The Disadvantage Of Public Tenders

02 Nov 2017

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1.1 Background.

New World Development Company Limited (the "Group"; stock code: 17.HK) based in Hong Kong, the Hong Kong conglomerate. Group was founded in 1970 and listed in Hong Kong in 1972, is now one of the Hong Kong Hang Seng Index constituent stocks. As of December 31, 2012, the Group had total assets of HK$3,110 million.

In the past 40 years, the Group's principal activities are property development, extended to the four core businesses, including property, infrastructure, services, and department stores, covering Hong Kong, Mainland China and Macau. Group and participate in direct investment and a number of other business development.

1.2 Introduction.

Taipan Eagle Sdn Bhd is a subsidiary of New World Development Company Limited and Luen Yum Development (M) Sdn.Bhd. New World Development Company Limited is a leading conglomerate based in Hong Kong. The Group was founded in 1970 and publicly listed in Hong Kong in 1972. It is a constituent stock of the Hong Kong Hang Seng Index with a total asset value of HK$286.3 billion as at 30 June 2012.For more than four decades, the Group has expanded its business portfolio from a single focus on the property business to four core areas, including property, infrastructure, services and department store in Hong Kong, Mainland China and Macau. The Group is also involved in direct investment and an array of other businesses.

Recently, the Group proposes to build 92 units of Semi detached Houses located in Plentong, Johor Bahru.detached Houses located in Plentong, Johor Bahru.

1.3 Project Description introduction.

the Group proposes to build 92 units of Semi-detached Houses located in Plentong, Johor Bahru. The houses began in December 2012 and are expected to be completed in 2014.The newly developed houses is an exclusive enclave of 3-storey semi-detached houses within a gated and guarded environment. It consists of 5+1 and 7-bedroom homes. The development also features a large clubhouse that comprises a swimming pool, gymnasium, playground and function hall – for a wholesome living experience.

2. As the company's advisory board member, I want to complete the following tasks:

i)Propose a suitable type of tendering method to be applied for the stated project and justify the reasons of your proposal.

ii)Discuss the tendering process to be involved in selecting the new contactors.

iii)Identify and explain the main criteria to be considered by the Group in selecting the eligible contractor(s) for the project.

2.1 Propose a suitable type of tendering method to be applied for the stated project and justify the reasons of your proposal.

2.1.1 The type of the tendering.

Strictly speaking tender is divided into public tenders and invitational tender

public tenders:

Public tender, also known as the infinite competitive tender, a tender in accordance with legal procedures, publications issued a tender notice, all qualified suppliers or contractors may equally participate in the bidding competition, from selecting the winner of selectivity tender.

The advantage of public tenders.

The open tender advantages is the ability to select bidders and more competitive, merit-based higher rate, but also can be avoided to a large extent bribes standard behavior in the tender, to the maximum extent possible, international government procurement usually ways.

The disadvantage of public tenders.

Public tender due to the large number of bidders, and generally takes a long time, it takes the cost is also large, open tender for the subject matter of the procurement smaller tender should not be used; also some strong professional project less qualified to undertake the potential bidders, or need in a relatively short period of time to complete the task of procurement best by invitation to tender.

invitation tender.

Invitation to tender, also known as limited competitive tendering, tender side to select a number of suppliers or contractors to issue invitations to tender, selected from the successful bidder by the invited suppliers, contractors bidding tender. As mentioned above, the public tender in terms of the openness of the breadth of competition have greater advantages, but public tender also has some shortcomings, for example, due to the large number of bidders, generally takes a long time, it takes also more cost for the procurement of the smaller of the subject matter of the tender for public bidding is often not worth the candle; addition, some highly specialized, there are fewer potential bidders qualified to undertake, or need in a relatively short period of time to complete the task of procurement and it is not open tender. Invited to tender to some extent make up for these shortcomings, while relatively full play to the advantages of the tender.

The advantage of invitation tender.

Shorter time, a small amount of work, the target set, and tender to spend the Province; bid rate was invited to tender units.

The disadvantage of invitation tender.

Is not conducive to tender units to get the best offer, best investment returns; small number of bidding units, less competitive; bidding units available information in the choice of invited people before inevitably there are some limitations, tender unit is difficult to understand all contractors, often ignored in technology, offer more competitive enterprises, to tender units is not easy to obtain the most reasonable price, may not find the most suitable contractor.

2.2 As the recommendations of an advisory group of the Company and the reasons

(1) Select the tender types of recommendations.

Above has been the various tender as well as their scope of application are described. Other than in terms of real estate projects, in addition to general office automation equipment procurement by invitation to tender or otherwise of government procurement, the majority of real estate projects are all high-tech, complex systems engineering projects, except for a few special project funding is relatively small other than in accordance with the provisions of the bidding open tender. So the Group using public tenders.

Reasons selected by open tender.

Because the proposed houses began in December 2012 and are expected to be completed in 2014. This show that Project a long time, suitable for the show open, just, fair competitive bidding principles to prevent and overcome the monopoly; effectively prompted the contractor to enhance competitiveness practicing internal strength, and strive to improve the quality of the project, shorten the construction period, reduce the cost, and seek conservation and efficiency, and create the most reasonable interest return; conducive to fraud prevention bidding activity operators and supervisory personnel.

2.3 Discuss the tendering process to be involved in selecting the new contactors.

Open tender to be divided into six steps.

Preparatory work.

Bid Opening venue arrangements.

Communication between the participants.

Related Documents.

The use of tools, objects or equipment.

Guidelines for bidders to enter the opening room.

The bidders sign, submission of tender documents.

Guidance and supervision departments leading into the opening room.

The Bid Opening singing standard.

The end of the meeting.

2.3.1 Discuss important tender steps

(1) opening bids shall be pre-determined locations in the tender documents, bid opening meeting rooms to prepare in advance, before the opening of view and decorating the venue, to ensure that there is sufficient space and seating.

(2) lighting, monitor, projector and printing equipment commissioning, ensure that the normal use.

(3) communication with government procurement supervisory and administrative departments

(4) The tender of large-scale projects, tendering agency shall notify the purchasing authorities, the audit authority and supervision departments.

(5) The implementation of the project when the opening of government procurement supervisory and administrative departments whether to send representatives to attend and to announce their projects opening time and Location.

(6) Notify the purchaser opening location and opening time to guide the procurement unit the bid evaluation smoothly reach the opening location.

(7) Shall not be disclosed to bidders acquire the tender documents potential bidders name, quantity, and may affect fair competition bidding situation.

(8) To keep abreast of the case the Bidders bid bond to pay and promptly inform the bid bond submitted at the stipulated time.

(9) Notice tender opening time, to remind bidders behalf at the opening of tenders to carry a proof of identity.

(10) Bidder submission of tender documents, according to the requirements of the tender documents to submit a bid bond, the bidding agency shall refuse to accept (the bidder has clearly not bid bond).

(11) the representative of the bidder to submit the tender documents, the requirements of the seal fails tender documents of the tender documents, tendering agency should be rejected.

(12) confirm request bidders to attend the opening of the tender documents.

(13) bid documents to reject all bids deadline for submission of tender documents.

2.4 Identify and explain the main criteria to be considered by the Group in selecting the eligible contractor(s) for the project.

2.4.1 The group How to choose the general contractor.

Actual choice of project management model should be based on the implementation of the project background (internal and external environment), characteristics or difficulties, the scale of investment, risk factors, and taking into account the complexity of the technology selected domestic and international engineering company or project the strength of the management company, the project's start-up time, and other factors to determine the management and executive level management model.

conclusion.

As one of the company's team of consultants, I have chosen the way of open tender bidding, and select one of the highest strength engineering company or project management company.



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