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The contractors’ pre-bid meeting

In June and July 2016, The Builders’ Garage published a two-part article entitled The Contractor’s Technical Proposal. In this article, I shared my personal experience preparing a technical proposal for a large infrastructure project. I also highlighted that prior to the preparation of a detailed technical proposal, contractors are advised to nominate a team of competent people to attend a pre-bid meeting.

It is at one of these pre-bid meetings that I met McDonald, about a year ago. He had been recruited by an agency to improve the design of one of its new water treatment plants, which was in the initial stages of construction.

In this article, McDonald shares his experience preparing for, and conducting a pre-bid meeting for an infrastructure project valued at approximately £100m.

Cyrus: McDonald, you must have spent a lot of time designing water treatment plants!

McDonald: Yes, I have designed many water treatment plants around the world. I have also assisted a number of contractors prepare detailed technical proposals, which have enabled them submit competitive bids.

Cyrus: To what extent have you been involved in the preparation of a technical proposal?

McDonald: I was once part of a design team that was required to assist our client conduct a successful pre-bid meeting for the construction of a backbone water supply system somewhere in Sub-Saharan Africa. The entire scope of work comprised three lots.

Lot one comprised a water intake, with its raw water abstraction main, a water treatment plant and a treated water-pumping main to a reservoir.

Lot two comprised a 1400 mm diameter pipeline conveying water from the reservoir (located at the termination point of lot one) by gravity to a 30,000m3 reservoir, from which the water would continue its journey by gravity to an existing reservoir via a booster pumping station.

Lot three comprised the water distribution network, fed by the existing reservoir at the termination point of Lot two.

We, the design consultants had completed the detailed design and tender documentation process for all three lots and a pre-bid meeting was being organised for lot two. Prior to the announcement of the construction works tender, the client pondered the option of pre-qualifying contractors to quicken the selection process for suitable contractors. After a careful consideration of all the pros and cons associated with pre-qualification, a call for expression of interest was announced instead.

Twenty-five firms expressed interest in executing the construction works for lot two. The shortlisting process lasted approximately six weeks, and four contractors made it to the shortlist. Three out of the four companies were single entities whereas the fourth was a consortium of two companies.

The shortlisted contractors were issued tender documents and the entire bidding process was scheduled to last 12 weeks. In the tender documents, the client indicated that a pre-bid meeting was to be held approximately two weeks after the date of issuance of the tender documents.

The preparatory stages

As the date for the pre-bid meeting approached, I reviewed the tender documents, visited the proposed construction sites and prepared responses to various requests for clarification that the client had received from the bidders.

In addition, the client assigned an officer to assist me draft an appropriate programme for the pre-bid meeting, and make all the necessary logistical preparations, which comprised organising an appropriate venue for the detailed question and answer session, and ensuring that we had a feasible traffic management plan in place.

Cyrus: Did you say traffic management plan and logistical preparations?

McDonald: Yes.

The proposed construction sites were sparsely located within the outskirts of the capital. Navigating all of them without a well-coordinated traffic management plan was bound to be a disaster.

Regarding logistical arrangements, the programme was to commence with a brief presentation of the scope of work envisaged in lot two, remarks from the client’s project director, followed by a question and answer session, a tea break, and later on a physical tour of the sites.

Cyrus: It appears this was not the first time you were coordinating a pre-bid meeting!

McDonald: You are right. This was going to be one of many I had previously organised and successfully conducted. However, every project has its own cocktail of surprises and lessons to learn so I was not going to take any chances.

Every project has its own cocktail of surprises and lessons to learn so I was not going to take any chances

The meeting

When the day of the pre-bid meeting finally came and all the bidders and their representatives had arrived, we commenced the meeting with formal introduction of all the individuals present.

The client’s director made some opening remarks largely related to competitively priced bids and good quality of work, and the fact that all bidders were required to demonstrate their competence to be considered for contract award.

Thereafter, a member of my team made a brief power point presentation of the scope of work envisaged, break tea followed and we later on drove off to the construction sites along a route that we had planned.

Cyrus: What was the general mood at this start up meeting?

McDonald: All representatives of the four shortlisted bidders attended and they seemed very excited.

At the key installations (see Figure 1) , the bidders asked a number of questions related to the availability of services i.e. water and electricity, and the exact location of the plot boundaries for the sites. The client and the consultant provided the responses to their questions.

Figure 1: Bidders asking questions at one of the sites

Fortunately, we did not get lost during the tour of the sites. After about three hours of the physical site tour, we returned to the venue where the day’s programme had commenced and the bidders asked more questions. Some of them were;

  1. What is the nature of the bidding process? Is it open international bidding?
  2. Will the client assist the contractor’s technical experts to process work permits and visas?
  3. Can you provide us a copy of the geotechnical report for the key installation sites, and possibly for the pipeline route?
  4. We are aware of the requirement to carry out pressure testing of the water pipelines once they have been laid in the ground. Shall the client provide water for these tests or will the contractor have to purchase it?
  5. Is the use of specialized contractors mandatory?
  6. Will the client provide sufficient way-leave for the contractor during the excavation and installation of the pipeline?
  7. Are the costs for temporary access to the construction sites to be included in the Contractor’s rates?
  8. Are all the sites free of encumbrances?
  9. After we have submitted our bids to the client, will the financing agency be involved in the evaluation process leading to the award of the contract to execute the works?
  10. Are you willing to extend the submission deadline?
  11. Is this a turnkey contract?
  12. Can we quote in foreign currency?
  13. Have all environmental clearances for the project been secured and if not, what will be the role of the contractor in this regard?

We provided verbal responses to the questions that were asked. We also prepared minutes of the day’s proceedings and sent them to all the bidders by email.

Cyrus: From your experience, what are the key things to look out for prior to and after conducting such an exercise?

McDonald: You should take note of the following

  1. Adequate preparation is extremely important – Requests for clarification from bidders are usually expected. You are advised to have a comprehensive understanding of your project. Once the bidders receive good feedback to their requests for clarification and they determine that the scope of work is clearly defined, you are likely to receive very competitive bids. On the other hand, if the scope of work is not clearly defined, the resulting bid prices will be inconsistent with your expectations, because the bidders will most likely factor in the risk (uncertainty) which they associate with your project. In certain cases, some bidders will not submit a bid at all.
  2. Make an effort to prepare and issue tender documents that have been well prepared – In this case, I could sense this from the type of questions the bidders asked, that the tender documents had not been well prepared. There were too many ambiguities and a number of inconsistencies. Arising out of this, we were obliged to issue a fresh set of tender documents to improve on the clarity of the scope of work.
  3. The first impression matters – I once conducted a pre-bid meeting where a contractor challenged our design. Not only was I embarrassed, but I also felt like I had let the client down. During the question and answer session, I could not respond to their questions but I promised to provide a comprehensive response in the minutes of the pre-bid meeting. I did not participate in the selection process for the contractor but later on, I was informed that the bidder who had challenged our design went on to prepare a very good technical proposal and was awarded the contract. I think the company made a good impression. On the other hand, there are some bidders who ask certain questions, which immediately make you doubt the competence of the individual asking the question or the company being represented.
  4. Scanning the competition and forming alliances – If you are a contractor, the pre-bid meeting can turn out to be a good place for you to assess your competition. The meeting also presents you with an opportunity to meet a potential business partner or associate. In many cases, suppliers of inputs (materials) usually attend such meetings because it presents them with an opportunity to sell products, which will be an input to the final product of the construction works.
  5. The minutes of the pre-bid meeting – Once the pre-bid meeting has been concluded, it is important to send out the minutes of the proceedings to all bidders. These minutes contain the client’s responses to the clarification sought by the bidders. They assist the bidders (who were in attendance as well as those who did not attend) understand the scope of work as well as the necessary requirements which need to be fulfilled in order to be considered for contract award.

Prior to signature of the construction contract, try to ensure that a copy of the minutes of the pre-bid meeting is annexed to the contract. Sometimes these minutes contain information, which enables the contractors price their scope of work. In case a contractor claims to be unaware of certain issues, which were brought up at the tender stage (prior to contract award), the minutes usually come in handy during implementation of the project.

Cyrus: Thank You, McDonald

McDonald: You are welcome. Cyrus, before you go, beware that pre-bid meetings are also held for consultancy services and supply of goods. I have been fortunate to witness each of these scenarios and I am willing to share with you another set of lessons at an appropriate time.

Cyrus: Thank you once again.

© CAT & ASHE Ltd. 2025. Permission to use this article or quotations from it is granted subject to appropriate credit being given to catandashe.com as the source.

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The pitfalls of a flawed procurement process

A few weeks into March 2018, I had a series of meetings with Dispute Adjudication Boards on three large infrastructure projects I am overseeing. During one of these meetings, I met my good, old friend, Arnold, who had previously shared his experience on Dispute Adjudication Boards, on this platform.

The last time we spoke, we discussed the consequences of delayed decision making on large infrastructure projects. It is always a pleasure to meet with Arnold because he enriches my knowledge on such matters.

On this occasion, Arnold spoke to me about the pitfalls of a flawed procurement process through three interesting cases in Europe, Sub-Saharan Africa and Vietnam. This is what Arnold had to say.

Case 1 – A motor way project in Europe

A local government desired to construct a 100-kilometer stretch of tarmac road. To achieve their objective, they signed a financing agreement with a development bank which stated that, the local government was required to contribute 25% of the total budget for the construction works. In addition, the financing agreement stated that, discrimination of bidders during the tender stage was unacceptable.

A couple of months after the signing of this financing agreement, the local government announced the tender to select a suitable contractor. The tender was packaged as a design and build assignment foreseen to last five years.

The contract value was €250M and it required the contractor to spend the first 1½ years producing a detailed design, and the rest of the time (i.e. 3½ years) constructing the road.

The construction works were successfully completed and the supervising engineer issued the takeover certificate at substantial completion of the construction works. After the defects liability period had elapsed, the development bank conducted an audit, which revealed that, the local government had introduced some restrictive clauses in the tender documents, which prevented certain bidders from participating in the tender process. This was a breach of the terms of the financing agreement and consequently a violation of the procurement regulations of the development bank.

Exercising their rights, the development bank notified the local government that a penalty of 10% of the development bank’s total contribution to the project i.e. [10% of (75% of €250M)] was to be paid by the local government. The Local government did not agree to this and proceeded to the European court of justice.

The court ruled that there was indeed a violation of the terms of the financing agreement and the local government was instructed to pay a fine of €18.57M for breach of the procurement regulations.

Case 2 – A water utility in Sub – Saharan Africa

A water utility decided to build a new water treatment plant and upgrade its water distribution and sewerage system. The works tender for the water treatment plant was packaged as a design and build (yellow book) contract and the water and sewerage network as a red book contract.

In the country where the water utility was located, a clause in the local procurement and contract management law states that a major change to the scope of works during implementation is prohibited. The reasoning is that if all the contenders at the tender stage had known that a major change in scope was eminent, the outcome of an evaluation process (to select a suitable contractor) was bound to be different.

During implementation of the construction works, there were many changes to the scope of works arising from poor preparation of the design requirements – especially for the water treatment plant which was packaged as a design and build contract. These changes had resulted in an extension of time for construction with cost and profit to the contractor.

After the construction works were completed, an audit revealed there were too many changes that had taken place during contract implementation, that led to a significant increase in the project value at completion. On releasing this, the financing agency demanded that the water utility pays for the increase in project costs arising from these changes.

In their audit report, the auditors demonstrated that the cost increase in question was unwarranted because the changes on site were approved and subsequently executed at costs that were significantly higher than the going market rates for execution of similar work.

The water utility could not put up a strong case to defend their decision and they were forced to pay for the increase in costs.

Case 3 – A borrower is instructed to revise the tender documents during an ongoing tender process.

An entity in Vietnam was eager to build a railway. They prepared tender documents and received clearance from their development bank to announce the tender. Unfortunately, the loan officer at the development bank, who issued the clearance, was not a specialist in railway construction and could not provide appropriate technical input.

After the pre-bid meeting was conducted, the bidders sent a series of requests for clarification to the employer – pointing to the fact that the tender documents lacked the clarity to enable the bidders prepare competitive bids. In their formal response to the bidders’ requests for clarification, the employer kept on insisting that the documents were detailed enough to provide bidders with the clarity they needed.

Ignoring the bidders’ concerns, the employer proceeded with the entire tender process and on the final leg of the tender evaluation process, requested the development bank to issue a No Objection to award the construction contract. When the development bank received the employer’s evaluation report (containing a record of the requests for clarification from the bidders), they hired a railway construction specialist who informed the bank that the contractors had raised valid concerns about the tender documents. The railway construction specialist proposed that a re-tender was inevitable. The entire process was halted and the employer advised to improve the quality of the tender documents.

When the employer completed the overhaul of the tender documents, the railway construction specialist was re-engaged to have another look at the documentation. The development bank granted a No Objection to award the contract almost a year after the initial pre-bid meeting.

Cyrus: What key lessons can you flag up from these three cases?

Arnold: The lessons we can learn from these three cases are:

  1. Do not take a No Objection for granted – A No Objection is a communication (email or official letter) issued by a financier in the context of its control over a procurement process. During the development of tender documents, the employer usually engages a consultant for such services. It is believed that sufficient quality assurance has been performed on the submission before it is sent to the development partner. When a No Objection to a tender process is issued, it is usually based on the content of your submission. When an audit is conducted at project closure or mid – way project implementation, the employer is still responsible for any mistakes in the process.
  2. Understand the procurement and contract management laws governing your procurement – Whether you are a financier a borrower or a service provider, it comes in handy when you have a thorough understanding of the procurement laws of the jurisdiction in which you are operating. Many times the procurement regulations of the financier supersede those of the local jurisdiction.
  3. Utilisation of project contingencies – There is a natural temptation for contractors and employers to amend scope within an ongoing works contract and pay for the increase in project costs with the contingency provisions. Beware that major changes in scope and subsequent utilisation of contingency sums are in most cases subject to prior approval by the financier. During preparation of tender documents for large construction works, it is preferable to define the scope for utilization of contingencies at the time of tender preparation in order to avoid accusations of misappropriation of funds when an audit is carried out.
  4. Do not try to rush a procurement process – Take your time and ensure that you have dotted all the is and crossed all the ts. Once you announce the tender, and after you have conducted a successful pre-bid meeting, you will be overwhelmed with the barrage of requests for clarification which you will receive from the bidders. Chances are that you will have to stop the entire tender process, revisit your documents and re-issue a fresh set to the bidders.

Cyrus: Thank you for sharing your usual wealth of experience

Arnold: You are welcome

© CAT & ASHE Ltd. 2025. Permission to use this article or quotations from it is granted subject to appropriate credit being given to thebuildersgarage.com as the source.

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