Tender Technical Specification and its Contents
Tender Technical Specification and its Contents
Tender documents are prepared for the purpose of procuring materials, production unit, services, or site activities. They are used for calling the bids. A tender document (Fig 1) usually consists of three parts, namely (i) notice inviting tender, (ii) commercial specification, and (iii) technical specification.
Fig 1 Components of tender document
Technical specification is that part of the tender documents which provides to the bidder technical details of the materials, plant and equipment, services, or site activities which the bidder is to supply if he becomes a successful bidder. In case a plant unit is to be procured, then the technical specification is very complex since all the four types of procurements get combined into one specification. Technical specification becomes contract technical specification after incorporating the changes agreed with the bidder during the tender negotiations.
The technical specification is the most important section of the tender document, both for the purchasing organization as well as for the bidders, since it is the specification which sets out precisely what characteristics are required from the materials, plant and equipment, services, or site activities being sought by the purchasing organization.
Technical specification is a comprehensive document which clearly, accurately and completely describes in detail what the purchasing organization wants successful bidder to supply. A clear, accurate and complete specification is the foundation of any purchase, and ensures the best chance of getting what the purchasing organization wants. Whether the purchase is for a small simple item, or a large complex plant, or the activities to be performed at the construction site, the technical specification needs to clearly outline the requirements to the bidder.
Technical specification has five mandatory requirements mainly (i) title of the specification, (ii) scope, (iii) statement of requirements, (iv) requirement for quality assurance, and (v) delivery schedule or implementation schedule.
There are two main types of technical specification. They are (i) the functional specification which sets out the functions that the materials and/or services are expected to fulfill, including the performance to be achieved, and (ii) the technical specification which specifies the technical characteristics of the materials or services. In the case of the procurement of the complete plant and equipment, normally the two types get combined.
The materials, plant and equipment, services are to be supplied, or the site activities are to be performed in accordance with (i) organizational standards (normally designated as ‘general standard specifications or GSS), and (ii) applicable national and/or international technical standards. Copies of the applicable GSS are part of the tender specification and these are normally annexed to the tender specification. Applicable national and/or international standards are to be specified at appropriate places in the technical specification.
As a general rule, the technical specification is required to include expected performance or output of the supplied materials and services. However, it is not necessarily to be defined how it is to be achieved. This aspect is normally left to the bidder. In this regards some flexibility is needed in the technical specification so as to get some useful input from the bidders which can be evaluated during tender evaluation and frozen at that stage.
It is to be ensured that the technical specification which defines the requirements of the purchase items are drawn up in a manner which meets the procurement principle of maintaining open and fair competition.
The characteristics of a good technical specification are as follows.
- The specification is clear and written in simple language which is easy to understand. No clause of the specification is to have more than one interpretation.
- The specification is not to be general but specific in nature. It is to be detailed and it must describe precisely what is required. No confusion should arise from the specification clauses. If the specifications include too much information and are too demanding, it becomes too difficult to get the right bid. Also, if the specifications do not carry enough information, and are not specific enough, then the offers of the bidders may not meet the requirements.
- The specification is to be accurate. The specification is to project clearly or specify exactly what the requirements are, not more or not less. Where possible, specification is to state in terms of what the materials, service, or work is meant to achieve (the outputs or functions to be fulfilled,) rather than listing specific technical requirements. It is important to spend time and energy in order to ensure that the most up to date information is used in the preparation of the specification.
- The specification is to be complete in all aspects. All the requirements are to be fully covered. This saves time as it reduces the number of clarifications needed on the bid from the bidder.
- The specification is to identify clearly the essential requirements. It includes all those things which are essential to what is required, and critical to the performance. The bidder is to know that these essential requirements he has to meet in the bid as otherwise his bid stands rejected.
- The specification is to identify the desirable requirements. The desirable requirements are those things which are desired, but which are not critical to the performance.
- A good specification Includes evaluation criteria so that the bid can be judged on the basis of whether it is meeting the requirements. Evaluation done based on the evaluations criteria provides a score, indicating how important each of the items is for the organization. A higher score is given to items that are essential. A lower score is given to items that are desirable, but not essential.
- In case of procurement of materials, it is important that the specification emphasizes the functions of the material. It is better to emphasize in the specification what the material is meant to do rather than to give emphasis on the technical requirements. This maintains the focus on purchasing materials which meet the need and purpose. A brand name is not to be used in a specification. If it has to be, then it is to be followed by the words, ‘or equivalent’.
- Specification is to be consistent. Specifications for similar requirements are to be the same even if the materials are used for different purpose.
In case of the procurement of a complete production unit (e.g. a blast furnace complex, a steel melting shop, or a rolling mill etc.) the tender technical specification need to be very comprehensive since it generally include all type of activities. A check list of the items which is required to be included in such technical specification, depending on the nature of the requirement, is given below.
- A brief description of the procuring organization as well as the steel project.
- A copy of general layout showing the location of the production unit for which the bidder is to bid.
- A copy of the shop layout showing the main technological equipment and boundary limits available to the bidder.
- A brief description of the conditions at site.
- A brief description of the meteorological data for the site.
- A brief description of the activities which the bidder is to bid such as design and engineering, manufacturing, control-assembling, packing, transporting, storing at site, supervising the erection, training of operational personnel, supervision of erection, commissioning, and conductance of the performance guarantee test etc.
- Number of working days available in a year and working shifts available each day with working hours per shift. This is required for the capacity calculations.
- Input materials along with their specifications available to the bidder
- Details of the major technologies to be employed for the production unit being procured.
- Required capacities and production rates expected from the production unit.
- Details of the products to be produced in the production unit. This includes product size, quality, specification, and packing details.
- Boundary conditions available to the bidder as well as specification of the utilities (power, water, fuel, steam, and compressed air etc.) available to the bidder at the boundary limit.
- Details of the regulatory norms which are to be followed by the bidder. If any regulatory approval is required to be taken by the bidder it is to be mentioned.
- Scope and/or functions of the work or service required. This includes the list of major equipment and materials (refractories, cables, and pipes etc.) along with their quantities. In case bidder is to use some special material for the manufacture of the equipment (such as heat resistant steel, wear resistant steel, or stainless steel etc.), it need to be specified.
- Approvals needed for drawing and documents during engineering.
- List of drawings and documents and their submission schedule.
- Feed-back data required during engineering and its submission schedule.
- Commissioning spares and quantities of operational spare parts which are required to be included in the scope.
- Listing of the change parts and set of the change parts to be included in the scope.
- List of activities being carried out by other suppliers/contractors within the boundary limit.
- List of activities included in the scope of the bidder.
- List of exclusions from the scope of the bidder.
- Inspection requirement for the equipment and materials. Whether stage inspection is required or whether final inspection before packing of the equipment and material for dispatch is needed or inspection is to be done only at site after receipt is to be specified.
- Start date, finish date, and time schedules of activities.
- Details of free issue of equipment and materials.
- Construction equipment available with the project management in case bidder wants to use them.
- Division of responsibilities between project management and successful bidder.
- Clauses regarding safety norms and fire prevention.
- Requirement of progress reports for monitoring and required frequency of the report.
- Abbreviations and terminology used in the tender technical specification.
- A detailed questionnaire for the bidder to answer. This questionnaire is usually quite detailed so that anything missed in the specification gets covered up.