubcontractorsthey needtohiretocompletespecializedaspectsofthejob.TheGCwillcombinethe

subcontractorproposalstopreparethebidtheysubmittothepropertyowner.

Inordertocreateanaccuratebid,contractorsmustcreate an accurate estimateofproject costs,including:

 Labor

 Materials

 Equipment

 Overhead

 Profitmargin

Byreviewingtheprojectspecificationsandbillofquantities,performingmaterialtakeoffs, andcalculatingoverheadandprofitmargin,contractorsshouldbeabletonaildowna competitivebid.Agoodbidrepresentsthebestqualityatthemostreasonableprice Ifrequired,thecontractorwillneedtosubmitabid bondalongwiththebidinordertobe consideredfortheproject.Thebidbondservesasaguaranteetotheownerthatthe contractorwillbeabletocompletetheprojectaccordingtotheirbid

3 Bid selection

Whenitcomestobidselection,propertyownerswilloftenpickthebidwiththelowestor mostcompetitiveprice.Onpublicprojects,governmentrulesoftenrequirethatthelowest bidwins

However,commercialprojectownersoftentakeintoaccountavarietyoffactorsbeyond price,including:

 Projectexperience

 Safetyrecord

 Schedulingphilosophy

Becausecontractorssubmitbidsinavarietyofdifferentformatsandwithawiderangeof prices,thebidsolicitorwilltypicallygothroughaprocesscalled bid leveling.Duringbid leveling,theownerwillattempttostandardizethebidformatsasmuchaspossible, enablingthemtocomparethesimilaritiesanddifferencesbetweenthem.Thisprocess enablestheownertocompare"applestoapples"tomakeamoreinformeddecisionabout therightcontractorforthejob

4 Contract formation

Aftertheownerselectsabid,theyworktogetherwiththecontractortoformaconstruction contractthatbothpartieswilleventuallysign.Whilethetype of contract(e.g.fixed-price, timeandmaterials,etc.)isgenerallypredeterminedbytheowner,contractorsstillhave leewayatthispointtonegotiatethetermsofthecontract,aswellasthefinalpricing structure.

Eveniftheprojectownerisusingastandardcontractform,likeAIAorConsensusDocs

contractdocuments,thecontractoralwayshasanopportunitytonegotiate the provisions.

5 Project delivery

Eventhoughit'snottechnicallypartofthebidprocess,projectdeliveryplaysavery importantroleinbidding.

Beforebiddingstarts,thepropertyownerwilldeterminetheproject delivery method

Commondeliverymethodsinconstructioninclude:

 Design-Bid-Build

 Design-Build

 ConstructionManageratRisk

 IntegratedProjectDelivery(IPD)

Duringbidding,theprojectdeliverymethoddetermineshowbidsaresolicitedand submitted.Forexample,Design-Bid-Buildsolicitsbidsfromgeneralcontractorsbasedon designsfromaseparatefirm,whereasDesign-Build employs a single firm for design 

and construction,sobidsareonlyreceivedfromsubcontractorssupportingthatfirm's

work

Afterbidding,theprojectdeliverymethodofteninfluencescontractnegotiations.For example,withtheconstruction-manager-at-risk (CMAR) method,thereislikelya guaranteedmaximumpriceinthecontract,whichtheconstructionmanagerwillwantto carefullynegotiatetoensureprojectprofitability

B Question 15: What does the bidding plan (the plan on tenderer selection) usually include?

Why do Investor (both public and private) need to develop a bidding plan?

I What does the bidding plan (the plan on tenderer selection) usually include? Types of Bid Processes

Open Tendering

-Inanopentenderingbidprocess,alsocalledcompetitivebidding,anorganizationopens upthefloorforbidsfromanyparty,whichcancomefromanotherorganization,business, orevenanindividualinsomecases.Thistypeofbiddingishighlycompetitiveandoften occurswhenanorganizationwantstoreviewawiderangeofcandidatesforaproject acrossadiversetalentpoolatvariouspricepoints.

Selective Tendering

-Inaselectivetenderingbidprocess,theorganizationacceptingbidspreselectsonlyafew toporganizationsorapplicantstoapply.Thisprocessmakesthebiddingpoolsmallerand typicallyonlyinvolvesvendorsthathaveapreexistingrelationshipwiththeorganization (thoughthisisnotalwaysthecase)

Negotiated Tendering

-Inanegotiatedtenderingbidprocess,asinglevendorispreselectedtocompletethe project.Theselectedvendoristypicallyabusinesswithanotabletrackrecordinthe industryorhasapreexistingrelationshipwiththeprojectowner.Inthisprocess,the

vendorandtheorganizationacceptingbidsgobackandforthtonegotiatethetermsofthe projectandworkcontract

The bidding plan (the plan on tenderer selection) usually include

-Nameofbiddingpackage:

Thenameofthebiddingpackagerepresentsthenature,contentandscopeofworkofthe biddingpackage,consistentwiththecontentstatedintheprojectandprocurement estimate.Incasethebiddingpackageconsistsofmanyseparateparts,thecontractor selectionplanmuststatethenametoshowthebasiccontentofeachpart

-Biddingpackageprice:

a)Biddingpackagepriceisdeterminedonthebasisoftotalinvestmentorestimate(ifany) fortheproject;Procurementestimatesforregularpurchases.Thebiddingpackagepriceis calculatedcorrectly,includingallcoststoimplementthebiddingpackage,including contingencycosts,fees,chargesandtaxes.Thebidpackagepriceisupdatedwithin28 daysbeforethebidopeningdateifnecessary;

b)Forbiddingpackagesprovidingconsultingservicesforpreparingpre-feasibilitystudy reportsandfeasibilitystudyreports,thebiddingpackagepriceisdeterminedonthebasis ofinformationontheaveragestatisticalpriceoftheprojects.Theprojecthasbeencarried outwithinaspecifiedperiodoftime;Estimatetotalinvestmentaccordingtoinvestment ratenorms;preliminarytotalinvestment;

c)Incasethebiddingpackageconsistsofmanyseparateparts,clearlystatetheestimated priceforeachpartinthebiddingpackageprice

-Capital:

Foreachbiddingpackage,thesourceofcapitalormethodofarrangingcapitalandtimeof fundingtopaythecontractormustbeclearlystated;Incaseofusingofficialdevelopment assistancecapitalorpreferentialloans,thesponsor'snameandcapitalstructuremustbe clearlystated,includingsponsorshipcapitalanddomesticcounterpartcapital

-Formandmethodofcontractorselection:

Foreachbiddingpackage,theformandmethodofcontractorselectionmustbeclearly stated;Choosedomesticorinternationalcontractors

-Timetostartcontractorselection:

Thetimetostartorganizingcontractorselectioniscalculatedfromtheissuanceofbidding documentsandrequestdocuments,clearlystatedbymonthorquarteroftheyear.Incase ofopenbiddingwithshortlistselectionproceduresapplied,thetimetostartorganizing contractorselectioniscalculatedfromtheissuanceoftheinvitationforexpressionof interestandprequalificationdocuments

-Contracttype:

prescribedinArticle62ofthisLawtoserveasabasisforpreparingtherequestfor expressiondocuments,prequalificationdocuments,biddingdocuments,andrequest documents;contracting

-Durationofcontract:

Contractperformancetimeisthenumberofdaysfromtheeffectivedateofthecontractto thedatethepartiescompletetheirobligationsasstipulatedinthecontract,excludingthe timeforperformingwarrantyobligations(ifany)

II Why do Investor (both public and private) need to develop a bidding plan?

 Khái  niệm:  The  bidding  strategy  is  viewed  as  an  obligatory  necessity  and  a fundamentalprerequisitefortheexecutionofbiddingendeavors.Additionally,the bidding  plan  is  interpreted  as  a  structured  document  delineating  responsibilities associatedwiththebiddingprocessforprojectsorprocurementprojections

 Thebiddingstrategyshouldguaranteecomprehensivecoverage.:

 numberofbiddingpackages

 contentofbiddingpackages

 sequenceofbiddingpackages

 sizeofbiddingpackages

 Investorsneedtodevelopabiddingplanbecause

 Openness,equity,andcompetitivenessintheprocessofselectingcontractors

 Investors  participating  in  the  bidding  process  must  be  legally independent andfinanciallyindependentfromthebiddingconsultant and  the  competent  state  agency,  the  inviting  party,  to  ensure competitioninthebiddingprocessfortheinvestmentproject

 Investorsbiddingforprojectsmayenjoyequalbenefits,suchas:

 Principleofvaluingefficiency

 Principleoffaircompetitionwithequalconditions

 Principleofcompleteandtransparentinformation

 Principleofprocurementinformationsecurity

 Principleofobjectiveandfairevaluation

 Principleofensuringbiddingsecurity

 Theemphasisoncompetitivenessisclearlymanifestedintherecent amendmentstotheprocurementlaw:Groupsofskilledworkerscan alsoparticipateinpackagesthatalignwiththeircapabilities.Thisaims toenhancecompetitiveness,transparency,andopenness,creatingan efficientbusinessenvironmentalongsidedeliveringbenefitsandcost savingsfortheinvitingparty

 Selectingajudiciousbiddingpackagewillenhancetheefficiencyofproject costs,quality,andprogress:Whenbiddingforaproject,developingawell-structuredbiddingplanwilltranslatetheinvestmentproject'srequirements intospecificbenchmarksorfigures,providingbiddingpartieswithabasisto formulatebiddingstrategies.Thisaimstoidentifytheoptimalapproachfor contractors.Withthesupportofabiddingplan,projectownerscaneffectively monitortheproject'sprogress,ensuringrobustqualityandstability

 Ensuringtheviabilityoftheprojectduringthebiddingprocessiscrucial, particularlywhenthebiddingmethodsarefrequentlyappliedtosignificant projectsofsubstantialvalue

 Clause1,Article64 stipulates,"The biddingpricemustinclude all costsfortheriskfactorsrelatedtothevolumeofworkandpotential price  fluctuations  that  may  arise  during  the  implementation  of  the contractcorrespondingtothecontractor'sresponsibilitiesincarrying outthebiddingpackage."Planningthebiddingprocesswillencompass thebiddingprice,andeffectivepricemanagementwillcontributetothe feasibilityoftheproject

 Establishing  an  unequal  guarantee  mechanism  among  contract participants.Thisproposalarisesfromthecurrentsituationoflingering debtsinconstruction,whichcontinuestoposechallengesandhardships forcontractors

Forexample:Inreality,thereisabacklogofnearly20%inthebidding package,andevenafter7yearsofputtingtheconstructionintooperation,it hasnotbeenpaid.However,accordingtotheBiddingLawandtheproposed amendments,  there  is  no  sanction  requiring  the  project  owner  to  ensure payment  to  the  contractor  Therefore,  the  Association  proposes:  "When completing60%-65%ofthevalueofthebiddingpackage,theprojectowner mustcommittoprovidingaguaranteetoensuresufficientcapitalforpayment ofthebiddingpackage."

Establishingconditionsforhighlyefficientinspectioneffortsandreducingrisksassociated withcontractorsisachievedthroughthebiddingplan,whichtranslatestherequirementsof theinvestmentprojectintospecificobjectivesorfigures.Thisprovidesthebidderwitha foundationfordevisingparticipationplans.Moreover,theinvestorcandependonitfor assessingandoverseeingtheprogressoftheprojectexecutedbythesuccessfulbidder

Reference

1 https://vienquanlyxaydung.edu.vn/ke-hoach-dau-thau-la-gi