Selected Procurement Strategy and Tendering Approach

A tender bid report is a detailed history of a tendering process involving analysis of each tender submitted and any succeeding negotiation. The report is usually prepared by a cost consultant or a planning engineer and is to be submitted to the client. A tender basically refers to the process whereby financial institutions or the government invite bids from different groups for a given project that is meant to be completed within a stipulated period of time. Making a bid, therefore, shows the willingness to buy or carry out the project having satisfactorily met the required conditions set by the financial institution or government. This report mainly tends to discuss and outline the following objectives -;

• Critically evaluating and appraising a procurement strategy that is selected by the bidder and which is applicable to a construction project.
• Evaluating precautions related to health and general safety and show the implications of their costs on the project selected (Asquith & Kieschnick, 2011).
• Preparing the price of the tender and also the tender plan
• Conversing the bidding strategy and the approach of tendering that is selected

The report will therefore enable us to assess the various methods of tendering that are currently used in the construction industry and how they are applied during the procurement process. Careful considerations on costs and prices will equally be analysed and their impacts on health and safety discussed (Baron, 2010).

The two participants that this report mainly talks about are a construction company named AAA and the government who in this case is the one who owns and finances the project and thus also outlines the terms for the tender. AAA Construction Company will be participating in a tender bid for a construction project being offered by the government. The stipulated completion time for the project is within two years (Bebchuk, 2012).

AAA Construction Company is a USD 20 billion technology, construction, engineering, manufacturing and financial services corporation, all on worldwide operations. This is a company that is ranked fourth in the international of Green companies in the industrial sector. It is ranked 9^th among the most innovative companies. AAA Construction Company is among the most respected companies in Oman’s private sector and also one of the largest. It is built on a belief for a robust and customer-focused approach and the constant pursuit of top-class quality. This has aided AAA Construction Company to achieve and maintain leadership in its foremost lines all over the decades of its existence (Berkovitch et al, 2010).

AAA Construction Company launched an extensive design to construct Al Batinah Expressway in Oman.  An Expressway is generally the uppermost grade category of highway with a controlled access highway which has access to ramps, lane dividers, overpass, bridges, etc. it is designed specifically for easy flow for a lot of traffic. Traffic from both directions flows steadily since they are separated by a divider between lanes. An Expressway is purposefully built for high-speed traffic. It has reduced access points and exits with very rare intersections or none at all (Betts & Brown, 2012).

Tender Plan and Tender Price

Figure 1 artistic impressions of the Al Batinah Expressway Project

Figure 2 parts of the Al Batinah Expressway under construction

Al Batinah Expressway is considered as one of the most vital routes in the Sultanate of Oman with the project destined to start from Barka to Shinas. The initial project is separated into six packages. Al Batinah Expressway is a 265 km 8-lane highway project in Oman connecting the Muscat Expressway located at Halban with the United Arab Emirates border located at Khatmat Milahah (Bradley, 2012). It will comprise eight lanes, four in each direction, twenty-two multi-level flyovers, secondary flyovers at its main points twenty-two in number as well as twenty-eight Wadi bridges. The six packages of the project are detailed as shown below

• Package 1 – is a 45-kilometre stretch that starts from the roundabout at Al Filaij in Wilayat of Suwaiq to Wilayat of Saham.
• Package 2 – covers a 42-kilometre distance from Wilayat of Rustaq and to Wilayat of Suwaiq.
• Package 3 – covers a 46-kilometre distance from Wilayat of Suwaiq to Wilayat of Saham.
• Package 4 – is a 50-kilometre stretch starting from Wilayat of Saham to Wilayat of Sohar and it carries on to package 5
• Package 5 – covers a 41 kilometre stretch from Wilayat of Sohar to Wilayat of Liwa.
• Package 6 – a 45 kilometre stretch from Wilayat of Liwa to Khatma Milahah. It will involve constructing 136 via ducts 4 Wadi bridges for crossing, 4 intersections and 2 overpasses (Bradley et al, 2013).

Al Batinah Expressway is a project initiated by the Ministry of Transport and Communication (MOTC) with the following set of objectives-;

• Mainly to ease traffic flow – the project is mainly designed to ease the massive traffic congestion experienced on the current Sultan Qaboos Highway. This is meant to make commuting much easier (Burkart & Panunzi, 2014)
• To increase the level of service provision in the targeted areas. Example. By reducing the congestion witnessed on the existing Batinah Highway will ease faster movement of the required traffic.

The construction of this Expressway is purposefully meant to meet the traffic demand within the target areas. Since the Expressway is built for both vehicle and pedestrian use, it, therefore, serves its intended drive by moving people and goods from where to where they intend to be by offering the best reasonable route through (Byrd & Hickman, 2011).

Figure 3: The al Batinah Expressway map

The project will focus on package 4. Al Batinah Expressway package 4 is a 50 km stretch, four-lane dual carriage expressway. It involves constructing two grade-separated interchanges, five Wadi bridges, seven overpass and cross drainage works, as per International standards. The construction project should also meet the Oman set standards.

The goal of AAA Construction Company is to carry out a cost analysis for the life cycle and the initial construction phase of the project.  The economic impact of this crossway is shown by the cost analysis, therefore we were able to understand how constructing a large project is able to affect a large project cost (Chowdhry & Jegadeesh, 2010)

Factors that AAA Construction Company put into consideration while designing Al Batinah Expressway  project are as follows-;

• Sustainability – this implies the capability to meet the wants of the present without influencing the ability of future generations to achieve their own wants. This was achieved by selecting a proper site design, using indigenous plants when landscaping the area after completing the crossway and also the management of stormwater.
• Safety and public health – the design of this bridge and its intended construction follows one of the latest and most common designs in the construction industry. The design is aimed at ensuring a bridge that is stable and has satisfactory strength. During the construction, activities such as traffic control that aims at protecting road users such as pedestrians, motorists and even the site construction workers were established.
• The environmental influence of this project was also put into consideration. Achieving this was done by reducing the initial influence that the project has on resources. Another consideration was using recycled building materials and reusing other construction debris.

The expressway discussed in this report is a 44 km stretch which includes flyovers crossing bridges, intersections and rest areas. Different designs were evaluated based on cost, lifespan and constructability factors and a final complete design agreed upon. An estimate of the cost of materials was also arrived at using the relevant unit prices (Cotter & Zenner, 2013).

Background of the tendering

Health and Safety Precautions and Cost Implications

For the preparation of the tender bid report, our discussions were based on the review of several pieces of literature as well as collected data. This aided the analysis of various procurement and tendering methods that are able to be applied and also implemented on the project that has been stated above (Al Batinah Expressway). Several recent primary international journals were critically discussed and covered the following topics of discussions for this report.

These are the long-term plans that are meant to ensure there is a constant and timely supply of goods and services that are critical to the ability of the firm to meet its core objectives. This process can be described by a series of rational decisions and not just the chronological stages that should be followed in order strictly. The stages involved in selecting a procurement strategy can be summarized in the table below -;

Procurement strategy involves reducing the gap between the executive level plans and the directive policies and actions of every day. This enables the procurement to not only meet the expectations but also exceed them (D’Aveni & Kesner, 2012).

The following are some of the major strategies that can be applied by institutions at any stage of the procurement -;

• Technology influence – improvements in technology gave the company adequate time and information and also allowed for easier integrations. Working on improved connections will allow the tasks of the company to move faster than ever. Choosing and putting into practice the right level of technology will greatly improve the strategic purchasing and procurement of the company
• Building and maintaining strategic partnerships – creating strong relationships with the supplier for both the direct and indirect spend categories proved to be beneficial to the company during its procurement. Seeking planned partnerships with vital suppliers is thus important. Having an open talk with the strategic partner ensured the company does not spend due to not so necessary costs.
• Improving the company’s internal procurement process- besides improving and adopting a better technology, the company sought structural internal changes in the existing process of procurement. We ensured our internal procurement procedures always resembled that of bigger and more successful companies with well-laid rules in buying and structured training of employees. This helped in saving on costs, improving accountability, allowing easier tracking and checking of spend, making easier reporting and thus setting the stage for the company’s growth (DeMott, 2014).
• Outsourcing the procurement needs – since a procurement initiative is always hectic and involving, it is necessary for the company outsourcing this duty to experts since this will save the company some money and thus produce increased savings. The nature of roles involved in the procurement process and also the time and know-how that is required to successfully complete the initiative makes it important to involve only specialists to carry out the exercise.

A bidding strategy is an extensive range of techniques applied and timing for the purpose of achieving a set of predetermined objectives. The project is mainly a construction bid and in the construction industry, several clearly analysed and chosen bidding strategies applied will influence the chances of any prospective bidder winning the bid.  A bidding strategy is developed precisely to give the project engineers a proper guide in determining the type of jobs to bid and how best to perform those bids (Easterbrook & Fischel, 2010).

• Selective bidding – this is usually one of the main bidding strategies and also among the most effective. It involves evaluating bid prospects based on quality and leaving out those that are not a good fit for the company. The estimators were able to have good quality time on each bid and thus refine their correct prices. This will, in turn, lead to a successful bid. Being a successful company, AAA Construction Company considered the type of work that we are best at having been in the business for periods long enough. We then took time to yield accurate and detailed estimate and also the prices of materials to be used from the suppliers. Once that was done we then evaluated proper schedules and plans for performing and carrying the project very efficiently. This strategy is very vital in ensuring we keep our bi understandably low hence improving the chances of winning the bid (Easterbrook & Fischel, 2011).
• Number of bidders – this being a government-owned project, the bid was closed meaning there were no negotiations allowed or any form of modification and the bids are usually offered to the lowest priced bidder wins the price, it was very important to consider the number of bidders and analyse the chances of winning the bid in comparison to the other bidders. This strategy will ensure we get everything right to increase our chances of coming on top.
• Clean bids – making sure our bids are clean will increase the chances of winning the bids. Making sure every bid presentation neat and clean and well laid out. Always note that each and every piece of paper is justified and always has a specific purpose.
• Making sure and convincing the readers of the bid giving past projects and experiences that our company has the required skills to perform the required project. After this, we then re-focus on gathering resources for the intended project.
• Better bid language tips – being simple and avoiding using confusing languages will always get the bidder the benefits. Also, remember to be straight and direct to the point. Do not present just ideas, major in facts. The types of wordings used will play a major role in determining whether your bid will be read or if it will be put aside.
• Show the skills – should focus on presenting the specific ideas on how to solve the problem presented, the activities the bidder will carry out and how they will be carried out. This will greatly determine their performance against those of the other competitors. What is done different will also bring the difference amongst other prospective bidders and thus the results (Flanagan & O’Shaughnessy, 2013)
• Review contract documents – the necessary documents required for the biddings should ensure they meet the industry standards for construction. Clarifications can be made to determine that whatever is required match with the company capabilities.

A tender plan is a process of making a decision on what item or project to purchase or carry out, when to perform it and the source from which source the item or project will come from. Once the tendering plan is assigned, the expectations for the fulfilment of the tendering requirements are determined. The planning is vital because of the following reasons -;

• Enables planners to decide if their expectations are realistic
• It is important in determining what projects to carry out, when and from whichever sources.
• It gives an opportunity to the involved stakeholders to discuss specific requirements for procurement
• Estimating the time that is required to complete the time that is required for the completion of the procurement process and the award of the contract

Having a well-organized tender plan will facilitate the procurement phases of the tender bid and can be established for a particular requirement or a specific project (Fowler & Schmidt, 2010).

The tender price for this project involved the total charges that are associated with the physical delivery of the required product, in this case, the construction of Al Batinah Expressway package 4. In the determination of a tender plan, a tender pricing document is prepared. The document articulates the methods in which both the client and the owner wish to assess the breakdown of the general price of the tender (Gilson, 2010)

Bidding Strategy and Selected Tendering Approach for a Construction Project

 AAA Construction Company placed a tender bid price of OMR 135.6m ($ 352.1m) to the ministry of transport and communication of Oman. This was arrived at after carefully putting considerations all the factors that will influence the project some as discussed in this report.

During the construction phase of the project, accidents always become a great concern to both the worker and project managers. To some extents, the accidents can become life-threatening. Besides accidents, there are also possibilities of dangerous health complications to the all the individuals who perform daily activities on the construction sites and also to the environment as a whole. The health concerns can be very life threatening to a large population that may also affect the natural resource including wildlife. Due to this, the leaders of the construction industry have the duty to ensure they safeguard all these individuals at risk for ethical and economic reasons (Jarrell & Poulsen, 2014).

It is worth noting that any occurrence of accidents or unhealthy environment resulting from these construction practices may subsequently result in unnecessary and unplanned expenditures that any project manager must always be willing to reduce or stop. This can be achieved through the following means -;

• Training – safety is always a skill that is best learnt before carrying out the planned activity. Several organizations play a huge role to ensure all participants within construction sites well trained on the safety (Kummer & Hoffmeister, 2011)
• Creating awareness – making sure that anybody that visits any construction site is fully aware of the possible dangers. Understanding the perils and maintaining an uninterrupted state of alertness will help reduce accidents occurrences.
• Providing proper equipment – project managers should ensure that all workers within a construction site are well equipped with the best gear that are ideally suited for the tasks assigned. They should also ensure that the equipment are properly maintained.
• Keen supervision – in order to ensure ideal safety conditions within a site, a strong supervisor who is capable of implementing the safety standards without any exceptions is assigned to the site. The supervisor has the duty of keeping tabs on all individuals within the site and rectifying those who commit safety mistakes (Langevoort, 2013).

Once all these are properly adhered to, proper health and safety will be guaranteed and hence the project managers are able to cut on the extra costs that would have arisen from such neglections (Paul, 2013)

Conclusion

The report mainly was about writing a tender bid for a government that is scheduled for completion in a period of two years. Several procurement strategies are clearly analysed before settling on which strategies to apply in order to make the bid successive. Once these procurement strategies are settled on and properly implemented the bidding process goes another step further. Proper bidding strategies are also selected as it gives the project managers a proper guide in determining the type of jobs to bid and how best to perform those bids. The tender approach should also be well laid out. Once all those are achieved, a tender plan is formatted. The plan will give more directions in moving the bid further. All details about the planned project and how you plan to carry it out must be well stated. This should also include the project tender price (Travlos, 2014). During the construction phases of the project, emerging issues such as health and safety conditions are considered with an aim of reducing extra costs that may result from such concerns.

Conclusion

The sole aim of making a bid is to finally win the bid. Therefore it is important to critically analyse all the required issues and concerns that may affect your bid. Presenting an all-round bid that fully meets the factors will always make you come out on top (Walkling, 2012).

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