5 If a procuring organisation has carried out proper due dil

5. ‘If a procuring organisation has carried out proper due diligence during the process of selecting the shortlist of bidders invited to tender for a particular construction works contract, there is no need for it to award the contract on any basis other than lowest price.’ Critically appraise this statement.

Solution

The basic step before the construction of the project is tender which are quoted and given to bidders, the bidders mainly constitute either engineers or construction companies, usually mega projects are given to major construction companies only, The context mentioned here is \"there is no need for it to award the contract on any basis other than lowest price.\" here in this context there are advantages and disadvantages as well, let us first consider the advantages:

(i) As the bidder quotes the least price, the overall cost of the project will be reduced

(ii) It can be finished earlier than the scheduled time because we will be having sufficient funds

(iii) The cost of the workers working in the site will also be less, which will be another benefit

Disadvantages:

(i) If the cost is low then ultimately the quality of materials used will also be low, which is not desirable

(ii) If the materials used here fail then additional maintenence cost will be required which will utlimately increase the cost

(iii) The workers will also demand more pay for working additionally if the materials used fail.

For a construction projects contract if it is given only on the basis of lowest price it will not be fair, it should be given on the basis of

(i) Company reputation and experience: Any experienced and reputed company which has a very famous reputation internationally is desirable

(ii) Price fairness: It should neither be too high nor too low

(iii) Acheivements in previous projects of the company: The acheivements may be the quality of the construction, time schedule management and any other aspect.

Implementing all the above strategies will ensure that the project is completed within time and the quality is not compromised.