--- title: "Contract, tendering process, agreement" subject: "Engineering Professional Practice" chapter: 4 key: "semester_8/engineering_professional_practice:contract-tendering-agreement-elements" source: https://www.bctengineer.com/q/semester_8/engineering_professional_practice/contract-tendering-agreement-elements site: BCT Engineering --- # Contract, tendering process, agreement Engineering Professional Practice · Chapter 4: Contract Management - Asked in: 2072 Asoj, 8 marks - Answer checked by Claude Opus 5.5 (high effort) on 2026-10-14 - Page: https://www.bctengineer.com/q/semester_8/engineering_professional_practice/contract-tendering-agreement-elements - Whole chapter: https://www.bctengineer.com/md/semester_8/engineering_professional_practice/chapter-4 ## Question What is contract? Explain tendering process and contract agreement. Describe essential elements of contract. ## Short answer A contract is a legally enforceable agreement; a tender is an offer; the contract agreement is the signed formal document. Tendering involves planning, bidding documents, notice, submission, opening, evaluation, award, performance security, and signing. Essential elements include offer, acceptance, consideration, competent parties, free consent, lawful object, intention, certainty, and formalities. ## Answer A **contract** is a legally enforceable agreement between parties creating rights and obligations. A **tender** is an offer to carry out work or supply goods at a price, made in response to an invitation. The **contract agreement** is the formal document signed after the tender is accepted. #### Tendering process (Public Procurement Act 2063) 1. **Need identification and planning:** budget approval, procurement plan, design and cost estimate. 2. **Preparation of bidding documents:** instructions, specifications, drawings, BOQ, conditions of contract. 3. **Bid notice:** published in newspapers and e-GP for the required period. 4. **Issue of documents and clarification:** pre-bid meeting, site visit, addenda. 5. **Submission of bids** with bid security before the deadline. 6. **Opening of bids** in the presence of the bidders. 7. **Evaluation:** preliminary examination, qualification, technical and financial evaluation; select the lowest substantially responsive bidder. 8. **Notice of intention to award**, a waiting period for complaints (7 days), then **letter of acceptance**. 9. **Performance security** and signing of the contract. 10. **Notice to proceed** and commencement. ```text Plan -> Bid Docs -> Notice -> Submit -> Open -> Evaluate -> Award -> Agreement -> Start ``` #### Contract agreement It is the formal written document signed by the employer and contractor after the award, containing: parties, contract price, time, scope, the list of contract documents and their priority, payment terms, securities, and signatures with date and witnesses. It makes the tender binding. #### Essential elements of a contract 1. Offer and acceptance 2. Lawful consideration 3. Competent parties (age 18, sound mind) 4. Free consent 5. Lawful object 6. Intention to create legal relations 7. Certainty and possibility of performance 8. Legal formalities (writing, stamp or registration where required) #### Notes on the tendering stage - **Bid security** (generally not more than 3% of the estimate) protects the employer if the winner withdraws; **performance security** (about 5% of contract price, higher for abnormally low bids) is taken before signing. - Bidders may complain to the procuring entity and then the Review Committee within the time fixed by the Act. - Bids are evaluated only on criteria stated in the bidding documents; negotiation on price is not allowed except as the Act permits. - Public works are mostly processed through the **e-GP system** (Bolpatra) for transparency. **Example:** For a Rs. 3 crore school building, the office prepares drawings and estimate, publishes the notice, receives sealed bids, opens them publicly, awards to the lowest evaluated responsive bidder, takes performance security and signs the agreement. ## Check yourself The answer's key points as multiple-choice questions, with the correct option and why. 1. Which is the correct order after bid submission? A. Evaluation, submission, opening B. Contract signing, then evaluation C. Acceptance, then opening D. Opening, evaluation, notice of intention to award, letter of acceptance Answer: D. Opening occurs in presence of bidders, then evaluation and award. (Key point: Tendering order) 2. What is the purpose of the waiting period after notice of intention to award? A. To let bidders complain (7 days) B. To negotiate price C. To sign contract D. To refund security Answer: A. Complaints are allowed before the letter of acceptance. (Key point: Waiting period) 3. Which statement on securities is correct? A. Both are paid after completion B. Bid security protects the employer if the winner withdraws; performance security is taken before signing C. Bid security is taken at signing D. Performance security is paid by employer Answer: B. Bid security up to 3%; performance security about 5%. (Key point: Securities) 4. The contract agreement is: A. Notice of bid B. Bid evaluation C. The formal document signed after award that makes the tender binding D. Cost estimate Answer: C. It contains parties, price, time, scope and priority of documents. (Key point: Contract agreement) ## Related in Engineering Professional Practice - [Contract and its essential elements](https://www.bctengineer.com/question.md?key=semester_8%2Fengineering_professional_practice%3Acontract-valid-essential-elements) — Engineering Professional Practice, chapter 4, asked 2× - [Void vs voidable contract; general conditions](https://www.bctengineer.com/question.md?key=semester_8%2Fengineering_professional_practice%3Avoid-voidable-general-conditions) — Engineering Professional Practice, chapter 4 ## Related in other subjects - [Contract, essential elements and importance](https://www.bctengineer.com/question.md?key=semester_8%2Fconstruction_management%3Acontract-elements-importance) — Construction Management, chapter 5 - [Short note: Tendering process](https://www.bctengineer.com/question.md?key=semester_8%2Fconstruction_management%3Atendering-process-note) — Construction Management, chapter 5 - [Contract administration process](https://www.bctengineer.com/question.md?key=semester_7%2Fict_project_management%3Acontract-administration) — ICT Project Management, chapter 13 - [Contract closure process](https://www.bctengineer.com/question.md?key=semester_7%2Fict_project_management%3Acontract-closure-process) — ICT Project Management, chapter 13