CAN A TENDERER WITHDRAW HIS OFFER?

The purpose of tendering is to select a contractor to do the project for a reasonable competitive price. According to the institution of civil engineers(1976,p.100), main purpose of tendering procedure is to secure economies in project costs by establishing competition between firms willing to enter in to a contract for the performance of specific work. After selected the tenderer, employer and the selected tenderer will enter in to a contract.

Contract is an “agreement between two or more parties which is intended            to have legal consequences”-(Brook 2004, p.35)

Basically there should be three requirements for make a contract. Those are;

·         Offer

·          Acceptance

·          Consideration

The common understanding is that a Contract will come into existence if and when the contractor’s offer accepted by the client. Until the offer is accepted there is no contract. Generally contractor’s offer valid for a limited time period, and the time period may stated in the tender document and/or invitation to tender and sometimes its states in the governing law.

For an example Qatar Central Tender committee law article 16 has states ”Period of validity of tender after opening provided that this period shall not exceed ninety days. The tender shall remain effective and irrevocable during this period.”

However, offer should accept before it terminate. There are few circumstances which may terminate the offer. Those are;

1)      On death of either party

2)      Withdraw the offer

3)      After a specified time/reasonable time (According to the Qatar Central Tender committee law 90 days)

4)      When the client makes a counter offer.

Hence the tenderer can withdraw the offer before it is accepted.  However the tenderer can submit a new offer before tender closing time.

In the case of National Highway Authority of India v M/s Ganga Enterprises, The High court held “To have an enforceable contract there must be an offer and unconditional acceptance. A person who makes an offer has the right of withdrawing it before acceptance”

However this situation may differ if the tenderer agrees to keep his offer open for a specific period for a consideration. For an example employer pays payment to the contractor to keep the tender open such as an employer pays QR 40,000 to tenderer for keep the tender open for 120 days. In such case there is a subsidiary contract between the tenderer and client to keep open offer for a 120 days. If the tenderer withdraw the offer before 120 days, he may sue by the client for breach of contract. In such case, probably he may have to pay, additional cost incurred by the employer to select another contractor for the project.

Further the tenderer can submit a revised offer to supersede the original offer before stipulated tender closing date & time.

Further it’s important to study position of tender bond with regarding withdraw of an offer.

 If a tenderer withdraws an offer, can he ask to return tender bond?

The tender bond could be considered as the consideration for a subsidiary contract between tenderer and employer, had been formed when submitting the offer by tenderer. This situation is similar to the aforesaid example, where the employer pays money to keep tender open for 120 days.

First look the purpose of tender bond. Main purposes of tender bond are to ensure that a successful tenderer will enter in to a contract and compensate for the cost associate with the tendering in case of withdrawal. Further it makes sure that only genuine bids are received.

If tenderer able to get back the tender bond without forfeiture, the purposes of the tender bond would be lost. Moreover there is a breach of contract. Hence even the tenderers able to withdraw their offer, they haven't right to withdraw the tender bond.

In the case of National Highway Authority of India v M/s Ganga Enterprises, the supreme court held "A person may have a right to withdraw his offer but if he has made his offer on a condition that some security money will be forfeited for not entering into contract or some act is not performed, then even though he may have a right to withdraw his offer, he has no right to claim that security be returned to him"

Tender bond may forfeiture in case of withdraw the offer within tender bond validity period, further it may forfeiture if the successful tenderer fails to sign the contract or provide performance bond within given time period.

In Qatar Central Tender Committee (QCTC) law article nr 42 has states "If the successful tender does not deposit the performance bond .......Central tender committee may recommend cancelling his tender and confiscating the tender bond...”. Moreover, the article 44 has states “If the tenderer fails to sign the contract on the fixed date or if he withdraws ......he shall be liable for .....Confiscation of the final security (tender bond)”

Since the tenderer haven't right to withdraw the tender bond, when it would expire?

 Generally in tender document and/or invitation to tender has provided validity period for the tender bond. Further there may be legislations which states the tender validity period. For an instant Instruction to tender on QCTC, clause 7 has states "Tender bond... It must be unconditional and valid for 120 days as from the date of opening of the tender".

Generally tender bond validity period is greater than tender validity period. It is as a safeguard for the extended tender validity period. Article 25^th of QCTC law has states “the period of its validity shall not be less than thirty days after the termination of the period fixed for the validity of the tender

However general practice is to return the all tender bonds after the successful tenderer deposited the performance bond. According to the QCTC law article 26, “The tender bond shall be returned to their owners after the tenderer whose has been accepted, has deposited the performance bond”.

By considering above facts I believe, it's good practise to add a clause to instruction to tenderers, which clearly states the position of tender bond with regarding withdraw the offer.

Sample clause;

1) The Tender bond may be forfeiture;

a)      If the tenderer withdraws his offer before tender bond expires.

b)      If the successful tenderer fails to enter in to the Contract within the specified time.

c)       If the successful tenderer fails to provides the Performance bond within the specified time.

 I conclude, tenderer can withdraw his offer before accept without reasoning, However the tenderer’s tender bond may forfeiture.

References;

·         Brook, M., (2004). Estimating and Tendering for Construction Work. 3^rd ed. Oxford: Elsevier Butterworth-Heinemann.

·         Chappell, D., (2006). Construction Contracts-Questions and Answers. Abingdon: Taylor & Francis.

·         Jone, M. and Will. H., (2000). Construction Contracts Law and Management.3rd ed. London: Spon Press.

·         Law No.8 of 1976, Qatar. Qatar Central tender Committee.

·         Pathak, A., (2007). Legal Aspects of Business.2^nd ed. Abingdon: Tata McGraw-Hill.

·         The Institution of Civil Engineers. (1976).An Introduction to engineering economics.2^nd ed. London: William Clowes & Sons Ltd. 

Contrast between CESMM3 and CESMM4

Major difference between CESSM3 and CESSM4 is CESSM4 has a neutral status with regards to the Specification and Contract. It means generally there are no particular Conditions of Contract or Specification for the CESMM4. Therefore CESMM4 can be used with any conditions of contract and National Standard.

CESMM3 has defined “ICE Conditions of Contract” as the Conditions of Contract (Definition 1.2). However CESSM4 hasn’t referred particular conditions of contract. Mandatory schedule in the Preamble has introduced to fill the gap.  Purpose of the schedule is to avoided any discrepancies or ambiguities between the Conditions of Contract and Method of measurement by identifying the relevant clauses in the schedule. For an example refer Clause 6.4.

CESMM3 – For the purpose of clause 60 interim additions or deductions on account of the amount ……

CESMM4 – For the purpose of interim payments additions or deductions on account of the amount ……

Above clause 6.4 of removed the reference to ICE Conditions of Contract and asked to identify the relevant clause nr in preamble schedule.

Generally CESSM3 is referred to British standard (Definition 1.15) nevertheless CESSM4 is generally in neutral status. For an example refer below additional rules A1 of class J.

CESSM3 - The material, joint types, nominal bore and Lining requirements of pipe fittings shall be stated in the item description and reference given to applicable British Standard specifications and specified qualities.

CESSM4 - The material, joint types, nominal bore and Lining requirements of pipe fittings shall be stated in the item.

However there are two exceptions for the rule due to impracticability of producing BoQ’s without referring to British standards. Those are Concrete mixture and Road construction. However if the referred British standards is not the one relevant to the project, bill compiler should mentioned the relevant standard in the schedule in preamble.

CESSM4- D1. Items for the provision of concrete shall be classified in accordance with BS 8500 and (November 2006) BS EN 206-1.

If BS 8500 is not the standard relevant to a particular project, bill compiler should mention the relevant standard in item 8 –Class F Definition rule D1.

Also each class has a row which hasn’t allocated for any item. Intention of this may be to measured items where CESMM is comprehensive with the CESMM code reference 999.

Other than those key changes, there are many changes and new items that can be notices in CESMM4. Few of those are listed below.

(Click on images for large view)

G. එක් එක් මිලදිගැනීමේ භාවිතා කල හැකි අවස්ථා (Circumstances in which the various types of procurement method may be used)

සිංහල | ඉංග්‍රිසි

මිට පෙර අප එක් එක මිලදිගැනිමේ ක්‍රම ගැන සාගච්ජා කලා.  දැන් එම ක්‍රම යොදාගත හැකි අවස්ථා මොනවාද යන්න සලකා බලමු. ප්‍රයෝගිකව බලන කල යම් ව්‍යාපෘතියක් සදහා සුදුසු මිලදිගැනිමේ ක්‍රම  කිහිපයක් තිබිය හැක.එහිදි ප්‍රමාණ සමික්ෂකවරයාගේ වගකිම නම් වඩාත්ම සුදුසු ක්‍රමය තම සේවාදායකයා සදහා නිර්දේශ කිරිමයි.


A) නිත්‍ය ප්‍රමාණ පත්‍රය (Based on firm bills of quantities)

i) සම්පුර්ණ සැලසුම(design) නිම කිරිමට හා නිවැරදි ප්‍රමාණ පත්‍රයක් පිලියෙල කිරිමට ප්‍රමාණවත් කාලයක් තිබෙන අවස්ථාවල.

ii) සේවාදායකයාගේ වගකිම(commitment) මුලදිම දැනගත යුතු අවස්ථාවල. උදාහරණයක් ලෙස අවශ්‍ය මුදල් සුදානම් කිරිමට, යෝජිත ව්‍යාපෘතියේ වියදම් සදහා අදාල බලධාරින්ගෙන්/ ආයතන වලින් අනුමැතිය ලබා ගත යුතු අවස්ථාවල.

B) දල ප්‍රමාණ පත්‍රය (Bills of approximate quantities)

i) යම් මට්ටමකට සම්පුර්ණ කර තිබුනද එය නිවැරදිව ප්‍රමාණයක් ගණනය කිරිම සදහා ප්‍රමාණවත් නොවිම හෝ සැලසුම සම්පුර්ණ කිරිම ඉක්මනින් කල නොහැකි ව්ම.

C) ඩ්‍රෝවින් හා පිරිවිතර මත පදනම් ක්‍රමය (Based on Drawings and Specification)

i) කුඩා ප්‍රමාණයේ ව්‍යාපෘති සදහා.

ii) ව්‍යාපෘතිය සදහා ඇති කාලය කුඩාවිම හා කුට්ටි මුදල් (Lump sum) කොන්ත්‍රත් ක්‍රමය යටතේ ව්‍යාපෘතිය ක්‍රියාත්මක කරන අතරම ප්‍රමාණ පත්‍රයක් පිලියල කිරිම තුලින් ලබන ප්‍රයෝජනවලට වඩා ව්‍යාපෘතිය කලින් නිම කිරිම වාසි සහගත බව සේවායෝජකයා සලකන අවස්ථාවල.


D. මිල ගණන් ලැයිස්තුවක් පදනම් කරගත් ක්‍රමය (Based on Schedules of Rates)

i) සවිස්තර සැලසුමක් (Detail design) පිලියෙල කර නොතිබිම හෝ දැනට පිලියෙල කල සැලසුම(Design) වෙනස් විමට ඉඩ තිබිම.

ii) කාලය ඉතා වැදගත් අවස්ථාවල.

iii) වාර කොන්ත්‍රත් සදහා(Term contracts). එකම ආකාරයේ වැඩ, සිමිත කාලයක් තුල ඇති අවස්ථාවල.උදාහරණයක් ලෙස වසර 5ක කාලයකට ගොඩනැගිලි නඩත්තු කොන්ත්‍රතුවක් සදහා.

E)  මුල්‍ය ප්‍රතිපුරණය මත පදනම් වු ක්‍රමය (Based on cost reimbursements)

i) කාලය පිරිවැයට(Cost) වඩා වැදගත් අවස්ථාවල.

ii) මිට පෙර සේවායෝජකයාට(Client) සතුටුදායක ලෙස වැඩ කල, ව්‍යාපෘතිය කාර්ය්‍යක්ශමව නිම හැකි යැයි විශ්වාසකරන අයෙකුට ව්‍යාපෘතිය ලබා දිමට අවශ්‍ය අවස්ථාවල.

iii) හදිසි ඉදිකිරිම් කටයුතු වලදි. උදාහරණයක් ලෙස අනතුරුදායක මට්ටමක ඇති ව්‍යුහයක්(Dangerous structure)/ගොඩනැගිල්ලක් අලුත් වැඩියා කලයුතු අවස්ථාවල.

iv) අලුත්වැඩියා කොන්ත්‍රත්තු සදහා(Maintenance contracts).

v) අවශ්‍ය ලියකියවිලි පිලියල කිරිමට ප්‍රමාණවත් තරම් කාලයක් නොමැති විම හෝ එය ප්‍රයෝගික නොවිම.

 ඉංග්‍රිසි

Now we are going to discuss the circumstances in which the various types of procurement method may be used. In practically there may be few suitable procurement methods suitable for a project. In such circumstances Quantity surveyors duty is to advice/recommend the client regarding the most suitable procurement method.


A ) Based on firm bills of quantities

i) When there is time to prepare a sufficiently complete design to enable accurate quantities to be measured.

ii) When the client's total commitment must be known before hand, for example,in order to make adequate borrowings arrangements or when approval to the proposed expenditure has to be taken from authorities/officers.

B) Bills of approximate quantities

i) When the design is fairly well advanced, but there is insufficient time to take off accurate quantities for the  design will not be sufficiently complete soon enough for that to be done.

C) Based on Drawings and Specification

i) For small scale projects

ii) Where time is short and the client considers it to be less important to have the benefits of bills of quantities than the early completion of the construction work, while retaining the advantages of a lump sum contract.


D. Based on Schedules of Rates

(i) When the details of the design have not yet been worked out or there is considerable uncertainty with regard to them.

(ii) When time is pressing.

(iii) When term contracts are envisaged. These are appropriate where a limited range of repetitive work is required to be carried out, such as a maintenance contract of a house for 5 years term.



E) Based on cost reimbursements

(i) When time is short and cost is not as important as time.

(ii) When the client wishes to use a contractor who has worked satisfactorily for him before and whom he can trust to operate efficiently, while being prepared to pay the higher cost entailed in return for the advantages.

(iii) In cases of emergency, such as repairs to dangerous structures.

(iv) For maintenance contracts.

(v) For alterations jobs where there is insufficient time or it is impracticable to produce the necessary documentation.

From: Birchall,S. & Ramus,J.,1996.Contract Practice for Surveyors.3rd ed.Great Britain:Laxton’s

F. මිලදිගැනිම් ක්‍රම කොන්ත්‍රත් සමග යෙදෙන ආකාරය (The composite nature of contracts)

සිංහල  | ඉංග්‍රිසි

කලින් අප මිලදිගැනිම් ක්‍රම(Procurement method) වෙන වෙනම විස්තරකලද ප්‍රයෝගිකව ගත් කල ඒවා යෙදිමේදි තනිවම යෙදෙනවාට වඩා තව ක්‍රම දෙකක් හෝ ඉට වැඩි ගණනක් සමග මිශ්‍රව යෙදේ.

උදාහරණයක් වශයෙන් ගත්කල Bills of firm quantities භාවිතා වන කුට්ටි මුදල් කොන්ත්‍රත්තුවක නැවත මිනුම් කලයුතු Provisional quantities ද යෙදේ. එම Provisional quantities දරන්නේ Bills of approximate quantities/Schedules of rates හි ලක්ෂණවේ.

එමෙන්ම Bills of firm quantities භාවිතා වන කුට්ටි මුදල් කොන්ත්‍රත්තුවක Provisional sum යෙදිම නිසා කුට්ටි මුදල් කොන්ත්‍රත්තුව යටතේ ප්‍රථමික පිරිවැය හා ප්‍රතිශත ගාස්තු ක්‍රමයක් ඇතිවේ.

ඉංග්‍රිසි

Practically contracts are combined the characteristic of two or more procurement types.

For an example, a lump sum contract with Bills of firm quantities may contain with Provisional quantities. The Provisional quantities are bearing the characteristic of Schedules of rates method/Bills of approximate quantities method.

Also a lump sum contract with Bills of firm quantities may contain “provisional sums”, which bearing the characteristic of Schedules of cost plus percentage fee method.

From: Birchall,S. & Ramus,J.,1996.Contract Practice for Surveyors.3rd ed.Great Britain:Laxton’s

DISPUTE RESOLUTION MECHANISUMS IN QATAR LABOUR LAW

INTRODUCTION

Law No (14) of the Year 2004 is the Qatar Labour law. The Law is applicable for every Labours and Professionals including Quantity Surveyors. It has described most significant areas related to employees in sixteen parts, namely;

Part 1: Definitions and General Provisions

Part 2: Vocational Training

Part 3: Regulation of The Employment Of workers

Part 4: The Individual Labour Relationships

Part 5: The Disciplinary Power of the Employer

Part 6: Wages

Part 7: Regulation of the Working Hours and Leave

Part 8: Employment of Juveniles

Part 9: Employment of Women

Part 10: Safety, Vocational Health and Social Care

Part 11: Work Injuries and Compensation Thereof

Part 12: Workers Organizations

Part 13: Joint Committees, Negotiation and Collective

Part 14: Collective Disputes

Part 15: Inspection of Work

Part 16: Penalties

Dispute resolution is one important area for Quantity Surveyors. They advice clients regarding construction disputes and moreover they may practice as Adjudicators, Mediators and Arbitrators. Nevertheless, he also in a risk to subject to disputes with his employers and Clients.

Hence it is important to know the applicable law for QS's working in Qatar in relation to labour dispute resolution.

Aim of this article is to discuss the labour dispute resolution mechanisms available in the Laws.

As I discuss in “Dispute resolution mechanism”, there are several types of Dispute resolution mechanisms available in the world such as Negotiation, Mediation, Conciliation, Mini trial, Arbitration and Litigation.

In the Law has adopted following Dispute resolution mechanisms for labour disputes resolution.

1) Negotiation

2) Mediation

3) Conciliation

4) Arbitration

NEGOTIATION

According to the Article 129 any disputes between employer and workers shall try to settle by themselves.

“If any dispute arises between them and some or all of his workers the two parties to the dispute shall try to settle it between themselves ....”

MINI TRIAL

Article 129 states, in case of a dispute between employer and workers, if there is a joint committee in the company, they can be referred the case to the committee. Joint committee hasn’t address in the Law in detail; however this would be similar to the Mini Trial approach.

“If there is a joint committee in the establishment the dispute shall be referred to it for settlement.”

MEDIATION

If above two mechanisms failed then the next step is Medication.

According to the article 129, workers shall submit complaint in writing to employer with a copy to the labour department and the employer shall reply in written to the worker within one week, with a copy to the department. If the reply does not resolve the dispute department will try to settle it through Mediation within 15 days.

“1. The workers shall submit their complaint or claim in writing to the employer with a copy thereof to the Department.

2. The employer shall reply in writing to the complaint or claim of the workers within a week from his receiving the same and shall send a copy of the reply to the Department.

3. If the reply of the employer does not lead to the settlement of the dispute the Department shall try to settle the dispute through its mediation.”

CONCILIATION

If they fail to bring both parties in to a common ground within 15 days, then the department should submit the dispute to a Conciliation committee.

“If the mediation of the Department does not lead to the settlement of the dispute within fifteen days from the date of the employer's reply the Department shall submit the dispute to a conciliation committee for its decision thereon.”

According to the article 130, the Conciliation committee shall comprise 3 members. One shall nominate by the employer and other by the workers. Chairman of the committee shall be appointed by the Minister. The committee have authority to get assistant of a specialized consultant to make a decision. The committee shall give its decision within a week and it shall be binding on the all parties, if they had agreed to refer the dispute to the committee.

“The committee may be assisted by consultation with any of the specialists before deciding on the dispute and shall issue its decision on the dispute within a week from the date of its submission thereto.

“The decision of the committee shall be binding on the two parties to the dispute if the parties had agreed in writing to referring the dispute to the committee before its meeting to decide on the dispute and ....”

ARBITRATION

If parties have agreed to refer the dispute to arbitration, the above conciliation step is not applicable and the dispute will directly refers to an arbitration procedure.

“.... and if there is no such an agreement in this respect the dispute shall be referred to an arbitration committee within fifteen days and the arbitration shall be mandatory for the two parties.”

According to the article 131, the Arbitration committee shall be formed under the presidency of a Judge. One member is a representative of the workers and others, a representative of Qatar Chamber of Commerce and a representative of the Ministry.

According to the article 132, the committee shall render final awards on majority basis. However in case of equality of votes the chairman of the committee shall have a casting vote. Committee can review documents and conducts hearing before they make the award.

“The committee in carrying out its duties may peruse all papers, documents and all evidence and may compel any- person possessing these papers, documents and evidence are to produce the same and may enter the establishment for conducting necessary inquiry and take all necessary procedures for settling the disputes.”

Until the dispute settle, both parties shall continue their duties and responsibilities. It has clearly mentioned in article 133.

“An employer may not close the place where he is employing the workers or stop the work or refuse to continue to employ any worker by reason of a dispute that has not been decided on by the conciliation or arbitration committee.”

It is a good movement, that Qatar has totally depends on Alternative Dispute Resolution methods rather than traditional litigation with regarding labour disputes. There is no information regarding the cost of dispute resolution in the act.

Q & A

Scenario:

Mr.Bhathiya practised as a Quantity Surveyor in Qatar for ALEC Contracting Limited. He got an accident and admitted to the hospital. He discharged from the hospital and return back to home after 2 weeks from the accident. He has informed to the ALEC, that he is still not well and needs another additional 2 weeks for rest as sick leave since already he finished his all sick leaves. However ALEC has rejected his request and asked him to report to the office. Mr.Bhathiya also refuses the company’s request.

Finally the contract was terminated by the company. After the termination, other employees planned to go on strike against the termination.

1. Can Mr.Bhathiya refuse to come for work by refusing company’s request?

According to the article 112 such disputes (dispute arises between the worker and the employer as to the ability of the worker to resume his work) shall refer to the competent medical authority and their decision shall be final.

2. Can employees go on strike?

Yes. But under certain circumstances and subject to approval of the committees.

“Workers are allowed to form a committee if there are at least 100 Qatari workers in the company. The Labour Law also contains provisions allowing workers to go on strike under certain circumstances and subject to approval of the committees. While this may afford some protection for rights of workers in certain large organisations and industries, those who are employed in small businesses or in trades that almost exclusively employ foreign workers would not be eligible to form such a union or committee.¹”

In 2010 September, 90 labourers were arrested by the police and deported for strike against their company that violated an agreement with them².

REFERNCES

1. Law update. (2009). Labour law. [Online]. Available from: http://newsweaver.ie/altamimi/e_article001432208.cfm. [Accessed: 05th October 2011]

2. Migrant right. (2010).Nepali workers deported from Qatar for daring to strike. [Online]. Available from: http://www.migrant-rights.org/2010/09/23/nepali-workers-deported-from-qatar-for-daring-to-strike. [Accessed: 05th October 2011]

3. Law No (14) of the Year 2004, Doha: Qatar Labour Department.