MODULE 4 UNIT 3
Activity submission
Learning outcomes:
LO5: Recommend a tender for a construction project.
Name: Coster Nkala M4U3 Activity Submission
1. Instructions and guidelines (Read carefully)
Instructions
1. Insert your name and surname in the space provided above, as well as in the file name.
Save the file as: First name Surname M4U3 Activity Submission – e.g. Lilly Smith M4U3
Activity Submission. NB: Please ensure that you use the name that appears in your
student profile on the Online Campus.
2. Write all your answers in this document. There is an instruction that says, “Start writing
here” under each question. Please type your answer there.
3. Submit your assignment in Microsoft Word only. No other file types will be accepted.
4. Do not delete the plagiarism declaration or the assignment instructions and
guidelines. They must remain in your assignment when you submit.
PLEASE NOTE: Plagiarism cases will be investigated in line with the Terms and Conditions
for Students.
IMPORTANT NOTICE: Please ensure that you have checked your course calendar for the
due date for this assignment.
Guidelines
1. There are seven pages and one question in this assignment.
2. Make sure that you have carefully read and fully understood the questions before
answering them. Answer the questions fully but concisely and as directly as possible.
Follow all specific instructions for individual questions (e.g. “list”, “in point form”).
3. Answer all questions in your own words. Do not copy any text from the notes, readings
or other sources. The assignment must be your own work only.
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Plagiarism declaration
1. I know that plagiarism is wrong. Plagiarism is to use another’s work and pretend that
it is one’s own.
2. This assignment is my own work.
3. I have not allowed, and will not allow, anyone to copy my work with the intention of
passing it off as their own work.
4. I acknowledge that copying someone else’s assignment (or part of it) is wrong and
declare that my assignments are my own work.
2. Mark allocation
This question is worth 21 marks. However, you will only receive a final percentage mark and
will not be given individual marks for each question.
TOTAL 21
3. Question
Question 1
Kaleen (Pty) Ltd, a Gauteng-based company that sells bottled water, wants to build a storage
warehouse in Cape Town to store its products and launch distribution in Cape Town. The
storage warehouse will be a 600m² single-storey structure with sheet roofing and will be
situated on a sloping site in Somerset West. It will have a lattice roof structure and walls that
are plastered and painted. There is a small area for parking. After a robust tendering
process, Palm Springs Construction is selected as the main contractor for this project.
Before any other work can start, the site needs to be levelled and prepared. Based on the
bills of quantities for the project, 400m³ of soil needs to be removed from the site as part of
the levelling and excavation process. The condition of the soil is described as “pickable
material”, meaning that it will be easy to excavate. At the time of tendering, the professional
team’s price estimation for the levelling of the site was R100,000. The project’s preliminary
programme requires that the work be completed within three weeks of the start date. In
addition, the foundation excavations need to begin within two weeks of the start date.
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Palm Springs Construction decides that the levelling and preparation, which includes
removal (cartage and disposal) should be subcontracted out, since the work needs to be
completed in a short period of time. Palm Springs Construction invites four contractors to
tender for the work as a domestic subcontractor and receives the following prices from
them:
1. Dirt Movers: This is a demolition and bulk earthworks contractor with whom Palm
Springs Construction already has a working relationship. The company’s price for
levelling the site, including disposing of the material at a dumpsite, is R106,000.
There are no conditions attached to the work, and Palm Springs Construction knows
from experience that this contractor is reliable. Dirt Movers has even offered to send
the manager of Palm Springs Construction tickets to a big sports event as a courtesy
for their ongoing working relationship.
2. Spade Works: Palm Springs Construction has also worked with this contractor in the
past. They are willing to do the work but state that the main contractor (Palm
Springs Construction) will be responsible for the removal of material that results
from levelling the site. To reflect the reduced scope of work they will be responsible
for, Spade Works is willing to do the levelling work for R16,000. The going rate for
removal is about R210 per m3.
3. Jack Sparrow and Sons Inc.: This is a comparatively new contractor who prides
themselves on their B-BBEE compliance. They were recommended to you by a work
colleague, because their prices are more affordable. The price included in their bid is
R95,000. There are no conditions attached to their contract; however, the person
who recommended them does say that Jack Sparrow and Sons Inc. has had some
financial upsets in the past.
4. The Quarry (Pty) Ltd: This contractor offers to do the work at a very good price of
R75,000. However, due to other commitments requiring the use of some of their
transportation vehicles, they won’t be able to remove the material immediately. So,
they have asked to stockpile the excavated material on site for 10 days before
removing it.
You have been asked to consider this information in relation to the needs of the project and
to recommend a subcontractor for this work.
Complete the following evaluation report using the information you have. More specifically:
Evaluate each tender price relative to other tender submissions.
Use the bullet points in the “Comments” cells of the table to capture all relevant
points about the contractor that could inform Palm Springs Construction’s decision
of whether they should be selected. Your comments should also consider any
observations you can make around project scope, project duration, ethical tendering
practices, etc.
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Ensure that you recommend one of these contractors to Palm Springs Construction
and justify why you have selected that particular contractor.
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Palm Springs Construction
Work to be carried out: Bulk earthworks
Subcontractors Price Comments
Dirt Movers R106,000
Assumptions is that it passed
(Rank 4) prequalification stage of B-
BBEE compliance, experience
with similar projects, or
specialised technical expertise
Assumptions it passed the
tender responsiveness, hence
qualified to the adjudication
stage
Despite having good
reputation(indicator of
contractor’s ability to
completing quality work on
time) the price not competitive
The financial offer is unrealistic
at the higher in comparison to
the client estimate of R100 000
and the other bidders.
Practicing corruption, thus
unduly trying to influence the
tender (bidder sought to
influence the adjudication
process by offering to send the
manager of Palm Springs
Construction tickets to a big
sports event in the name of
courtesy for their ongoing
working relationship). It is a
matter of judgement as to the
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significance of the offer.
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Spade Works R100,000 The tender do not meet
(R16,000 requirements and is required
levelling work to be declared non-responsive
and R84,000 and must be removed from
removal cost) consideration.
(Rank 3)
Although new, the company is
Jack Sparrow and Sons Inc.: R95,000 compliant with B-BBEE.
The company passed the
tender responsiveness
The price of R95 000 is
competitive since it is within
the estimate range of R100 000
plus or minus 5000.
Recommendation by a work
colleague, because of their
more affordable prices gives
some form of assurance that it
is a known company and is no
fictitious.
It’s a new recruit. However,
background checks can be
made with previous clients.
It does not have financial
strong record. However, the
company can be requested to
submit audited financial
statements to establish the
current status or bank
guarantee to provide
assurance that Palm Springs
will be able to recover costs if
the contractor defaults on
agreement to complete the
work.
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There is no evidence of
fronting (deliberately
circumventing the B-BBEE act),
Corruption (thus unduly
influencing the tender) or
Window dressing (presenting
something in a favourable light
in order to mislead).
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The Quarry (Pty) Ltd R75,000 No record of compliance with
B-BBEE
The financial offer of R75 000 is
unrealistic (much lower than
estimation of R100 000) and
and posing commercial risk to
the client.
Resources partially allocated
since due to other
commitments requiring the use
of some of their transportation
vehicles, they won’t be able to
remove the material
immediately.
Although 10 days timeframe of
removal seem to fall within the
two weeks of starting
foundations, there is risk that
deadline cannot be met.
The contractor’s ability to
complete quality work on time
is doubtful.
Recommendation Justification
Jack Sparrow and Sons Inc. Compliant with B-BBEE.
on condition that it provides
bank guarantee and bid The price of R95 000 is competitive and
security. acceptable. Suppose the evaluation committee
concluded that the air ticket offer to Palm manager
is insignificant to qualify for corruption, Jack
Sparrow offers the lowest price of the two.
Responsive.
There is indication to complete the work within
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time and budget.
Reminder:
This activity revolves around obtaining tenders for sub-contract work. The purpose of
this Evaluation Report activity is for you to ensure you get a complete overview of each
of the tenders received for everyone involved. When you work through this submission,
please think about all the aspects of the tender requirements and what is being offered
by the sub-contractors.
Remember to do the following:
Ensure you provide the correct tender sum with the correct contractor and in
the correct columns and give it some ranking in terms of highest/lowest price.
Under the comments include all the items which could influence your decision.
Look carefully at the risks associated with each sub-contractor and any
conditions attached.
Think about ethical behaviour, financial risk, progamming and whether the
contractor meets the requirements of the tender.
Select one of the contractors and justify why.
Total: 21 marks
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