Contract Management

A contract is a legally enforceable agreement between the client and the contractor to carry out work for a price. Contracts are classified by the method of payment:

Reimbursable (cost-plus) contracts

The client pays the actual cost of labour, materials and equipment plus a fee. Variants:

1. Cost plus percentage fee: fee = a percentage of cost (the contractor has little incentive to save).
2. Cost plus fixed fee: the fee is fixed regardless of cost.
3. Cost plus incentive fee: the saving or overrun is shared.
4. Cost plus guaranteed maximum price (GMP). Used where the scope is uncertain, urgent, or complex (emergency repair, research facilities). Needs strong audit.

Practicable in Nepal

The item-rate (unit price) contract is the commonest for building, road and irrigation works under the Public Procurement Act and Regulation. Lump sum is used for small and clearly defined works; design-and-build and EPC are used in hydropower; BOOT/BOT for large hydropower under independent power producer (IPP) arrangements; and percentage-rate contracts are used by local bodies for small works.

Pre-qualification is a screening process in which interested contractors or consultants are assessed before the tender for their experience, finance, equipment and personnel. Only those who qualify are invited to submit tenders.

Process

1. The client invites applications for pre-qualification (PQ) by public notice.
2. Contractors submit PQ documents: company profile, past similar works, financial statements, plant and equipment, key staff, litigation record.
3. The PQ committee evaluates against the criteria set in advance.
4. A list of qualified applicants is published; they alone receive and submit the bid.

Why it is necessary

• Ensures capability: only contractors with the needed experience, equipment and finance are allowed, so the project is completed on time with quality.
• Reduces the risk of failure, abandonment, delay and cost overrun.
• Saves time and cost of evaluation: fewer bids for the client to evaluate, and the unqualified firms do not waste the cost of bid preparation.
• Better competition among genuine bidders; avoids unrealistically low prices from weak firms.
• Transparency and fairness as the criteria are known and equal for all.
• Useful for large, complex and specialised projects (dams, bridges, tunnels, large buildings), and in Nepal it is allowed under the Public Procurement Act (for contracts above a set size).

(Post-qualification, where the lowest bidder is checked afterward, is an alternative used for simple works.)

BOOT contract

BOOT means Build - Own - Operate - Transfer. A private company (concessionaire) finances, designs and builds a public infrastructure facility, owns and operates it for a fixed concession period (for example, 25-30 years) to recover its investment and make a profit from the users' charges or by selling the output, and then transfers it to the government free of cost (or for a nominal price) at the end.

  Govt grants concession
       |
  Private firm: Build -> Own -> Operate (earns revenue)
       |
  Transfer to Govt at end of period

Use and importance in Nepal and developing countries

1. Finance: the government has limited funds, and BOOT brings private and foreign capital for hydropower, roads, bridges, airports and water supply.
2. Transfer of risk: construction, financial, and operating risks are carried by the private party.
3. Technology and management skills are brought in.
4. Faster completion because of private-sector efficiency and discipline.
5. No burden on the national budget or external loans at the start.
6. Asset at no cost after the transfer: the nation gets the facility with a useful remaining life.
7. Employment and development of local industry.

Nepal

Hydropower projects such as Bhotekoshi and Khimti were developed on a BOOT basis by foreign investors under the Electricity Act, 2049, with power purchase agreements with the Nepal Electricity Authority (NEA). For other sectors, the Public Private Partnership and Investment Act, 2075 provides the legal framework.

Limitations: higher cost of private finance, tariff and political risk, and long, complex negotiations, so a clear legal framework and a strong agreement are required.

Tender evaluation follows the Public Procurement Act, 2063 and Public Procurement Rules, 2064 (Nepal) and the bid documents. The process is open, fair and based only on the criteria stated in the bid document.

 Receipt -> Opening -> Preliminary exam -> Technical eval
   -> Financial eval -> Ranking -> Post-qual -> Award

1. Receiving and opening

• Bids are received in sealed envelopes up to the deadline; late bids are returned unopened.
• Bids are opened publicly, at the time and place stated, before the bidders' representatives. The name of the bidder, bid price, discounts, bid security and alternatives are read out and recorded in the minutes, which all present sign.

2. Preliminary examination (responsiveness)

The evaluation committee checks: bid security (amount, validity), signed forms, completeness of documents, validity period, power of attorney, registration, tax clearance, and a bid in the required currency. Bids not substantially responsive are rejected.

3. Technical and qualification evaluation

Experience in similar works, financial capacity (turnover, bank guarantee), key personnel, equipment, work programme and method statement, and capacity are evaluated on a pass/fail basis (or with a score in QCBS).

4. Financial evaluation

• Arithmetic errors are corrected (unit rate prevails over the total; words prevail over figures).
• Omissions, discounts and conditions are adjusted to give the evaluated bid price.
• Unusually low bids (below about 85% of the estimate) are checked for realistic rates, and an additional performance security may be asked.
• Bids are compared on the evaluated price, and ranked.

5. Selection and award

• The lowest evaluated responsive bidder is ranked first and is post-qualified.
• A report of the committee is approved by the approving authority.
• A notice of the intention to award is given to all bidders, who have a period (7 days) to complain.
• The Letter of Acceptance is issued, performance security is submitted (5% of the contract price) and the contract is signed.

A tender notice (invitation for bids) is a public announcement, published in newspapers and on the procurement portal (bolpatra.gov.np / PPMO), by which the client invites eligible contractors or suppliers to submit sealed bids for a work. It informs interested bidders about the work and the conditions to participate.

Essential information to include

1. Name and address of the procuring entity (client), and the contract identification number.
2. Name, location and brief scope of work; the estimated cost (may or may not be shown).
3. Method of procurement: national or international competitive bidding, pre-qualification, etc.
4. Eligibility and qualification requirements: contractor's class and registration, PAN/VAT, tax clearance, experience in similar work, annual turnover, equipment and personnel.
5. Where and when the bid documents may be obtained or inspected, and the fee (non-refundable).
6. Bid security amount (usually 2-3% of the estimate), its form and validity.
7. Completion period.
8. Date, time and place for the site visit and the pre-bid meeting.
9. Deadline and place for the submission of bids.
10. Date, time and place of bid opening.
11. Bid validity period, language, and the currency.
12. The right of the employer to accept or reject any or all bids; the contact person, phone and e-mail.
13. Date of publication of the notice.

Bid bond (bid security)

A bid bond is a guarantee, usually from a bank or an insurance company (or sometimes a cash deposit), submitted with the tender, to show the bidder's seriousness. In Nepal it is generally 2-3% of the estimated cost, valid for the bid validity period plus 30 days. The employer can forfeit it if the bidder withdraws the bid within the validity period, or refuses to sign the contract or to submit the performance security after award. It is returned to the unsuccessful bidders after the contract is awarded.

Performance bond (performance security)

A performance bond is a guarantee from a bank or insurance company, given by the successful bidder before signing the contract, to ensure that the work will be completed according to the contract. It is generally 5% of the contract price in Nepal (with an additional amount if the bid is abnormally low), and valid until the end of the defects liability period (or as per contract). If the contractor defaults, the client may claim the amount to cover losses and for completion of the work by another contractor. It is released after the work is completed and the defects liability obligations are met.

Before inviting tenders, the client prepares carefully:

1. Need and feasibility study: define the project objectives, technical, economic, environmental and financial feasibility.
2. Approval and budget: obtain the administrative and financial approval and the budget allocation.
3. Land and clearance: land acquisition, right of way, and permits (EIA/IEE, building permit, utility shifting).
4. Survey and investigation: topographic survey, soil investigation, hydrology.
5. Design and drawings: preliminary and detailed design, with drawings and specifications.
6. Cost estimate and BOQ: quantities, rate analysis, engineer's estimate.
7. Work programme: schedule of the project and the contract period.
8. Select the procurement method and the type of contract; packaging of the works.
9. Prepare tender documents: invitation, instruction to bidders, conditions of contract, specifications, drawings, BOQ, forms, and the amount of the bid security.
10. Pre-qualification (where needed); set the qualification criteria and the evaluation method.
11. Form the committees (bid evaluation committee) and get approval of the documents.
12. Prepare and publish the tender notice; arrange the site visit and the pre-bid meeting.

Types of contract in civil engineering

1. Lump sum (fixed price) contract
2. Item rate (unit price, BOQ) contract
3. Percentage rate contract
4. Cost plus (reimbursable) contract: with percentage fee, fixed fee, or incentive fee
5. Labour contract
6. Turnkey / EPC / design-build contract
7. BOT / BOOT / BOO / BTO contracts
8. Construction management / management contract
9. Joint venture and sub-contract
10. Package, time-and-material, and force account (departmental) works

Type used for government works

The item rate (unit price) contract is the commonly used type for government works in Nepal, and the lump sum contract is used for small, well-defined works. Larger and special works use EPC or design-build contracts.

Why

• The contractors quote rates for each item in the BOQ and payment is made for the measured quantity actually done; so the client pays only for what is built, and the final cost follows the real quantity.
• The design is completed before tender, and the quantities are estimated by the client's engineers, so the bids are comparable.
• It is transparent for public audit and gives fair competition under the Public Procurement Act, 2063.
• Variations are easily valued at the BOQ rates.
• Risk of quantity error remains with the client, but the price risk is on the contractor.

Classification of contracts based on payment

1. Lump sum (fixed price): a fixed total price.
2. Item rate / unit price: payment on measured quantities at unit rates.
3. Percentage rate: a percentage above or below the estimated rates.
4. Cost plus (reimbursable): actual cost plus a fee.
5. Labour (or labour-and-materials) contract.

Lump sum contract

The contractor agrees to complete the defined work, as shown in complete drawings and specifications, for one fixed price. The payment is by stages (milestones) or percentage completion.

• Merits: the client knows the cost at the start; less work in measurement and accounting; the contractor has an incentive to be efficient; the risk of cost overrun is on the contractor.
• Demerits: needs complete design before tender; variations are difficult and costly; the contractor may reduce quality to save cost; the price includes a high risk allowance; not suited to uncertain scope.

Cost plus contract

The client pays the contractor's actual cost of labour, materials, plant and subcontracts, plus an agreed fee (percentage, fixed or with incentive).

• Merits: work can begin early without full design; flexible for changes; suitable for urgent, uncertain and complex works; little risk for the contractor.
• Demerits: the final cost is uncertain; there is no incentive to save, particularly with a percentage fee; needs a strong accounting audit and supervision; the client takes the cost risk.

An item rate contract (unit price contract) is one in which the contractor quotes a rate for each item of work listed in the Bill of Quantities (BOQ), and payment is made on the actual measured quantity of each item multiplied by its rate. The BOQ quantity is an estimate; the total contract price is the sum of (estimated quantity x rate) and may change after the final measurement.

Features

• A detailed BOQ with the items, units and estimated quantities is given by the client; the bidder fills in the rates and amounts.
• Payment: running bills by measured work; the final bill by the final measurement.
• Variations in quantity are paid at the same rates (with limits, often +/- 15-25%, beyond which rates are adjusted).
• Bids are compared on the total of the quoted amounts.

Merits

Fair payment for the real quantity; suits works where quantities are uncertain (earthwork, roads, foundations); variations are easy; bids are easily compared; wide use in public works in Nepal.

Demerits

Final cost is not known at the start; it needs a lot of measurement and checking; risk of unbalanced bidding (very high rates for early items and very low for others); it requires a complete BOQ and good supervision.

A unit price contract is a contract in which the contractor is paid a fixed price per unit of work (per m$^3$ of concrete, per m of pipe, per kg of steel), and the total payment is the unit price multiplied by the actual measured quantity. It is the same as the item-rate contract and is common for roads, earthwork, canals and building works in Nepal.

Features

The client gives estimated quantities in a BOQ; the bidders quote unit prices; and payment follows measurement of the work as done.

Disadvantages

1. The final cost is uncertain, and may exceed the budget if quantities increase.
2. The work of measurement, checking and billing is large, and calls for supervision.
3. Unbalanced bids: the contractor may load high prices on the early or underestimated items.
4. Quantity errors in the BOQ lead to disputes and claims for rate revision.
5. The contractor has little incentive to reduce the quantity or to save the client's cost.
6. The contractor may favour the items with high profit, and neglect the others.
7. The comparison of bids can be misleading when quantities are uncertain.

Contract

A contract is a legally enforceable agreement between two or more parties, in which one party (the contractor) promises to carry out specified work, and the other (the client) promises to pay for it.

Essential elements

1. Offer and acceptance: a proposal (tender) and its unconditional acceptance (letter of acceptance).
2. Intention to create legal relations.
3. Lawful consideration: the price or value exchanged.
4. Competent parties: of legal age and sound mind, or a registered company.
5. Free consent: no fraud, coercion, undue influence or mistake.
6. Lawful object: the work must not be illegal.
7. Certainty and possibility of performance: the terms are clear and capable of being done.
8. Written form and legal formalities: stamps, signatures, and witnesses, as required.

Importance in a large construction project

• Defines the scope, quality, price, time and payment terms clearly, so there is less misunderstanding.
• Allocates the risk and the responsibility of each party (the client, the consultant, the contractor).
• Provides a legal remedy and a procedure for variations, claims, delay, and dispute resolution (DAB, arbitration).
• Serves as the basis for the management of cost and time and as a baseline for monitoring.
• Gives security through bonds, retention, insurance and liquidated damages.
• Helps to raise finance, as banks and donors require formal contracts.
• Ensures compliance with laws and standards.

Methods of execution of work guided by the Public Procurement Act (PPA) 2063 and Rules (PPR) 2064

1. Open competitive bidding: national (NCB) and international (ICB)
2. Pre-qualification followed by bidding
3. Two-stage or two-envelope bidding
4. Sealed quotation (for small value)
5. Direct purchase (very low value or single source)
6. Works by user's committee / community participation (consumer groups)
7. Force account / departmental (amanat) work
8. Special contracts: turnkey, EPC, design-build, BOO, BOOT, BTO, and joint venture

EPC contract

Engineering, Procurement and Construction. A single contractor designs (engineering), procures the equipment and materials, and builds the project, delivering a complete working facility at a fixed price and date. Example: a hydropower plant or a substation where the EPC contractor delivers the whole plant including the electro-mechanical equipment. The risk of design and cost is on the contractor.

Turnkey contract

The contractor is responsible for everything from the design to construction, testing and commissioning, and hands over a ready-to-use project ("turn the key") at a lump sum price. Example: a hospital building constructed and equipped by one firm.

BOO contract (Build-Own-Operate)

A private company builds, owns, and operates the facility permanently, selling its services or output (for example, power to the NEA under a PPA). There is no transfer of ownership to the government. Example: a private independent power producer.

BTO contract (Build-Transfer-Operate)

The private party builds the facility, transfers ownership to the government immediately after completion, and then operates it for a fixed period to recover its investment through the fees. Example: a toll bridge or a water supply scheme that the developer operates for 20 years under the agreement.

A turnkey contract is one in which a single contractor is responsible for the entire project: design, procurement of materials and equipment, construction, testing and commissioning, and hands over the complete, ready-to-use facility to the client on a fixed date, at a fixed lump sum price. The client only has to "turn the key" to start using it.

 Client -- needs & performance specs -->
   Contractor: Design -> Procure -> Build -> Test
                              -> Hand over (ready)

Features

• One point of responsibility for design and construction.
• Lump sum price; the client gives performance requirements.
• The contractor takes most of the risk (design, delay, cost).

Merits

Single contract and responsibility; faster delivery through overlapping design and construction; price and time certainty; less management work for the client.

Demerits

Less control of the client over design and quality; difficult to change the scope; the contractor may cut the quality to save money; high contingency in the price; need a clear performance specification; fewer bidders are capable.

Use

Industrial plants, hydropower electro-mechanical works, hospitals, hotels, and large buildings where the client lacks technical staff.

Joint venture (JV)

A joint venture is an association of two or more firms (often a foreign and a local firm, or a large and a small one) formed to undertake a specific project together, sharing the resources, risks, profit and loss. The partners may sign a JV agreement, name a lead partner, and are jointly and severally liable to the client. Merits: pooling of finance, equipment, experience and technology to qualify for large projects; sharing of risk; transfer of technology. Demerits: conflicts in management, divided responsibility, and the complexity of agreement. In Nepal, a JV is common in large public works and hydropower, and the PPA allows it with specified requirements on the share of each partner.

Sub-contracting

The main contractor gives a part of the work (such as electrical, plumbing, or earthwork) to a specialist subcontractor under a separate agreement. The main contractor remains fully responsible to the client, with the subcontractor responsible to the main contractor. Merits: specialised skills and less need for own equipment; faster work; sharing of risk. Demerits: coordination problems, quality control difficulty, and extra margin. The client's approval is needed, and the extent is limited by the contract (often a maximum percentage).

Assumed data: a commercial complex (ground + 5 storeys) at Kathmandu, estimated cost Rs 100 million (excluding VAT), by the "Kathmandu Municipality Property Development Office" (client name assumed). Domestic competitive bidding under the Public Procurement Act, 2063.

        Government of Nepal (Assumed)
     Kathmandu City Development Office
        Invitation for Bids (First Publication)
    Date: 2083/__/__          Bid No.: KCDO/NCB/W-01/2083-84

1. The Kathmandu City Development Office invites sealed bids from eligible Nepali contractors for the "Construction of Commercial Complex (G+5) at Baneshwor, Kathmandu" with an estimated cost of Rs 100,000,000.
2. Eligibility: bidders must be registered with the Nepal Contractors' Association/ Construction Business Licensing Board for class "A" building construction; hold valid company registration, PAN/VAT registration, and a tax clearance certificate of the last fiscal year.
3. Qualification:
   • Experience: completed at least two building works of cost not less than Rs 60 million each, in the last 7 years.
   • Financial: average annual turnover not less than Rs 50 million in the last 3 years; a letter of credit/ credit line of Rs 15 million; no history of default.
   • Equipment and personnel: concrete mixer, vibrators, tower crane/hoist, and a site engineer (civil, 5 years' experience), and a safety officer.
4. Completion period: 18 months.
5. Bid documents can be bought from the office from 2083// to 2083// (office hours) on payment of a non-refundable fee of Rs 10,000, and may be viewed free at the office and downloaded from the e-GP portal.
6. Bid security: Rs 2,500,000 (2.5% of the estimated cost) in the form of a bank guarantee from a Nepal Rastra Bank licensed bank, valid for 120 days from the bid deadline.
7. Bid validity: 90 days.
8. Site visit and pre-bid meeting: 2083// at 11:00 AM at the site.
9. Last date and time for submission: 35 days from the first publication, till 12:00 noon, at the office.
10. Opening: at 1:00 PM on the same day in the presence of the bidders' representatives.
11. The employer may accept or reject any or all bids without any liability.

Address: Procurement Unit, Kathmandu City Development Office, Phone: 01-XXXXXXX, e-mail: xxx@kcdo.gov.np.

Pre-qualification (PQ) is the screening of contractors before the tender on their experience, finances, equipment and personnel, so that only qualified firms are invited to bid for the project.

Why necessary

• Ensures that only capable contractors take part in big, complex or specialised works, so reducing the risk of delay, poor quality and abandonment.
• Saves the time and cost of evaluation for the client and the cost of bid preparation for unqualified firms.
• Promotes fair competition among serious bidders and avoids unrealistically low bids.

Advantages

1. Reliable contractors; lower risk of failure.
2. Fewer bids, so faster and more detailed evaluation.
3. The bidders know the competitors are of similar strength; encourages them to bid seriously.
4. Reduces disputes and claims during execution.
5. Better chance of the project finishing on time, at cost, and with quality.
6. Allows the client to adjust the project with the capacity of the market.

Disadvantages

1. Takes extra time and cost before the bidding.
2. Reduces competition, and may lead to higher bid prices or cartel.
3. Risk of bias or favouritism if criteria are not clear; disputes by those rejected.
4. May exclude new, small or local firms with potential.
5. Qualification can change between PQ and bidding (financial position), so a recheck is needed.
6. The PQ documents need effort from both the bidders and the client.

Prequalification

Pre-qualification is the evaluation of contractors' capability before the tender, so that only qualified firms are asked to bid.

Steps

1. Decide whether PQ is needed (large, complex, specialised work).
2. Prepare the PQ document: project description, scope, qualification criteria (experience, finance, equipment, personnel, litigation), the evaluation method (pass/fail or marks), and the forms.
3. Invite applications by a public notice with a deadline.
4. Clarify queries and a pre-application meeting if needed.
5. Receive and open the applications publicly.
6. Evaluate the applications against the criteria by a committee, and verify references.
7. Approve the list of qualified applicants and inform all applicants of the result, with reasons for rejection.
8. Issue the bid documents and invite bids from the qualified applicants only.

Pre-qualification vs post-qualification

For a commercial complex of Rs 500 million, a large and complex building, pre-qualification of contractors is required. The procedure:

 Decide PQ -> Prepare PQ docs -> Notice -> Receive
   -> Open -> Evaluate -> Approve list -> Invite bids

1. Decide on PQ and set the criteria. Form a committee, prepare the PQ document with the project description, scope, value and duration.
2. Fix the qualification criteria (pass/fail or marks):
   • Eligibility: registration, license (Class "A"), PAN/VAT, tax clearance, and no blacklisting.
   • Experience: at least two completed buildings of comparable size (for example, not less than Rs 250-300 million each) in the last 5-7 years, with certificates from the clients.
   • Financial capacity: average annual turnover of not less than Rs 250 million for the last 3 years, audited statements, net worth, bank credit line, no loss.
   • Personnel: project manager, civil, MEP and quantity engineers with qualifications and experience.
   • Equipment: tower crane, concrete pump, batching and mixing plant, vibrators, formwork.
   • Litigation and past performance, and the JV conditions if allowed.
3. Publish the PQ notice in national newspapers and on the e-GP portal, with the deadline (at least the time required by the PPR).
4. Provide the PQ documents, clarify queries, and hold a pre-application meeting.
5. Receive and publicly open the applications.
6. Evaluate the applications by the committee: completeness, then the criteria; check the references and visit past works if needed.
7. Get approval of the shortlist, then inform every applicant of the result (with reasons for rejection).
8. Invite bids from the qualified contractors only, with the tender documents.
9. At the bidding stage, reconfirm the qualification (any change in financial condition) before award.

The tender (bid) document is the set of papers issued to bidders to prepare their bids; after award, parts of it become the contract. Typical content (as in the PPMO standard bidding document):

1. Invitation for bids (tender notice).
2. Instructions to bidders (ITB): eligibility, bid preparation, submission, opening, evaluation and award procedures, bid security, validity.
3. Bid data sheet: specific details of this bid.
4. Qualification criteria and the evaluation method.
5. Forms: bid form, qualification forms, bid security form, power of attorney, and the integrity pledge.
6. General conditions of contract (GCC) and the special conditions (SCC): rights, duties, payment, variations, time extension, liquidated damages, claims, disputes, termination, insurance, and defects liability.
7. Technical specifications of materials and workmanship.
8. Drawings (architectural, structural, services).
9. Bill of Quantities (BOQ) with preamble and the schedule of rates.
10. Contract forms: agreement, performance security form, advance payment guarantee.
11. Schedules: completion time, work programme, key personnel, equipment, and subcontractors.
12. Addenda issued before the bid deadline.

Tendering is the process by which a client selects a contractor through competitive offers. It ensures fair competition, value for money and transparency, as required by the Public Procurement Act, 2063.

 Prepare docs -> Notice -> Issue docs -> Site visit
  -> Submission -> Opening -> Evaluation
  -> Award -> Contract signing

Stages

1. Preparation: design, estimate, bid documents, approval of the procurement plan.
2. Notice: the tender notice is published for the required minimum days.
3. Issue of documents against the fee; clarifications and addenda; site visit and pre-bid meeting.
4. Submission of the sealed bids with bid security.
5. Public opening and recording of the bids.
6. Evaluation: preliminary, technical and financial; ranking.
7. Approval and notice of intent to award, with a period for complaints.
8. Award: letter of acceptance, performance security, and contract signing.
9. Notice to proceed and mobilisation.

Types of tendering

Open (national or international), selective (limited to the pre-qualified), negotiated, and single-source. Open tendering gives the maximum competition.

A pre-bid meeting is a meeting arranged by the client or the consultant, after issuing the bid documents and before the bid submission, with all prospective bidders. It is often combined with a site visit.

Purposes

• To explain the project, scope, important conditions, time and the method of evaluation.
• To clarify the ambiguities and doubts in the bid documents, drawings and BOQ.
• To let the bidders ask questions, and the client answers with equal information to all.
• To visit the site and see access, ground, utilities, and conditions affecting cost.
• To announce the corrections to the documents through addenda.

Procedure

1. The date, time and place are given in the notice and in the bid data sheet.
2. Bidders may send questions in writing in advance.
3. The meeting is held, and minutes are recorded.
4. The minutes, with the questions and answers, and any addendum, are sent to all who bought the documents (without naming who asked), and the bid deadline may be extended if the changes are major.

Importance

It reduces misunderstanding and claims later, ensures bids on the same basis, and increases fairness and transparency. Attendance is normally not compulsory but is strongly advised.