In vital conditions in procurement, it is straightforward to recognize why creation contractors regularly quote decreased expenses to win a tender. However, the latest studies figures inside the civil works region had been thinking about the sustainability of such low rates, and whether the technique of procurement is chargeable for the same.
There are two main ways to procure goods and services: single-stage and two-stage tendering.
Single-Stage Tendering
Single-level tendering is a bidding process where a company bids on a project, rather than bidding on individual parts. The method ensures that the patron/purchaser can make stable aggressive bids – which means the contractor/bidder may also determine to charge aggressively/low to win the project/contract.
It might be a green trend to get a contractor. If the assignment specification is missing or unclear, it may result in changes being made later withinside the contract, and the final cost may be very high.
Advantages:
- A single-degree gentle is effective to a bidder, irrespective of what assets they presently have.
- It`s a brief traditional tendering process.
- The consumer can look ahead to price-aggressive bids, making it a value-for-cash project.
Disadvantages:
- The contractor at instances might not apprehend the task layout even as he’s making ready his bid record.
- Competitive fee stress might also additionally make the contractor bid decrease than the actual.
- The threat aspect isn’t accounted for because the fee is quoted on the premise of the soft record facts shared through the client.
- The contractor will now no longer be capable of modify to adjustments withinside the task as soon as the soft is awarded.
Two-Stage Tendering
Two-level tendering includes the use of preliminary statistics to facilitate early collaboration between purchaser and contractor. For maximum benefit from a project, it is advantageous to apply for the project as early as possible. This permits early entry into the contracting process for the primary contractor and the purchaser, creating certainty about the layout and price of the project. This approach of procurement helps speed up timelines by being a pre-acknowledged thing between the purchaser and supplier.
This preliminary segment provides information about venture preliminaries, such as technique statements, design, and overhead costs.
Advantages:
- Greater price truth is accomplished because the scope of labour is well-described and communicated.
- Contractor involvement allows them to perceive capacity dangers making them prepared for the same.
- Project implementation has workable cut-off dates heading off damages in the direction of postponement of assignment completion.
Disadvantages:
- The bid charge is better because it entails pre-smooth discussions.
- The two-level tendering procedure can be greater time-eating, and this will now no longer be attractive to employers with a good improvement program.
- Increased contractor involvement withinside the preliminary undertaking strategy planning stage can play a terrible function withinside the layout plan if the contractor has hidden agendas.
Let’s have a look at a distinguishing table for the 2 stages for more concept clarity:
The Early Stage is when a Tendering business is just getting started and is still in its infancy. It may not have much revenue yet, and there may be few customers. There are two different stages that a business goes through when it begins to grow Early Stage and Late Stage. The Late Stage is when a business has more revenue and more customers. It may have developed a loyal following, and it may be more established.
| S.NO | Parameter of Comparison | Single-Stage | Two-Stage | |
| 1 | Meaning | This Permits Early Entry Among the Principal Contractor and Purchaser Assisting to Make Certain Layout and Cost Certainly | This enables early input between the prime contractor and the client, helping to secure design and cost | |
| 2 | Nature of Stage | Authoritarian | Collaborative | |
| 3 | Process Time | It Is a Quick and Relatively Straightforward Process. | Discussing various project parameters can be time-consuming for the contractor. | |
| 4 | Cost | There is a race to the bottom in the price of goods, and this is likely to continue. The lowest price bid is deadly to a contract. | The final price is determined with the positive participation of all parties involved. As a rule, you can expect high-priced bids | |
| 5 | Risk | There is a high risk involved in purchasing something from a seller because unforeseen problems may not be covered by the seller. | Low risk is included as both parties sit down to discuss hand damage rules and regulations beforehand. Risk is taking on extra risk to increase the rate of return. | |
| 6 | Most Utilized | Public Sector | Private Sector | |
There is no right or wrong answer when it comes to deciding which level of tendering to pursue. Both have their own set of pros and cons about what level of quality the client/consumer wants paintings to meet. E-soft portals nowadays allow both customers and contractors to offer bids on their websites.
BidAlert guarantees that you will not miss out on a soft housing tender. How can I make my resume more effective There are several ways to make your resume more effective, from formatting it properly to including relevant skills and experience.