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Bidding preparation, ambiguity, percentage contract

Short answer

Before the notice, approve budget, complete design and estimate, decide procurement method, prepare bidding documents and secure land and clearances. Ambiguity is resolved by document priority, specific over general terms, and interpretation against the drafter. A percentage contract pays a contractor a percentage above or below estimated cost and is used for construction works, repairs and consulting services.

What are the preparations to be made before inviting competitive bidding notice? How can the contract be interpreted in case of ambiguity? Define percentage contract and in which category of procurement, this form of contract is adopted?

Preparations before inviting competitive bid notice

  1. Approval of the programme and budget, and inclusion in the procurement plan.
  2. Completion of survey, design, drawings and specifications.
  3. Preparation and approval of the cost estimate (engineer's estimate).
  4. Decide the procurement method and bid type (national or international).
  5. Prepare bidding documents and approval from the competent authority.
  6. Make sure land, right of way, environmental/other clearances are ready.
  7. Decide qualification criteria, bid security and evaluation criteria.
  8. Form the bid evaluation committee.

Interpretation of the contract in case of ambiguity

  • Follow the order of priority of contract documents.
  • Specific provisions override general ones; written words override figures.
  • Read the contract as a whole, according to the intention of the parties.
  • Any unclear term is interpreted against the party who drafted it (usually the employer).
  • The engineer/employer gives clarification, and unresolved cases go to dispute resolution.

Percentage contract

A percentage contract is one in which the contractor quotes a percentage above or below the employer's estimated cost (or is paid a percentage of the actual cost), and the final payment is calculated on measured work. It is adopted in the procurement of construction works (mostly small works, repair and maintenance), and for consulting services where fees are fixed as a percentage of construction cost.

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