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chapter 11: Advertising

About this Chapter

Advertising is the basis for competition. This chapter provides recommendations for advertising, dissemination of bid documents and for procedures during the time allowed for bid preparation.

Advertising is essential in any competitive bidding process. Advertising procedures should ensure that all potential bidders are able to learn about the opportunity with sufficient time to respond.

Advertising by newspaper is the most widespread method. In most countries, there are newspapers that contracting firms will monitor in order to learn of bidding opportunities. However, remote rural areas may not have a suitable newspaper that is read by local contractors. Also, the cost of placing a newspaper advertisement can be high, particularly in relation to the cost of a small contract.

Sometimes bids are advertised only by placing notices on the notice-board of the local government. This is acceptable if:

1. The size of the contracts is very small, so that only local contractors would be interested in bidding; and

2. The local contractors are well informed of the location where advertisements will be placed.

Other potential methods of advertising include television, radio and the Internet. Access to the Internet is increasingly widespread even in remote rural areas. Local construction contractors are not usually the first group (in any country) to make use of the Internet, but they can easily do so if they perceive that there is a potential benefit to themselves.

What should be Advertised?

Normally, the advertisement will either be an invitation to pre-qualify (where pre-qualification is used) or it will advertise distribution of the bidding documents and the time and place for submission of bids.

• The advertisement should include, as a minimum: • The name and address of the buyer;

• The general nature of the project and the time allowed for implementation; • The procurement method to be used;

• General rules on eligibility to bid (so that non-eligible firms do not waste their time applying);

Cambodia – The pre-qualification process (contractors apply for a pre-qualified contractor list) is advertised nationally. Each contract is then advertised on noticeboards at Communal and Provincial headquarters.

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Chapter 11: Advertising

• How to obtain more information including pre-qualification or bidding documents, including place, hours of business and the department or staff member responsible; • Cost of bidding documents, if any;

• Time and place for submission of bids; • Amount of bid security, if required.

It is also recommended to include the estimated cost of the contract in the advertisement.

distribution of Bid documents

Pre-inspection

Potential bidders should be permitted to inspect bidding documents without fee or obligation, at the premises of the buyer during office hours.

It is common practice to sell tender documents to potential bidders for a price that is intended to cover the cost of reproduction of the documents. Some observations about this practice are:

• It is common to find that the sale price of the bid documents is much higher than the real cost of printing or photocopying;

• In many cases, the cost of printing the documents is paid from project funds;

• It is not always clear how the funds obtained by selling the documents are actually used; • The interest of the buyer is to encourage as many bidders as possible to obtain

documents and submit bids. There is no long-term benefit from charging genuine bidders for the documents (these bidders will need to cover this cost from profits earned in public sector contracting, so in the end the cost of the bidding documents is a cost to public funds). The only real benefit is to deter people who are not interested in bidding, from taking away copies of the documents.

Therefore, the best option is to cover the cost of reproducing bid documents from project funds. If this cannot be done, the following rules should apply:

1. The cost of the documents should be strictly the printing costs, and no more; and 2. The money received for bid documents should be returned to general funds or specific

project funds;

3. The money received should be carefully recorded in accounts which should be subject to audit.

4. When bid documents are distributed to invited bidders only (for example, after short- listing), there is no good reason for requiring the bidders to pay for the documents.

electronic distribution of Bidding documents

Bid documents can be distributed in electronic format either by downloading from a website, by e-mailing to a list of contractors, or by allowing interested bidders to copy electronic files at the premises of the buyer. In this case, the cost of printing the documents is borne by the bidder.

The potential risk of electronic distribution is that bidders will make unauthorized alterations to the bidding documents. However, this is not a very serious risk, particularly if the documents are issued in a format (such as Printed Document Format, .pdf, files) that cannot easily be edited. It is always possible to tamper with an electronic file, but it is equally possible to

Chapter 11: Advertising

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tamper with a paper document. All bidding documents should be checked for completeness as part of the preliminary examination of bids. Therefore, electronic distribution of bid documents should be seriously considered, particularly in areas where it may be difficult or costly for bidders to travel to collect documents from the buyer’s premises.

time Allowed for Preparation of tenders

Bidders should be allowed a reasonable period of time for preparation of bids. For the very simplest projects this should be no less than two weeks. More typically, three weeks to one month should be allowed for preparation of bids for works contracts.

During the bid preparation period, all communications between the buyer and bidders should be carefully regulated. Any information that is given to one bidder must be copied to all the others. Therefore:

• Keep a register of bidders who have obtained bidding documents, including contact details;

• Keep a log of all enquiries, whether by telephone or in person, from bidders; • If any bidder is provided with information that is not clearly stated in the bid

documents, this information should be copied to all other bidders who have provided contact details;

• The same register of contact details can be used to communicate any changes, either to the project design or to the bidding process, that are made during the bid preparation period.

site inspections

For works contracts, it is common to conduct pre-bid meetings and site inspections to assist bidders to gain additional information. Attendance at such meetings should not be mandatory – bidders should be free to make their own arrangements to inspect the site if they prefer. However such occasions can be a good opportunity to ensure that bidders have a full understanding of the requirements of the contract. Contracts should be let on the basis that bidders are presumed to have inspected the site and to have informed themselves about such matters as the condition of the site, access roads, water supplies, sources of materials, etc. – if the winning bidder has not done so, it takes the risk itself.

Electronic distribution of bid documents is only appropriate if the local contractors use computers and the Internet. It is common to find (in developed countries as well as developing ones) that small construction contractors are not very computer literate. However, they are businesspeople and can learn – they will soon find their way to the local Internet cafe if they see that it gives them an opportunity to do business.

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